GLOBAL OBAL IN INSTABILIT ABILITY China slowing down - - PowerPoint PPT Presentation

GLOBAL OBAL IN INSTABILIT ABILITY

 China slowing down  Demographics in Japan  Shaky Euro Zone  Greece just the start  Southern Europe to follow?  Brazil – Inflation ↑  Russia?  New “Black Swan” Event

STRENG ENGTHENING THENING OF T F THE E U.S. . EC ECONOMY OMY

70.00 75.00 80.00 85.00 90.00 95.00 100.00

The U.S. Dollar Index

 Federal Rates ↑  Global Money to follow  Real GDP ↑

 U.S. Exports more costly

 Federal Deficit ↓

 2009 = $1.4 Trillion  2014 = $514 Billion

○ 3% of GDP  40 year

average

Source: Bloomberg Business

MO MORE RE GOO OOD NEWS EWS

OIL - ↓ thru 2015

Oil Dividends to U.S. Consumers

 50% to Personal Savings  25% to Pay Down Debt  25% to New Consumer Spending

EM EMPLOYMENT YMENT GROWTH TH

• 4.0%
• 3.0%
• 2.0%
• 1.0%

0.0% 1.0% 2.0% 3.0% 4.0%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 (P) US Employment Growth

Source: U.S. Bureau of Labor Statistics

EM EMPLOYMENT YMENT GROWTH TH

• 4.0%
• 3.0%
• 2.0%
• 1.0%

0.0% 1.0% 2.0% 3.0% 4.0%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 (P) SF Employment Growth SD Employment Growth US Employment Growth

Source: U.S. Bureau of Labor Statistics

WAGE S E STAGNATION TION

0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 120.0% 140.0% 160.0%

Cumulative percent change since 1948

Labor Productivity Real Hourly Compensation

Source: U.S. Bureau of Labor Statistics

WAGE S E STAGNATION TION

 Since mid-1970’s labor productivity has

increased at a faster pace than real hourly compensation

 Real = purchasing power

 Wages froze during The Great Recession,

rather than cut

 Excessive unemployment also suppressed wage

growth

 After recession, wages are not raising as quickly

 “pent-up wage deflation”

PER ERSONA ONAL L IN INCOME OME GROWTH TH

0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 120.0%

Cumulative percent change since 1998

U.S.

Source: U.S. Department of Commerce, Bureau of Economic Analysis

PER ERSONA ONAL L IN INCOME OME GROWTH TH

0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 120.0%

Cumulative percent change since 1998

U.S. South Dakota Sioux Falls MSA

Source: U.S. Department of Commerce, Bureau of Economic Analysis

WAGE S E STAGNATION TION

Possible Solutions

 Restore full employment

 Not raising interest rates until wage growth is

improved

○ Public investments to create jobs and future

productivity growth

 Increase wages  Increase consumer

Demand (Real Income)

SIOUX OUX FALLS MS MSA EM EMPL PLOYMENT YMENT

(N (Non

• n-Farm

arm)

• 25,000

50,000 75,000 100,000 125,000 150,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 (P)

Source: U.S. Bureau of Labor Statistics

TOTAL AL BUI UILDIN LDING PER ERMIT MITS

$- $100,000,000 $200,000,000 $300,000,000 $400,000,000 $500,000,000 $600,000,000 $700,000,000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Commercial Residential

Source: City of Sioux Falls, Planning and Building Services

TOTAL AL BUI UILDIN LDING PER ERMIT MITS

(wit ithout

• ut 2014

4 hail il da damage ge fig igures) es)

$- $100,000,000 $200,000,000 $300,000,000 $400,000,000 $500,000,000 $600,000,000 $700,000,000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Commercial Residential 2014 Hail Damage

Source: City of Sioux Falls, Planning and Building Services

RE REGIONAL GIONAL COMP MPARISONS ARISONS

Sioux Falls $ 619,502,240

Rapid City, SD $ 214,924,663 Fargo, ND $1,012,135,745 Rochester, MN $ 452,506,560 Omaha, NE $ 697,966,202 Des Moines, IA $ 340,181,808

NEW EW COM OMMER MERCIAL CIAL CON ONSTR TRUCTION UCTION

$- $20,000,000 $40,000,000 $60,000,000 $80,000,000 $100,000,000 $120,000,000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Industrial Retail Office Other

Source: City of Sioux Falls, Planning and Building Services

EX EXAM AMPLE PLES S OF F CO CONSTR TRUCTION UCTION

 New Construction:

 Scheel’s Ice Plex - $8,000,000  HiRoller Conveyor - $7,000,000  First Saving Bank - $2,000,000  Burlington Coat Factory - $3,439,000  Susan B. Anthony School - $8,025,958

 Additions/Remodel:

 Plaza Downtown Building - $6,695,000  Sioux Falls Regional Airport - $10,500,000  Downtown YMCA - $5,004,000  Sanford Cancer Center & Skywalk - $3,900,000

2015 5 PRE REDIC ICTIONS TIONS

Sioux Falls Economic Outlook

 Job Growth: 1,800 – 2,000 jobs

○

Primarily in Retail and IT

 Construction:

○

Retail ↑

○

Office ↔

○

Industrial ↑

 Residential Construction

○

Single-Family ↔

○

Multi-Family ↓

ROB FAGN GNAN AN

 Minneapolis Native  Southwest Minnesota State  Joined Bender Commercial

in 2005

 New Father 2014  Fun Fact: Sioux Falls Storm

QB

LA LAND ND SAL ALES ES MA MARK RKET ET

Unimproved Land - $ per acre Retail Office Industrial Multi-family

$ per square foot

LAST YEAR’S PREDICTIONS

Unimproved Land Sales ↗ Improved Land Sales → Price ↗

UN UNIM IMPR PROVED VED LA LAND

1 2 3 4 5 6 7 8 2008 2009 2010 2011 2012 2013 2014 # of Transactions

UN UNIM IMPR PROVE VED D LA LAND

16.42 acres $59,196/acre 27.69 acres $25,910/acre 127.03 acres $38,818/acre 73.69 acres $54,634/acre 16.05 acres $32,553/acre

UN UNIM IMPR PROVE VED D LA LAND

16.42 acres $59,196/acre 27.69 acres $25,910/acre 127.03 acres $38,818/acre 73.69 acres $54,634/acre 16.05 acres $32,553/acre

2013 Land Sale

2012 Land Sale

NEW EW RES ESIDEN IDENTIAL TIAL PE PERMITS MITS (Suppl upply)

• 500

1,000 1,500 2,000 2,500 3,000 3,500 4,000 2009 2010 2011 2012 2013 2014

Available Lots

Source: City of Sioux Falls, Planning and Building Services

NEW EW RES ESIDEN IDENTIAL TIAL PE PERMITS MITS (Suppl upply v. De Dema mand nd)

• 500

1,000 1,500 2,000 2,500 3,000 3,500 4,000 2009 2010 2011 2012 2013 2014

Permits Available Lots

Source: City of Sioux Falls, Planning and Building Services

IMP MPROVED VED LA LAND ND TR TRANSA NSACTIONS CTIONS

10 20 30 40 50 60 70 2007 2008 2009 2010 2011 2012 2013 2014 # of Transactions # Transactions

IMP MPROVED VED LA LAND ND TR TRANSA NSACTIONS CTIONS

$- $5.00 $10.00 $15.00 $20.00 $25.00 $30.00 $35.00 $40.00 10 20 30 40 50 60 70 2007 2008 2009 2010 2011 2012 2013 2014 $ Million # of Transactions # Transactions Sales Volume

TR TRAN ANSACTION TION BY LAN Y LAND US USE

5 10 15 20 25 30 35 2007 2008 2009 2010 2011 2012 2013 2014

# of Transactions Office Multi-Family Industrial Retail

PRI RICIN ING

LOW HIGH OFFICE $3.04/sq. ft. $7.68/sq. ft. RETAIL $3.00/sq. ft. $14.50/sq. ft. INDUSTRIAL $1.62/sq. ft. $4.00/sq. ft. MULTI-FAMILY $1.20/sq. ft. $3.00/sq. ft.

IN INFILL FILL SIT ITES ES

$15.00 to $35.00/sq. ft.

1600 & 1608 W. Russell St. – 75,000 sq. ft. @ $15.33/sq. ft. 805 S. Minnesota Ave. – 9,900 sq. ft. @ $14.65/sq. ft. 507 – 527 S. 2nd Ave. – 47,400 sq. ft. @ $18.99/sq. ft.

CONCL NCLUSIONS USIONS & PRE PREDICTIONS DICTIONS

Unimproved Land Sales ↔ Improved Land Sales ↑ Price ↑

RE REGG GGIE IE KUI UIPERS PERS

 Platte HS  University of Sioux Falls  Joined Bender in 2010  New Father 2015  SIOR Candidate  Fun Fact: Participated in 2

Tough Mudders

MA MAJOR JOR RE RETAI AIL L FOC OCAL AL POI OINTS TS

Sector Total Sq. Ft. Vacancy Rate Asking Lease Rates per Sq. Ft. (NNN) 57th & Western 92,774 sq. ft. 0.0% $15.00 - $17.00 57th & Louise 151,828 sq. ft. 0.0% $16.00 - $21.50 69th & Western 53,985 sq. ft. 0.0% $14.00 - $16.00 69th & Minnesota 64,462 sq. ft. 2.79% $13.25 - $15.00 26th & Marion 99,346 sq. ft. 17.5% $11.00 - $18.00 Mall Area 588,242 sq. ft. 3.0% $9.50 - $30.00 Dawley Farm Area 141,584 sq. ft. 9.1% $14.50 - $22.50 Total 1,192,221 sq. ft. 4.2%

RE RESTAUR URAN ANTS TS

RE RESTAUR URAN ANTS TS

 Huge Increase in restaurant expansion

 Qdoba, Pita Pit, Noodles, Jimmy Johns,

Zoup, Wingstop, Panda Express, Jimmy Johns, 5 Guys

 Restaurant Row 2.0

 Lake Lorraine

 Minimum Wage ↑

RE RESTAUR URAN ANTS TS

LOSERS

 Fast Food  Frozen Yogurts  Other

WINNERS

 Fast Casual  QSR  Health Conscious  Neighborhood Bars  Unique Concepts

6.6% ↑ in Restaurant Sales (Gross Sales = $497M in 2014)

RE RETAI AIL L EV EVOL OLUTION UTION

Mobile Shopping Metropolitan Areas Millennial Generation

NATI TIONA ONAL L RE RETAI AILER LERS

RE RETAIL AIL MA MARKET RKET CONCL NCLUSIONS USIONS & PR PREDIC EDICTIONS TIONS

 Conclusions:

 Vacancy ↓  Rental Rates ↑  Corporate / National Interest ↑  Construction ↓

 Predictions:

 New Construction ↑ ($40M)

○ 85th Street, Minnesota Avenue, Dawley, 41st

Street

 Big Box Availability  Downtown Retail

RET ETAIL AIL MA MARKET RKET REA EAL L ES ESTATE TE CYCLE CLE

2013 2014

AN ANDI DI AN ANDE DERSON, RSON, SI SIOR

 Mitchell HS  Desert Storm Veteran  Joined Bender in 2000  3 Children  Fun Fact: 3D Archery

Champ

SIO IOUX UX FAL ALLS LS

• 2,000,000

4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 16,000,000 2007 2008 2009 2010 2011 2012 2013 2014 Square Feet

Tenant Occupied Owner-Occupied

13,618,750 sq. ft.

CBD IN INVEN ENTOR ORY

• 500,000

1,000,000 1,500,000 2,000,000 2,500,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Square Feet

2,326,937 sq. ft. ↑ 0.7%

CBD IN INVEN ENTOR ORY

CBD VACAN ANCY CY RA RATE TE

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

11.9%

CBD OF OFFI FICE CE MA MARK RKET ET

CBD NET ET ABS ABSOR ORPT PTION ION

(75,000) (50,000) (25,000)

• 25,000

50,000 75,000 100,000 125,000 150,000 175,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Square Feet

• 59,925 sq. ft. ↓ 160%

CBD OF OFFI FICE CE PRE REDIC ICTIONS TIONS

Inventory ↔ Absorption ↑ Vacancy ↓ Rental Rates ↑

SUB UBUR URBAN BAN IN INVENT ENTOR ORY

• 500,000

1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000 4,500,000 5,000,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Square Feet

4,626,037sq. ft. ↑ 2.3%

SUB UBUR URBAN BAN NET ET ABS ABSORPT ORPTION ION

(100,000)

• 100,000

200,000 300,000 400,000 500,000 600,000 700,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Square Feet

122,590 square feet in 2014

SU SUBUR URBA BAN N VACA CANCY CY RA RATE TE

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

7.5%

SUB UBUR URBAN BAN OF OFFI FICE CE PR PRED EDICTIONS CTIONS

Inventory ↑ Absorption ↑ Vacancy ↔ Rental Rates ↑

HI HISTORIC ORIC VACANC ANCY

(C (City tywide ide)

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 20.0%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Sioux Falls

9%

HI HISTORIC ORIC VACANC ANCY

(C (City tywide ide)

0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 20.0%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Sioux Falls National

17% 9%

AS ASKI KING RE RENTAL AL RA RATE TES

(B (By Cla lass ss - NNN) NNN)

Low High

Class A Space $13.50 $17.00 Class B/C Space $8.00 $11.00

NET ET ABS ABSORPT ORPTION ION

(C (City tywide ide)

• 100,000

200,000 300,000 400,000 500,000 600,000 700,000 800,000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Square Feet

OFFI FFICE CE MA MARKET RKET PR PREDICTIONS EDICTIONS

Continued Positive Net Absorption ↓ Vacancy ↑ Rental Rates Limited Spec Building

OFF FFICE ICE MA MARKET RKET REA EAL L ES ESTATE TE CYCLE CLE

2013 2014

NICK CK GU GUSTAFSON AFSON, , CC CCIM

 Missouri Native  Augustana College  Joined Bender in 2009  2 Children  Fun Fact: Cigar Aficionado

INV NVES ESTMENT TMENT & COMMER MMERCIAL CIAL SALES ES MA MARKET RKET OVE VERVIEW VIEW

 Asset Class Performance

○ Multi-Family Market ○ Office Market ○ Retail Market

 2014 Trends & Conclusions  2015 Predictions

MUL MULTI TI-FAMIL AMILY Y BUI UILDING LDING PE PERMITS RMITS

(S (Supply) pply)

• 200

400 600 800 1,000 1,200 1,400 1,600 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

# of Units Multi-Family

Source: City of Sioux Falls, Planning and Building Services

MUL MULTI TI-FAMIL AMILY Y BUI UILDING LDING PE PERMITS RMITS

(S (Supply) pply)

• 200

400 600 800 1,000 1,200 1,400 1,600 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

# of Units Multi-Family Town House

Source: City of Sioux Falls, Planning and Building Services

MU MULTI TI-FAMIL AMILY Y VACANCY CANCY RA RATE TE

Sioux ux Fal alls ls MS MSA (D (Demand) emand)

0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00%

Sioux Falls U.S.

MU MULTI TI-FAMIL AMILY Y MA MARK RKET ET

$- $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 $ Millions

10-Year Multi-Family Sales Volume

72 37 38 42 16 13 25 24 25

10-Year Average

25

NOTAB ABLE LE 2014 MU MULTI TI-FAMIL AMILY Y SAL ALE

6206 South Avalon Avenue

 $4,291,000

($79,462/unit)

 54 units  Built 2008  Sold April 2014  7.6% Cap Rate

NOTAB ABLE LE 2014 MU MULTI TI-FAMIL AMILY Y SAL ALE

3501, 3505, 3601 & 3609 South West Avenue

 $1,208,000

($43,143/unit)

 28 units  Built 1974  Sold July 2014  8.4% Cap Rate

NOTAB ABLE LE 2014 MU MULTI TI-FAMIL AMILY Y SAL ALE

1201 East 57th Street & 4901 South MacArthur Lane

 $1,200,000

($42,857/unit)

 24 units  Built 1984  Sold February 2014  6.0% Cap Rate

OF OFFIC FICE E PROP OPER ERTY Y SAL ALES ES

$- $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 $80.00 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 $ Millions

10-Year Office Sales Volume

10-Year Average

NOTAB ABLE LE 2014 OF OFFIC FICE E SAL ALE

4701 West Research Drive

 $1,900,000 ($125.98/sq. ft.)  15,082 sq. ft.  Built in 2007

NOTAB ABLE LE 2014 OF OFFIC FICE E SAL ALE

4601 West Homefield Drive

 $1,340,000 ($105.40/sq. ft.)  12,714 sq. ft.  Built in 1998

NOTAB ABLE LE 2014 OF OFFIC FICE E SAL ALE

4610 South Technopolis Drive

 $1,070,000 ($96.66/sq. ft.)  11,070 sq. ft.  Built in 2000  8.7% Cap Rate

RE RETAI AIL L PROPE OPERTY Y SAL ALES ES

$- $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 $ Millions

10-Year Retail Sales Volume

10-Year Average

NOTAB ABLE LE 2014 RE RETAI AIL L SAL ALE

2804 South Louise Avenue

 $4,550,000 ($94.80/sq. ft.)  47,995 sq. ft.  Built in 2005  7.39% Cap Rate

NOTAB ABLE LE 2014 RE RETAI AIL L SAL ALE

2812 South Louise Avenue

 $7,700,000 ($197.61/sq. ft.)  38,966 sq. ft.  Built in 2006  7.38% Cap Rate

NOTAB ABLE LE 2014 RE RETAI AIL L SAL ALE

2600 South Louise Avenue

 $4,800,000 ($171.53/sq. ft.)  27,984 sq. ft.  Built in 2001  7.6% Cap Rate

SAL ALES ES VOL OLUME UME RE REPOR ORT T CAR ARD

Multi- Family Office Retail 2014

↓ ↓ ↑

SAL ALES ES VOL OLUME UME RE REPOR ORT T CAR ARD

Multi- Family Office Retail 2014

↓ ↓ ↑

2015

↑ ↑ ↓

SAL ALES ES VOL OLUME UME RE REPOR ORT T CAR ARD

Multi- Family Office Retail 2014

↓ ↓ ↑

2015

↑ ↑ ↓

Cap Rates

7.0% – 8.0% 7.0% - 8.5% 7.0% - 8.0%

INVES VESTMENT TMENT & C & COMMER MMERCIAL CIAL SALE ALES S REA EAL L ES ESTATE TE CY CYCLE CLE

Multi-Family Retail Office

DO DOUG UG BROCKHOUSE, CKHOUSE, SI SIOR

 Sioux Falls Native  SD School of Mines  Joined Bender in 1997  Fun Fact: Emergency Dive

Team - Dove 1300’

IN INDUS USTRIA TRIAL L MA MARK RKET ET

Basis of our Data We define the industrial market as those properties used for: Manufacturing Warehousing Distribution Transportation Contractor Shop Space

IN INDUS USTRIA TRIAL L MA MARK RKET ET

Sioux Falls 771 Buildings = 15.6 M Tea 313 Buildings = 2.4 M

(2.45% vacancy)

IN INDUS USTRIA TRIAL L MA MARK RKET ET

69.5%

30.5%

Sioux Falls

Owner-Occupied Non-Owner Occupied

77.9% 22.1%

Tea

Owner-Occupied Non-Owner Occupied

VACANT ANT JAN ANUAR ARY Y 1, 20 , 2014

Sioux Falls 536,104 sq. ft. (3.51%) Absorbing 2,964 sq. ft./Day 182 Days

IN INDU DUSTRIAL TRIAL CON ONSTR TRUCT UCTION ION

• 50,000

100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000 500,000

New Construction – Completed during calendar year 2014 6 New Buildings and 6 Additions Completed in 2014 (149,633 sq. ft.)

IN INDUS USTRIA TRIAL L CON ONSTR TRUCT UCTION ION

EX EXIS ISTIN TING G SPACE E TU TURN RNOVER VER

• 100,000

200,000 300,000 400,000 500,000 600,000 700,000 800,000

The amount of existing space that came on the market in 2014 was up

• nly 0.4% from 2013

AVAI AILABLE LABLE SPACE E IN IN 20 2014

1 – Vacant as of January 1, 2014 536,104 sq. ft. 2 – New Construction in 2014 149,633 sq. ft. 3 – Existing Space Turnover 695,145 sq. ft. Total Available Space 1,380,882 sq. ft.

IN INDUS USTRIA TRIAL L VACANCY ANCY

3.76% 3.24% 3.81% 4.63% 4.18% 4.02% 3.51% 1.77%

0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% 5.00%

276,645 sq. ft.

Tea = 2.45% (59,310 sq. ft.) 7.4% in 2013

NET ET ABS ABSORPT ORPTION ION

Total Available Space 1,380,882 sq. ft. Vacant as of January 1, 2014 ( 276,645 sq. ft.) Net Absorption 1,104,237 sq. ft.

NET ET ABS ABSORPT ORPTION ION

• 200,000

400,000 600,000 800,000 1,000,000 1,200,000

In 2014, the Industrial market absorbed 2.8% more than in 2013

SUP UPPL PLY

Absorbing 3,025 sq. ft./day 276,645 sq. ft. Vacant

91 Days

IN INDUS USTRIA TRIAL L MA MARK RKET ET

Net Absorption Sale Leases

IN INDUS USTRIA TRIAL L MA MARK RKET ET SAL ALES ES

2205 & 2209 East 39th Street North 97,800 sq. ft. (2 Buildings) $3,500,000 = $35.59/sq. ft.

IN INDUS USTRIA TRIAL L MA MARK RKET ET SAL ALES ES

1400 East Robur Drive 12,024 sq. ft. $585,000 = $48.65/sq. ft.

IN INDUS USTRIA TRIAL L MA MARK RKET ET SAL ALES ES

3601 North Potsdam Avenue 9,229 sq. ft $610,000 = $66.10/sq. ft.

IN INDUS USTRIA TRIAL L MA MARK RKET ET SAL ALES ES

42 Sales Ranging from $12.50 to $98.00/sq. ft. Average = $42.00/sq. ft.

IN INDUS USTRIA TRIAL L MA MARK RKET ET LE LEAS ASES ES

4001 North Jessica Avenue 12,500 sq. ft. $4.98/sq. ft. NNN

IN INDUS USTRIA TRIAL L MA MARK RKET ET LE LEAS ASES ES

3518 North Casco Avenue 3,600 sq. ft. $5.85/sq. ft. NNN

IN INDUS USTRIA TRIAL L MA MARK RKET ET RE RENTAL AL RA RATE TES

$4.75 $3.75 $3.95 $4.15 $4.35 $4.55 $4.75 $4.75 $3.75 $4.00 $4.00 $4.15 $4.40 $5.00

$- $1.00 $2.00 $3.00 $4.00 $5.00 $6.00

IND NDUS USTRIAL TRIAL MA MARKET RKET RE RENT NTAL AL RA RATES TES

Today’s $5.00/SF Rent $5.00 Net

• $1.00 Expenses

$4.00 Income $4.00/SF Income @ 8% required rate of return = $50.00/SF to Complete Construction

Sioux Falls

Hartford Brandon

Harrisburg Canton

Tea

IN INDUS USTRIA TRIAL L MA MARK RKET ET CON ONCLUS USIONS IONS & PRE REDIC ICTION TIONS

 Surrounding Communities will continue

growth



25 - 30% of All-in Construction = Land Cost



Some communities have cheap or free land

 Lack of 2014 construction – 2015 should be

stronger

 Large users are looking  The 2015/2016 Challenge

IND NDUS USTRIAL TRIAL MA MARKET RKET RE REAL L ES ESTATE TE CYCLE CLE

2014 2013