MarketView 2012:

Colorado Springs

2 Q

OFFICE

INDUSTRIAL

R E TA I L

QUICK STATS
Change from last

Vacancy Lease Rates

Current Year Qtr. 10.21% $5.61

Lease Activity* 428,975 Net Absorption* (99,972)

*Year-to-date gures

TOP LEASE / SALE TRANSACTIONS

G Ethan, LLC: Purchased 118,814 square foot manufacturing facility at 4715 N. Chestnut St. for $8,765,500 Colorado Engineering Inc.: Purchased 38,872 square foot ofce/r&d facility at 1915 Jamboree Dr. for $2,331,900 TJ&TC LLC: Purchased 20,710 square foot warehouse/distribution facility at 522 S. Wahsatch Ave. for $352,000

HOT TOPICS
The Waldo Canyon Fire, which began on June 23, consumes over 18,000 acres in northwest Colorado Springs and in national forest land. Three hundred forty-seven homes were destroyed, making it the costliest wildre in Colorado history. Frontier Airlines announces plans to begin non-stop ights from Colorado Springs to San Diego and Orlando, increasing the range of cities that the Colorado Springs airport can service directly. Penrose-St. Francis Health Services is named to Becker's Hospital Review Top 100 Great Community Hospitals for the second time. It is the only Colorado hospital to be named to the list this year.

the local industrial market has largely After significant gains during the last year, outperformed the national markets during the industrial market in Colorado Springs has the last few years, the latest downturn is begun to cool during the second quarter of proving to have a significant negative effect 2012. Net absorption during the quarter was at the local level. With manufacturing negative 85,000 square feet, bringing yeargrowth expected to remain weak for the next to-date absorption to negative 99,972 square several months, 2012 is likely to feet. Leasing activity during the quarter, only 131,346 square The slowdown in the result in a relatively lackluster year for industrial properties. feet, was not strong enough to Colorado Springs offset occupancy losses. With industrial market While this is certainly this lackluster activity, vacancy corresponds with disconcerting news for has increased to 10.21% and a slowdown in industrial property investors, average asking lease rates have manufacturing on a there are some bright spots in further declined to $5.61/SF/ national level. the local market due to growth NNN. in the owner-user market. Bal Seal Engineering, Agilent Technologies, The slowdown in the Colorado Springs and Wal-Mart have user projects underway industrial market corresponds with a that will add over 400,000 square feet of slowdown in manufacturing on a national occupied space to the market in the coming level. During June, U.S. manufacturing months. While these projects do little to contracted for the first time in nearly relieve vacancies in investment properties, three years, prompting concerns that a they still inject energy into the market and double dip recession, especially within the boost overall statistics. manufacturing sector, is possible. While
AVERAGE ASKING LEASE RATES - INDUSTRIAL MARKET
$7.50 $7.00 $6.50 $6.00
$5.61 $6.95

$5.50 $5.00 $4.50 $4.00

1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12

SIERRA COMMERCIAL REAL ESTATE, INC. 102 S. Tejon, Suite 750, Colorado Springs, Colorado 80903 T. 719.955.2000 F. 719.955.2019

www.sierracre.com

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CBD

MarketView 2012: Colorado Springs

OFFICE INDUSTRIAL R E TA I L

DEFINITION OF TERMS
Average Asking Lease Rate Rate determined by multiplying the asking net lease rate for each building by its available space, summing the products, then dividing by the sum of the available space with net leases for all buildings in the summary. Net Leases Includes all lease types whereby the tenant pays an agreed rent plus most, or all, of the operating expenses and taxes for the property, including utilities, insurance and/or maintenance expenses. Market Coverage Includes all competitive industrial buildings 5,000 square feet and greater in size. Net Absorption The change in occupied square feet from one period to the next. Net Rentable Area The gross building square footage minus the elevator core, flues, pipe shafts, vertical ducts, balconies and stairwell areas. Occupied Square Feet Building area not considered vacant. Under Construction Buildings which have begun construction as evidenced by site excavation or foundation work. Available Square Feet Available Building Area which is either physically vacant or unoccupied, including sublease space. Availability Rate Available Square Feet divided by the Net Rentable Area. This calculation includes vacant and sublease space and is given as a percentage. Vacant Square Feet Existing Building Area which is physically vacant or immediately available and does not include sublease space. Vacancy Rate Vacant Building Feet divided by the Net Rentable Area. This calculation is given as a percentage and includes vacant space but does not include sublease space. Normalization Due to a reclassification of the market, the base, number and square footage of buildings of previous quarters have been adjusted to match the current base. Availability and Vacancy figures for those buildings have been adjusted in previous quarters.

METRO INDUSTRIAL STATISTICS

Industrial Submarket Net Rentable Area 6,984,152 7,373,867 3,204,453 Vacant SF 631,002 595,995 201,057 YTD YTD Vacancy Availability Average Asking Leasing Absorption Rate % Rate % Lease Rate Activity SF 9.03% 8.08% 6.27% 14.57% 2.19% 10.21% 9.75% 9.68% 14.73% 15.98% 2.19% 12.18% $4.86 $6.01 $5.86 $5.78 $5.19 $5.61 112,831 (38,230) 68,916 32,865 5,917 28,170

Northwest Northeast Southeast Southwest

11,241,096 1,637,270 1,542,912 30,346,480 Net Rentable Area 5,586,919 2,987,037 7,176,438 8,259,387 6,336,699 33,850 3,099,174

160,597 (117,745) 53,766 21,916

Total Industrial Property Type

Ofce/ R&D Ofce/ Showroom Ofce/ Warehouse Manufacturing/ Assembly Warehouse/ Distribution

428,975 (99,972)

INDUSTRIAL STATISTICS BY PROPERTY TYPE

Vacant SF 636,825 275,564 838,087 834,761 513,937 YTD YTD Vacancy Availability Average Asking Leasing Absorption Rate % Rate % Lease Rate Activity SF 11.40% 9.23% 11.68% 10.11% 8.11% 10.21% 11.68% 10.07% 12.80% 15.88% 8.11% 12.18% $7.54 $6.29 $5.76 $4.46 $4.93 $5.61 10,656 66,895 197,508 74,620 79,296 428,975 (37,116) 34,672 (49,619) (59,663) 11,754 (99,972)

Total

30,346,480 3,099,174
D LVD LVD LVD BLV BLV MB MB MB M M M

COLORADO SPRINGS INDUSTRIAL SUBMARKET MAP

Northwest
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Northeast

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ON RD ON RD ON RD ON RD ON RD PE TERS PE PETERS PETERS PE PETERS PE TERS

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FILLMORE ST FILLMORE ST FILLMORE FILLMORE ST FILLMORE ST

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CBD
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CONSTITUTION AVE CONSTITUTION AVE CONSTITUTION AVE CONSTITUTION AVE

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STAT STATE STATE HW STATE HW AT AT HW HWY 94 HWY 94 Y 94 94 Y 94 94

Southwest

D D D LVD LVD BLV EB E B LV E BLV E EB NE NN NN N NN EN N ENN EYE EYE E YE EY EY HEY CH CH CH CH CH AV AVE AVE AVE LAKE LAKE LAKE LAKE

FOUNTAIN BLVD FOUNTAIN FOUNTAIN BLVD FOUNTAIN HA HA HA HA HA HA NC NC NC NC NC NC OC O OC OC OC OC K K KE KE KE EX P EX P XP XP XPY Y Y Y Y

STATE HWY 115 STATE HWY 115 STATE HWY 115 STATE HWY 115 STATE HWY 115 STATE HWY 115

AIRPORT RD AIRPORT RD AIRPORT RD

ACADEMY BLVD ACADEMY BLVD ACADEMY ACADEMY BLVD ACADEMY BLVD ACADEMY BLVD

Southeast
CITY OF COLORADO SPRINGS AIRPORT CITY OF COLORADO SPRINGS AIRPORT CITY OF COLORADO SPRINGS AIRPORT CITY OF COLORADO SPRINGS AIRPORT CITY OF COLORADO SPRINGS AIRPORT CITY OF COLORADO SPRINGS AIRPORT

HANCOC HANCOC K HANCOCK EXP COCK EXP COCK EXPY K Y Y

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BROADMOOR BROADMOOR BROADMOOR BROADMOOR BROADMOOR BROADMOOR

INDUSTRIAL BROKERAGE SERVICES:

David L. Bacon, Managing Director Aaron L. Horn, Director 719.955.2009 dbacon@sierracre.com 719.955.2020 ahorn@sierracre.com Wayne E. Beevers, Broker Associate 719.955.2023 wbeevers@sierracre.com
Information herein has been obtained from sources believed reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example only and do not represent the current or future performance of the market. This information is designed exclusively for use by Sierra Commercial Real Estate, Inc. clients, and cannot be reproduced without prior written permission of Sierra Commercial Real Estate, Inc.

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For more information regarding the MarketView, please contact one of the industrial brokers listed. Sierra Commercial Real Estate, Inc. 102 S. Tejon, Suite 750 Colorado Springs, Colorado 80903 T. 719.955.2000 F. 719.955.2019 www.sierracre.com

2012 Sierra Commercial Real Estate, Inc.