1441 Montiel Road, Escondido

MARKET OVERVIEW | 4TH QTR 2018

SAN DIEGO COUNTY INDUSTRIAL

grow an additional 3.1% in 2019, above its 10-year average of 2.7%. Continuing to bode well for the industrial marketplace is that economic activity in the manufacturing sector again expanded in December, with an ISM index reading of 54.1% compared to 59.3% in November. An ISM reading above 50% indicates that the manufacturing economy is generally expanding; below 50% indicates that it is generally contracting. The overall economy grew for the 116th consecutive month in the U.S. Of the 18

ECONOMY The San Diego employment market continued to record job growth, adding 26,400 jobs (+1.8%) year-over-year through November 2018.1Duringthesame timeperiod, theunemployment rate decreased 30 basis points (bps), dropping to 3.2%. Also worth noting, the current rate is 270 bps below the 28-year average of 5.9%. All employment sectors are expected to grow at a combined growth rate of 1.3% in 2019. San Diego’s economy of $231.8 billion2 as measured by gross regional product is forecasted to

manufacturing industries, 11 reported growth in December of 2018. MARKET OVERVIEW At the close of 2018, industrial vacancy (including sublease) in the San Diego marketplace stood at 5.4%, 40 basis points (bps) higher than last quarter and 60 bps higher compared to a year ago. Q4 2018 is the first quarter in the past five consecutive quarters that overall vacancy has surpassed the 5% threshold.

OFFERING MEMORANDUM

45