C&W Industrial Insider Year-End Report_Q4-2018

Industrial Insider

Y E A R - E N D R E P O R T | Q 4 2 0 1 8

Kurt Griffin, SIOR Executive Managing Director +1 972 663 9818 kurt.griffin@cushwake.com

Nathan Orbin, SIOR Executive Managing Director +1 972 663 9819 nathan.orbin@cushwake.com

Ann Jaggars Analyst +1 972 663 9775 ann.jaggars@cushwake.com

Cushman &Wakefield Dallas/Fort Worth

2

Q4 2018

Industrial Insider Year-End Report

Table of Contents

4

Year-End Update

6

Dallas Market Overview

18

Allen/McKinney

22

Alliance/North Fort Worth

28

Brookhollow/Trinity

32

DFW Airport

38

East Fort Worth

42

Far North/I-35

46

Garland/Mesquite

52

Great Southwest

58

North Dallas/Metropolitan

62

Pinnacle/Turnpike

66

Redbird

70

Richardson/Plano

74

South Dallas

80

South Fort Worth

84

Valwood/N Stemmons

88

Walnut Hill/Stemmons

Q4 2018

3

Cushman &Wakefield Dallas/Fort Worth

75

380

380

35

35E

380

35W

ALLEN/MCKINNEY

287

FAR NORTH I-35

75

35E

121

114

RICHARDSON/PLANO

VALWOOD/ STEMMONS

114

35W

NORTH DALLAS/ METROPOLITAN

35E

121

75

287

ALLIANCE

635

GARLAND

DFW AIRPORT

114

635

WALNUT HILL/ STEMMONS

360

635

114

121

12

NORTH FORT WORTH

12

35E

30

199

183

183

CENTRAL DALLAS

BROOKHOLLOW/ TRINITY

820

75

820

EAST FORT WORTH

35W

80

PINNACLE/ TURNPIKE

121

WEST FORT WORTH

360

30

MESQUITE

CENTRAL FORT WORTH

30

12

35E

30

GREAT SOUTHWEST

20

45

30

12

820

175

287

20

12

20

REDBIRD

20

820

20

20

67

35E

175

20

SOUTH DALLAS

287

377

45

360

35W

SOUTH FORT WORTH

67

35E

FOR THE FOURTH STRAIGHT YEAR AND THE ONLY FOUR YEARS IN ITS HISTROY, THE DFW INDUSTRIAL MARKET EXCEEDED 20 MSF IN NET ABSORPTION

4 Q4 2018

Industrial Insider Year-End Report

Year-End Update

Welcome back to our Industrial Insider report. We hope this holiday season finds everyone well. Our team is excited to present the latest update on the Dallas/Fort Worth industrial market with our Industrial Insider – 2018 Year- End Report. In this report, we summarize the performance of the DFW industrial market in 2018 and inform you on what can be expected for 2019. As the year comes to a close, we have tracked 22.9 MSF of overall net absorption for the greater DFW industrial market, marking its fourth straight year exceeding 20 MSF. Construction activity remained elevated with year-end completions reaching 26.9 MSF and an additional

21.7 MSF currently under construction. Overall vacancy increased by 60 bps year-over-year (7.1%), but still remains well below the 15-year historical average (9.2%) despite record-high levels of new supply. Looking ahead for 2019, we believe the DFW market will continue to see robust activity. Year-end active tenant requirements look strong at 23.4 MSF, especially compared to 2017’s 17.7 MSF. We hope you find this special Year-End Update edition of our Industrial Insider informative. The year-end numbers for 2018 make us optimistic for the year ahead, as our market continues to break records with strong growth. Wishing everyone a great finish to 2018 and a very Happy New Year.

30

ROCKWALL

Kurt Griffin, SIOR Executive Managing Director +1 972 663 9818 kurt.griffin@cushwake.com

Nathan Orbin, SIOR Executive Managing Director +1 972 663 9819 nathan.orbin@cushwake.com

Ann Jaggars Analyst +1 972 663 9775 ann.jaggars@cushwake.com

Q4 2018

5

Cushman &Wakefield Dallas/Fort Worth

6 Q4 2018

Industrial Insider Year-End Report

DFW Overview

Q4 2018

7

Cushman &Wakefield Dallas/Fort Worth

DFW Overview

The story remains the same for Dallas- Fort Worth’s industrial market at the end of 2018. The enthusiastic interest and focus DFW has seen from tenants, developers and investors continued, even heightening throughout 2018. The thriving DFW economy along with persisting population and employment growth remain essential contributors to the industrial market. At year-end, strong industrial demand throughout the DFW market prevails, as seen by the 22.9 MSF of net absorption for the year and 23.4 MSF of active tenant requirements.

industrial market has sustained an overall vacancy (7.1%) beneath its 15- year historical average (9.2%). Great Southwest continues to be the hottest submarket in DFW. It accounted for 43% of the overall market’s net absorption with 9.7 MSF. GSW’s level of market activity was followed by South Dallas, with its record-breaking 6.4 MSF of net absorption. Looking ahead, we don’t see any signs of a slowdown in the Dallas-Fort Worth industrial market. Our team remains very optimistic as DFW is well positioned to see elevated demand and activity throughout 2019.

DFW INDUSTRIAL SUBMARKET LEADERS AT YEAR- END ARE GREAT SOUTHWEST, SOUTH DALLAS, DFW AIRPORT & NORTH FW/ALLIANCE WITH NET ABSORPTIONS OF 9.7 MSF, 6.4 MSF, 2.8 MSF AND 2.3 MSF, RESPECTIVELY

Despite the delivery of nearly 27 MSF of new supply in 2018, the DFW

MARKET SUMMARY

2010 2011

2012 2013 2014 2015 2016 2017 2018

614.9 616.9 619.0 626.4 643.5 663.1 684.3 713.5 741.3

Inventory (MSF) Overall Net Absorption (MSF) Overall Vacancy

2.9 12.5 12.1

17.4 15.6 20.2 23.7 25.9 22.9

12.1% 10.4% 8.7% 7.0% 7.1% 6.8% 6.0% 6.5% 7.1%

Completions (MSF)

1.5

2.0 2.1

7.4

17.1

19.6 21.2 29.2 26.9

Under Construction (MSF)

1.4

2.0 4.0 13.9 16.6 20.3 26.6 19.3 21.7

8 Q4 2018

Industrial Insider Year-End Report

VACANCY

15-Year Historical Average = 9.2%

14.0%

15-YEAR HISTORICAL AVERAGE = 9.2%

12.0%

10.0%

8.0%

6.0%

4.0%

2.0%

0.0%

Q4 2010 Q4 2011

Q4 2012 Q4 2013 Q4 2014 Q4 2015 Q4 2016 Q4 2017 Q4 2018

OVERALL VACANCY RATE

HISTORICAL AVERAGE

NET ABSORPTIONS / COMPLETIONS

NEW SUPPLY

5-YEAR HISTORICAL AVERAGE = 18.9 MSF

Title

5-Year Historical Average = 18.9 MSF

35.0

35.0

30.0

30.0

25.0

25.0

20.0

20.0

15.0 Millions

15.0 Millions

10.0

10.0

5.0

5.0

0.0

0.0

2010 2011

2012 2013 2014 2015 2016 2017 2018

2010 2011

2012

2013

2014 2015

2016 2017

2018

DELIVERED

5-YEAR HISTORICAL AVERAGE

OVERALL NET ABSORPTION COMPLETIONS

Q4 2018

9

Cushman &Wakefield Dallas/Fort Worth

10 Q4 2018

Industrial Insider Year-End Report

DFW Overview

Overall Vacancy Rate

2018 Net Absorption

Under Construction

2018 Completions

Building Size (SF)

Inventory

Allen/McKinney

7,976,779

6.5%

147,478

30,954

455,722

Brookhollow/Trinity

48,802,343

1.9%

134,008

0

0

Central Dallas

14,424,995

2.6%

-10,325

0

0

DFW Airport

83,137,608

8.4%

2,840,268

3,819,540

3,824,961

Far North/I-35

18,656,892

4.5%

314,006

564,756

587,198

Garland

44,720,350

7.9%

294,337

249,097

789,400

Great Southwest

111,912,351

5.3%

9,743,093

4,664,683

4,989,173

Mesquite

18,518,620

10.1%

207,070

1,855,109

520,666

North Dallas/Metropolitan

19,367,912

6.9%

-441,725

0

0

Pinnacle/Turnpike

27,774,375

9.0%

-1,089,537

2,160,444

189,200

Redbird

22,284,459

2.6%

152,953

0

154,960

Richardson/Plano

36,456,549

6.7%

234,913

738,740

284,908

Rockwall

2,729,554

0.1%

0

650,000

0

South Dallas

53,922,486

20.4%

6,369,294

1,312,850

8,830,071

Valwood/N Stemmons

50,597,930

4.6%

591,408

803,445

235,900

Walnut Hill/Stemmons

22,165,365

2.4%

-23,069

389,234

0

DALLAS TOTAL

583,448,568

7.2%

19,464,172

17,238,852

20,862,159

Alliance

42,560,908

11.6%

1,583,364

2,487,055

3,987,073

Central Fort Worth

16,008,482

2.2%

-144,522

0

0

East Fort Worth

23,482,411

6.0%

67,826

64,800

0

North Fort Worth

44,291,372

5.1%

725,536

1,148,517

1,686,155

South Fort Worth

27,204,944

4.8%

1,067,497

754,585

308,061

West Fort Worth

4,344,345

9.7%

90,000

0

90,000

FORT WORTH TOTAL

157,892,462

6.7%

3,389,701

4,454,957

6,071,289

DFW TOTAL

741,341,030

7.1%

22,853,873

21,693,809

26,933,448

Q4 2018

11

Cushman &Wakefield Dallas/Fort Worth

Supply Completed Construction

Completed Construction

317,446

355,121

3,275,964

FIRST GENERATION VACANCIES

2,538,468

10,130,106

705,929

2,267,582

1,602,265

235,900

84,948

189,200

Allen/McKinney Far North/I-35 Mesquite Pinnacle/Turnpike Redbird Walnut Hill/Stemmons

Alliance Garland N Stemmons/Valwood South Dallas East Ft. Worth

DFW Airport GSW

North Ft Worth South Ft Worth Richardson/Plano

12 Q4 2018

Industrial Insider Year-End Report

SUM OF AVAILABLE SPACE - Completed Construction

Building Size (SF)

100,000-249,999 250,000-499,999 500,000-749,999 750,000+

Grand Total

Allen/McKinney

317,446

317,446

Alliance

234,277

1,246,089

705,956

1,089,642

3,275,964

DFW Airport

559,449

978,435

1,000,584

2,538,468

Garland

326,970

378,959

705,929

GSW

683,658

1,583,924

2,267,582

N Stemmons/Valwood

235,900

235,900

North Ft Worth

804,874

632,670

164,721

1,602,265

Pinnacle/Turnpike

189,200

189,200

South Dallas

866,204

1,672,648

2,508,363

5,082,891

10,130,106

South Ft Worth

355,121

355,121

Richardson/Plano

84,948

84,948

GRAND TOTAL

4,302,926

6,847,846

3,379,040

7,173,117

21,702,929

COUNT OF AVAILABLE SPACE - Completed Construction

(VACANCY WITHIN RANGE)

Building Size (SF)

100,000-249,999 250,000-499,999 500,000-749,999 750,000+

Grand Total

Allen/McKinney

2

2

Alliance

1

4

1

1

7

DFW Airport

5

3

1

9

Garland

2

1

3

GSW

7

8

15

N Stemmons/Valwood

1

1

North Ft Worth

4

2

1

7

Pinnacle/Turnpike

1

1

South Dallas

5

4

4

6

19

South Ft Worth

2

2

Richardson/Plano

1

1

GRAND TOTAL

29

24

6

8

67

Q4 2018

13

Cushman &Wakefield Dallas/Fort Worth

Supply

Under Construction

439,833

500,555

389,234

620,685

1,208,044

345,280

UNDER CONSTRUCTION VACANCIES

1,281,714

249,166

1,347,738

1,123,517

832,979

151,176

Allen/McKinney Far North/I-35 Mesquite Pinnacle/Turnpike Redbird Walnut Hill/Stemmons

Alliance Garland N Stemmons/Valwood South Dallas East Ft. Worth

DFW Airport GSW

North Ft Worth South Ft Worth Richardson/Plano

14 Q4 2018

Industrial Insider Year-End Report

SUM OF AVAILABLE SPACE - Under Construction

Building Size (SF)

100,000-249,999 250,000-499,999 500,000-749,999 750,000+

Grand Total

Alliance

500,555

500,555

DFW Airport

449,166

573,534

185,344

1,208,044

Far North/I-35

345,280

345,280

Garland

249,166

249,166

GSW

545,066

802,672

1,347,738

Mesquite

248,890

584,089

832,979

N Stemmons/Valwood

151,176

151,176

North Ft Worth

100,029

1,023,488

1,123,517

Pinnacle/Turnpike

1,281,714

1,281,714

South Ft Worth

323,845

296,840

620,685

Walnut Hill/Stemmons

389,234

389,234

Richardson/Plano

439,833

439,833

GRAND TOTAL

3,241,685

1,673,046

2,551,702

1,023,488

8,489,921

COUNT OF AVAILABLE SPACE - Under Construction

(VACANCY WITHIN RANGE)

Building Size (SF)

100,000-249,999 250,000-499,999 500,000-749,999 750,000+

Grand Total

Alliance

1

1

DFW Airport

2

2

1

5

Far North/I-35

2

2

Garland

2

2

GSW

4

2

6

Mesquite

1

1

2

N Stemmons/Valwood

1

1

North Ft Worth

1

1

2

Pinnacle/Turnpike

2

2

South Ft Worth

2

1

3

Walnut Hill/Stemmons

2

2

Richardson/Plano

3

3

GRAND TOTAL

20

5

5

1

31

Q4 2018

15

Cushman &Wakefield Dallas/Fort Worth

Demand

ACTIVE REQUIREMENTS TOTALING*

AVERAGE REQUIREMENT

23,445,000 SF 601,154 SF

*NOTE: 150,000 SF +

ESTIMATED OCCUPANCY TIMELINE

HISTORICAL REQUIREMENTS (SF)

Dec 2018

16 Q4 2018

Industrial Insider Year-End Report

REQUIREMENTS BY SIZE

Size (SF)

Requirements

1,000,000 +

9

500,000 - 999,999

13

250,000 - 499,999

11

100,000 - 249,999

6

REQUIREMENTS BY BROKERAGE FIRM (SF)

REQUIREMENTS BY SUBMARKET (SF)*

TA B L E O F CON T E N T S

16,000,000

*Requirements looking market wide will be included in multiple markets

Q4 2018

17

Cushman &Wakefield Dallas/Fort Worth

18 Q4 2018

Industrial Insider Year-End Report

Allen/McKinney

Q4 2018

19

Cushman &Wakefield Dallas/Fort Worth

Allen/McKinney

OBSERVATIONS & TRENDS

• Located on the northeastern most edge of the DFW market surrounded by heavy residential population • Most new supply to this submarket comes from built-to-suit, shallow bay, and high-finish deals (flex space) • Low vacancy and positive overall absorption have motivated planning and ground breaking of several new speculative developments –– Hunt Southwest delivered a speculative 202K SF front-park, rear-load at I-75 and Wilmeth Road –– Dalfen delivered McKinney Fulfillment Center, a speculative 115K SF front-park, rear-load at the SEC of Redbud Blvd and Corporate Drive in McKinney –– Sentinel Capital broke ground on Phase I of McKinney National Business Park with two 75K SF rear-load speculative buildings just west of McKinney National Airport on FM 546 SELECT NEW DEVELOPMENTS:

75

380

ALLEN/MCKINNEY

ALLEN

75

MURPHY

RICHARDSON

75

30

635

MARKET SUMMARY

ND

30

2010 2011

2012 2013 2014 2015 2016 2017 2018

LAS

80

6.4

6.7

6.7

6.8

6.9

6.9

7.3

7.5

8.0

Inventory (MSF)

Overall Net Absorption (MSF)

(224,973) 98,155

32,900 194,810 499,072 338,526 470,371 106,799 147,478

FORNEY

45

12

175

13.8% 16.3% 15.8% 13.8% 8.0% 3.1% 2.3% 3.4% 6.5% 20

Overall Vacancy

BALCH SPRINGS

20

108,000 305,000

0

66,000 117,261

0

423,927 198,000 455,722

Completions (MSF) HUTCHINS

175

Under Construction (MSF) 45

0

66,000 66,000 117,261

0

291,620 108,000 140,000 30,954

ANCASTER

WILMER

20 Q4 2018

Industrial Insider Year-End Report

VACANCY

Historical Average = 6.5%

18.0%

16.0%

HISTORICAL AVERAGE = 6.5%

14.0%

12.0%

10.0%

8.0%

6.0%

4.0%

2.0%

0.0%

Q4 2012

Q4 2013

Q4 2014

Q4 2015

Q4 2016

Q4 2017

Q4 2018

OVERALL VACANCY RATE

HISTORICAL AVERAGE

NET ABSORPTIONS / COMPLETIONS

NET ABSORPTION / COMPLETIONS

0.6

0.5

0.4

0.3

Millions

0.2

0.1

0.0

2012

2013

2014

2015

2016

2017

2018

OVERALL NET ABSORPTION COMPLETIONS

TA B L E O F CON T E N T S

Q4 2018

21

Cushman &Wakefield Dallas/Fort Worth

22 Q4 2018

Industrial Insider Year-End Report

Alliance/ North Fort Worth

Q4 2018

23

Cushman &Wakefield Dallas/Fort Worth

Alliance/North Fort Worth

The North Fort Worth and Alliance submarkets are situated along I-35W on the northwest edge of DFW. Both submarkets benefit from proximity to Alliance’s Global Logistics Hub, which includes the BNSF Railway Intermodal Terminal, Alliance Airport, and UPS and FedEx hubs. While Alliance has traditionally been a finite submarket mostly controlled by Hillwood, other developers are entering the area. There are currently at least ten other developers that have acquired or are actively pursuing developable land sites in Alliance. North Fort Worth is an infill submarket with few remaining large land parcels DENTON 35E 35

available for development. The submarket’s tenant base has a high percentage of rail users and light manufacturing. New supply delivered in 2018 for Alliance and North Fort Worth reached nearly 5.7 MSF, which topped historical record highs for deliveries in the submarkets combined. The activity from a supply standpoint has been met by high demand with over 15.5 MSF of net absorption since 2016. Both North Fort Worth and Alliance will continue to evolve and grow as a broader mix of developers begin to enter the area. 75

THERE ARE CURRENTLY AT LEAST TEN DEVELOPERS THAT HAVE ACQUIRED OR ARE ACTIVELY PURSUING DEVELOPABLE LAND SITES IN ALLIANCE 380

380

LITTLE ELM

CORINTH

35W

FRISCO

87

ALLEN

OBSERVATIONS & TRENDS HIGHLAND VILLAGE

75

PLANO

• New supply delivered in 2018 reached record highs for the submarkets combined, with 70% of the deliveries occurring in Alliance • DHL Real Estate Solutions sold the first phase of Elizabeth Creek Gateway in a foreword to State Farm - the two speculative buildings total 1.2 MSF and delivered this month without pre-leasing activity • Northpoint Development entered a joint-venture with the MT Cole Family Trust on +/- 1,100 acres to the north-east of the BNSF Intermodal Terminal – the JV has plans to break ground with two speculative buildings of 1.5 MSF and 1 MSF during the first quarter of 2019 • Trammell Crow Company delivered over 1.6 MSF of spec product in 3 buildings, the largest of which totaled just under 1.1 MSF MURPHY RICHARDSON IRVING FARMERS BRANCH HIGHLAND PARK DALLAS ADDISON CARROLLTON 30 635 635 635 35E 35E 35E 30 12 114 114 121 183 121 12 75 75

FLOWER MOUND

114

ROANOKE

114

SOUTHLAKE

35W

GRAPEVINE

287

ALLIANCE

KELLER

NORTH RICHLAND HILLS

360

COLLEYVILLE

121

NORTH FORT WORTH

BEDFORD

SAGINAW

EULESS

183

HALTOM CITY

820

820

35W

80

121

360

30

WHITE SETTLEMENT

GRAND PRAIRIE

ARLINGTON

12

FORT WORTH

35E

30

45

12

820

175

24 Q4 2018

287

BALCH SPRINGS

12

20

820

20

20

Industrial Insider Year-End Report

MARKET SUMMARY - Alliance

2010 2011

2012 2013 2014 2015 2016 2017 2018

27.6

27.6

27.6

28.8 31.5 34.5

36.4 38.1

42.6

Inventory (MSF)

Overall Net Absorption (MSF)

169,458 746,052

1.4

1.4

1.4

1.3

2.5

4.0

1.6

16.4% 13.8% 8.9% 7.5% 11.2% 15.1% 12.4% 6.0% 11.6%

Overall Vacancy

243,496 25,000

0

1.1

2.7

3.0

1.8

1.7

4.0

Completions (MSF)

73,726

48,726

48,726

3.8

2.8

1.2

1.7

2.7

2.5

Under Construction (MSF)

MARKET SUMMARY - North Fort Worth

2010 2011

2012 2013 2014 2015 2016 2017 2018

35.8

35.9

36.0

36.0

36.6

37.1

40.6

42.6 44.3

Inventory (MSF)

Overall Net Absorption (MSF)

367,833 541,333 328,639 373,041 309,287 (837,861) 4.5

2.3

725,536

6.6% 5.3% 4.9% 3.8% 4.4% 8.1% 4.7% 4.0% 5.1%

Overall Vacancy

0

58,603 188,000

0

541,216 559,367

3.4

2.1

1.7

Completions (MSF)

0

188,000

0

0

0

3.3

1.4

1.1

1.1

Under Construction (MSF)

NET ABSORPTIONS/ COMPLETIONS

VACANCY

Historical Average = 6.9% HISTORICAL AVERAGE = 6.9%

NET ABSORPTION / COMPLETIONS

14.0%

8.0

7.0

12.0%

6.0

10.0%

5.0

8.0%

4.0

6.0%

Millions

3.0

4.0%

2.0

2.0%

1.0

0.0

0.0%

2012

2013

2014

2015

2016

2017

2018

Q4 2012

Q4 2013

Q4 2014

Q4 2015

Q4 2016

Q4 2017

Q4 2018

OVERALL NET ABSORPTION COMPLETIONS

OVERALL VACANCY RATE

HISTORICAL AVERAGE

Q4 2018

25

Cushman &Wakefield Dallas/Fort Worth

Alliance/North Fort Worth

SELECT LEASING ACTIVITY Tenant Building

Location

SF Leased

Alliance Northport Building 3

I-35W & Sam Lee Ln Northlake

Stanley Black & Decker

1,214,000

1011 I-35 W Fort Worth

Dematic

Synergy Crossing

707,000

3300 Eagle Pky Fort Worth 3300 Eagle Pky Fort Worth 920 Westport Pky Haslet

XPO Logistics

Alliance Center North 15

318,768

Smart Warehousing

Alliance Center North 15

269,494

ATAC

Alliance Westport 3

183,908

899 Henrietta Creek Rd Roanoke 5650 Alliance Gateway Fwy Fort Worth

Lanter Delivery Systems Alliance Gateway 49

170,000

Alliance Sports Group Alliance Gateway 2

142,000

NEW DEVELOPMENTS

Completed - Last 12Months

Building

Developer/Owner

RBA SF Available % Leased

TCC 35 Eagle - Building A

Trammell Crow / Prudential

1,089,642

1,089,642

0%

Elizabeth Creek Gateway - Building A DHL / State Farm

705,956

705,956

0%

Synergy Crossing - Building 200

Ironwood / TCRG Properties

503,500

202,000

60%

Elizabeth Creek Gateway - Building B DHL / State Farm

493,500

493,500

0%

Andrews Distributing at Railhead

Andrews Distributing Company

400,000

0

100%

Ridge Railhead - Building 2

Ridge / Morgan Stanley

362,670

362,670

0%

Speedway Distribution Ctr - Building C IDI Logistics

316,128

316,128

0%

TCC 35 Eagle - Building H

Trammell Crow / Prudential

312,733

234,461

25%

Park 820 - Building 2

Scannell

270,000

270,000

0%

TCC 35 Eagle - Building J

Trammell Crow / Prudential

234,277

234,277

0%

Park 820 - Building 1

Scannell

220,229

220,229

0%

Fossil Creek Crossing - Building 1

KKR

219,396

219,396

0%

Fossil Creek Crossing - Building 2

KKR

213,089

213,089

0%

TOTALS

14.6%

26 Q4 2018

Industrial Insider Year-End Report

Under Construction

Building Parc North Building 5

Developer/Owner

RBA

SF Available

Est. Delivery

EastGroup

100,036

100,036

Jan-19

Alliance Northport 3 Stanley Black & Decker BTS

Hillwood

1,029,846

0

Jun-19

Alliance Northport 1

Hillwood

500,555

500,555

Jun-19

Interstate Crossing

Hunt Southwest

1,023,488

1,023,488

Sep-19

Synergy Crossing 500 Dematic BTS

Ironwood / TCRG Properties

707,000

0

Oct-19

Planned Break Ground 2019 Planned Break Ground 2019 Planned Break Ground 2019

Alliance Center North 3

Hillwood

783,465

783,465

Intermodal Logistics Center Building 2 Intermodal Logistics Center Building 1

Northpoint Development

1,517,000

1,517,000

Northpoint Development

1,070,000

1,070,000

FORECAST The construction pipeline for both Alliance and North Fort Worth will remain active well into 2019 with 3.6 MSF currently under construction. An increase in vacancy for Alliance is likely - a result of an additional 3.2 MSF of speculative product slated to break ground in the submarket next month. Competitive developers will continue their effort to overcome Alliance’s barriers to entry with acquisition and development of non-developer-controlled sites in the area.

TA B L E O F CON T E N T S

Q4 2018

27

Cushman &Wakefield Dallas/Fort Worth

28 Q4 2018

Industrial Insider Year-End Report

Brookhollow/ Trinity

Q4 2018

29

FRISCO

Cushman &Wakefield Dallas/Fort Worth

ALLEN

LAND AGE

75

PLANO

Brookhollow/Trinity 121

35E

MURPHY

ADDISON

OBSERVATIONS & TRENDS

RICHARDSON

CARROLLTON

35E

121

75

• Most of the Brookhollow/Trinity’s building stock was built several cycles ago and struggles to meet modern day supply chain and distribution demands • Demand in this submarket is driven by companies with smaller operations and/or local, last mile fulfillment and distribution • The majority of the submarket’s tenant base occupies smaller spaces – current availabilities consist of only 5 spaces that are 50,000 SF and greater, with only one of which is above 100,000 SF • This infill submarket is primarily built-out and new supply isn’t likely until vacancy increases and developers can make sense of redeveloping old product FORNEY 20 30 30 80 175

635

FARMERS BRANCH

114

635

635

114

12

12

HIGHLAND PARK

35E

183

BROOKHOLLOW/ TRINITY

IRVING

75

DALLAS

30

GRAND PRAIRIE

12

35E

45

12

BALCH SPRINGS

12

20

20

HUTCHINS

67

35E

175

DUNCANVILLE

MARKET SUMMARY

45

DESOTO

2010 2011 LANCASTER

2012 2013 2014 2015 2016 2017 2018

WILMER

67

35E

47.9

47,.9

47.9

47.9

48.3

48.3

48.3

48.3

48.8

Inventory (MSF)

Overall Net Absorption (MSF)

(1.1)

398,419 137,953 245,991

1.2

572,730 532,986 64,042 20,578

8.1% 7.3% 7.0% 6.6% 4.7% 3.5% 2.4% 2.2% 2.1%

Overall Vacancy

0

21,400

0

34,400 353,161

0

0

0

0

Completions (MSF)

Under Construction (MSF)

21,400

0

139,561 185,161

0

0

0

0

0

30 Q4 2018

Industrial Insider Year-End Report

VACANCY

Historical Average = 4.0%

8.0%

HISTORICAL AVERAGE = 4.0%

7.0%

6.0%

5.0%

4.0%

3.0%

2.0%

1.0%

0.0%

Q4 2012

Q4 2013

Q4 2014

Q4 2015

Q4 2016

Q4 2017

Q4 2018

OVERAL VACANCY RATE

HISTORICAL AVERAGE

NET ABSORPTIONS/COMPLETIONS

NET ABSORPTION / COMPLETIONS

1.4

1.2

1.0

0.8

0.6 Millions

0.4

0.2

0.0

2012

2013

2014

2015

2016

2017

2018

OVERALL NET ABSORPTION COMPLETIONS

TA B L E O F CON T E N T S

Q4 2018

31

Cushman &Wakefield Dallas/Fort Worth

32 Q4 2018

Industrial Insider Year-End Report

DFW Airport

Q4 2018

33

Cushman &Wakefield Dallas/Fort Worth

DFW Airport

The DFW Airport industrial submarket has a central location with excellent access to multiple major transportation arteries in the greater DFW metroplex and enjoys the highest tenant demand for warehouse/ distribution space. The submarket’s inventory stock is composed of both fee simple ownership and DFW Airport ground leased developments. Since 2015, demand has kept up with new supply and the DFW Airport submarket has played a leading role in absorption for the overall DFW market. 380

The submarket’s lack of developable infill sites along with strong leasing velocity on the northern side of the airport motivated DFW Airport to open the southern end for ground leased development. Developers have aggressively taken advantage of this opportunity, breaking ground on over 5 MSF in 2018, 70% of which is speculative product. The submarket has also seen increased activity on the build-to-suit front with both Mars, Inc. and PPG selecting the submarket for their new facilities. 75

DEVELOPERS BROKE GROUND ON 5 MSF ON DFW AIRPORT GROUND LEASED LAND IN 2018, 70% OF WHICH IS SPECULATIVE PRODUCT, OF WHICH ONE-THIRD IS ALREADY LEASED DENTON 35E

35

LITTLE ELM

380

CORINTH

35W

FRISCO

ALLEN

HIGHLAND VILLAGE

75

PLANO OBSERVATIONS & TRENDS

35E

121

FLOWER MOUND

MURPHY • Speculative deliveries on southern DFW Airport ground leased sites accounted for nearly 75% of new supply in the submarket for 2018 • Since DFW Airport officials opened up additional land for ground leased development at the beginning of 2018, eleven different developers have been awarded sites for a total of over 13 MSF planned on about 1,000 acres • Consistently high tenant demand in the submarket continues to make sense of the increased construction activity, absorbing over 10 MSF in the last three years • Nearly 2.4 MSF (62%) of DFW Airport’s deliveries for the year 2018 occurred in Q4, justifying the slight lag in year- end net absorption numbers from year-end completions RICHARDSON HIGHLAND PARK DALLAS 30 30 635 12 75 80 75

E

114

ADDISON

SOUTHLAKE

CARROLLTON

35E

121

GRAPEVINE

635

FARMERS BRANCH

DFW AIRPORT

114

635

TH LAND LS

360

COLLEYVILLE

114

121

12

BEDFORD

EULESS

35E

183

183

IRVING

820

360

30

30

GRAND PRAIRIE

ARLINGTON

12

35E

FORNEY

45

12

175

34 Q4 2018

20

BALCH SPRINGS

12

20

20

20

Industrial Insider Year-End Report

MARKET SUMMARY

2010 2011

2012 2013 2014 2015 2016 2017 2018

62.8

62.9

63.0

65.7 70.4

74.0

76.1

79.3

83.1

Inventory (MSF)

Overall Net Absorption (MSF)

920,319

3.6

2.4

4.5

2.4

3.2

4.6

3.2

2.8

19.2% 13.5% 9.9% 6.8% 9.5% 9.7% 6.1% 5.8% 8.4%

Overall Vacancy

776,483 28,417

85,500

2.7

4.6

3.7

2.1

3.2

3.8

Completions (MSF)

Under Construction (MSF)

0

85,500

1.1

4.5

3.6

2.3

3.7

1.6

3.8

COMPLETIONS / NET ABSORPTIONS

VACANCY

Historical Average = 8.2%

.0%

NET ABSORPTION / COMPLETIONS

HISTORICAL AVERAGE = 8.5% Historical Average =8.5%

2.0 2.5 3.0 3.5 4.0 4.5 5.0

.0%

14.0%

12.0%

.0%

10.0%

.0%

8.0%

.0%

Millions

6.0%

1.0 1.5

.0%

4.0%

2.0%

.0%

0.0 0.5

0.0%

Q4 2012

Q4 2013

Q4 2014

Q4 2015

Q4 2016

Q4 2017

Q4 2018

2012 2013 2014 2015 2016 2017 2018

.0%

Q2 2010 Q2 2011

Q2 2012 Q2 2013 Q2 2014 Q2 2015 Q2 2016 Q2 2017 Q2 2018

OVERALL NET ABSORPTION COMPLETIONS

OVERALL VACANCY RATE

OVERALL VACANCY RATE

HISTORICAL AVERAGE

Q4 2018

35

Cushman &Wakefield Dallas/Fort Worth

DFW Airport

SELECT LEASING ACTIVITY Tenant Building

Location

SF Leased 1,500,000

Mars, Inc

Gateway Logistics Center

Valley View Ln, Irving

Thirty-One Gifts

Prologis Flower Mound 1

951 Garden Ridge Blvd, Flower Mound

651,518

SanMar

Airport South Logistics Center

3400 E Airfield Dr, Irving

562,640

PPG

Lakeside Ranch 530

1001 Lakeside Pky, Flower Mound

449,220

VIRA Insight

Majestic Airport Center DFW - Building 6

2701 S Valley Pky, Lewisville

329,060

American Hotel Register International Logistics Center - Building C 3801 S 20th Ave, DFW Airport

227,924

EMP Manufacturing

Prologis Park 121 - Building 3

220 N Freeport Pky, Coppell

211,000

KGP Logistics

Heritage Business Park - Building 4

801 Industrial Blvd, Grapevine

204,556

USA Shade

DFW Trade Center III

2580 Esters Blvd, Irving

170,000

Aviall

100 S Royal Lane

100 S Royal Ln, Coppell

166,704

Hotline Delivery Systems International Logistics Center - Building B 3711 S 20th Ave, DFW Airport

121,849

HOYA Optical

DFW Trade Center VIII

845 Regent Blvd, Irving

121,404

Badger Paperboard Texas International Logistics Center - Building A 3701 S 20th Ave, DFW Airport

118,634

DHL

DFW Global Logistics Centre - Building 1

1225 Mustang Dr, DFW Airport

117,000

Sunbelt Marketing

Majestic Airport Center DFW - Building 5

2900 S Valley Pky, Lewisville

109,588

NEW DEVELOPMENTS

Completed - Last 12Months

Building

Developer/Owner Copeland Commercial

RBA SF Available % Leased

DFW Commerce Center - Building 1

1,000,584 1,000,584

0%

Mary Kay BTS

Mary Kay, Inc

470,000

0

100%

Gateway Logistics Center - Building 3

Bandera Ventures / Long Warf

374,900

374,900

0%

International Logistics Center - Building C Stream / Cabot Properties

324,686

0

100%

Gateway Logistics Center - Building 1

Bandera Ventures / Long Warf

309,240

309,240

0%

Valley View DFW Airport

KKR

294,795

294,795

0%

Gateway Logistics Center - Building 2

Bandera Ventures / Long Warf

211,316

211,316

0%

International Logistics Center - Building B Stream / Cabot Properties

203,476

0

100%

Prologis Park 121 - Building 5B

Prologis

125,520

83,680

33%

Int'l Logistics Center - Building A

Stream / Cabot Properties

118,634

0

100%

Prologis Freeport West - Building 2

Prologis

111,012

111,012

0%

TOTALS

32.7%

36 Q4 2018

Industrial Insider Year-End Report

Under Construction

Building

Developer/Owner

RBA SF Available

Est. Delivery

Gateway Logistics Center - Building 5

Bandera Ventures / Long Warf

267,254

267,254

Feb-19

Gateway Logistics Center - Building 4

Bandera Ventures / Long Warf

250,312

250,312

Feb-19

Airport South Logistics Center

Robinson Weeks / San Mar

562,640

0

Mar-19

Majestic Airport Center - Building 7

Majestic Realty

306,280 306,280

Mar-19

Lakeside Ranch 530 - PPG BTS

Duke

634,564

185,344

Apr-19

DFW North IV

Huntington

198,854

198,854

Jun-19

Mars, Inc BTS

Bandera Ventures

1,500,000

0

Aug-19

Planned Break Ground 2019 Planned Break Ground 2019 Planned Break Ground 2019 Planned Break Ground 2019 Planned Break Ground 2019 Planned Break Ground 2019 Planned Break Ground 2019 Planned Break Ground 2019 Planned Break Ground 2019 Planned Break Ground 2019 Planned Break Ground 2019

TCC Passport Park - Building 1

Trammell Crow Company / CBREI

1,021,440 1,021,440

TCC Passport Park - Building 2

Trammell Crow Company / CBREI

711,360

711,360

DFW Airfield Logistics Center - Building 2 Seefried / Clarion

251,100

251,100

DFW Airfield Logistics Center - Building 1 Seefried / Clarion

194,400

194,400

DFW Park 161 - Building 8

Perot Development Co

1,422,720 1,422,720

DFW Park 161 - Building 9

Perot Development Co

648,960 648,960

DFW Park 161 - Building 11

Perot Development Co

182,000

182,000

DFW Park 161 - Building 10

Perot Development Co

156,000

156,000

Mustang Business Park - Building 2

Prologis

429,720

429,720

Mustang Business Park - Building 1

Prologis

401,280

401,280

Mustang Business Park - Building 3

Holt Lunsford Commercial

145,058

145,058

FORECAST An uptick in vacancy is likely as no slow-down on the development front is in sight for 2019; nearly 3.9 MSF is under construction in the submarket and over 4 MSF is slated to break ground. Looking ahead, tenants will continue to be attracted to the area, and we anticipate elevated absorption numbers to catch up with the influx of new supply.

TA B L E O F CON T E N T S

Q4 2018

37

Cushman &Wakefield Dallas/Fort Worth

38 Q4 2018

Industrial Insider Year-End Report

East Fort Worth

Q4 2018

39

ALLEN

HIGHLAND VILLAGE

Cushman &Wakefield Dallas/Fort Worth

75

PLANO

35E

121

FLOWER MOUND

4

East Fort Worth ROANOKE SOUTHLAKE 114

MURPHY

ADDISON

RICHARDSON

CARROLLTON

35W

35E

121

75

GRAPEVINE

287

635

OBSERVATIONS & TRENDS FARMERS BRANCH

114

KELLER

635

NORTH RICHLAND HILLS

360

COLLEYVILLE

635

• Comprised primarily of smaller, multi-tenant product developed in previous cycles • Since 2010, East Fort Worth has delivered less than 600,000 SF of new industrial product • Limited new development opportunities due to lack of available land and shallow demand • The submarket’s largest availability is the 101,896 SF building owned by STAG Industrial and previously occupied by Ecolab at 1801 Riverbend West Drive in Fort Worth • PODS occupied the remaining 67,826 SF vacancy in Riverbend West Distribution Center, a 300K SF speculative building developed by Hunt Southwest that recently traded to Pure Industrial • First Industrial sold Midway Business Park, a 93% leased 470K SF shallow bay industrial portfolio located at SH 121 and I-820, to Cohen Asset Management LANCASTER HUTCHINS WILMER BALCH SPRINGS DESOTO DUNCANVILLE HIGHLAND PARK DALLAS 20 20 45 45 30 35E 35E 35E 35E 30 12 12 12 12 114 183 12 75 67 67 80 175 175

121

BEDFORD

GINAW

EULESS

183

HALTOM CITY

IRVING

820

820

EAST FORT WORTH

35W

121

360

30

GRAND PRAIRIE

ARLINGTON

FORT WORTH

287

20

820

20

20

FOREST HILL

287

360

35W

MANSFIELD

MARKET SUMMARY

2010 2011

2012 2013 2014 2015 2016 2017 2018

22.9

22.9

22.9

22.9

23.0

23.0

23.4 23.5

23.5

Inventory (MSF)

Overall Net Absorption (MSF)

16,690 (54,492) 35,902

97,359 121,025 (127,368) 216,947 23,604

67,826

5.4% 5.7% 5.7% 5.3% 4.9% 5.8% 6.1% 6.4% 6.0%

Overall Vacancy

0

21,208 25,000

0

50,000 79,800 301,500 100,000

0

Completions (MSF)

Under Construction (MSF)

0

0

0

50,000

0

0

0

0

64,800

40 Q4 2018

Industrial Insider Year-End Report

VACANCY

Historical Average = 5.5% ISTORICAL AVERAGE = .5%

7.0%

6.0%

5.0%

4.0%

3.0%

2.0%

1.0%

0.0%

Q4 2012

Q4 2013

Q4 2014

Q4 2015

Q4 2016

Q4 2017

Q4 2018

OVERALL VACANCY RATE

HISTORICAL AVERAGE

NET ABSORPTIONS/COMPLETIONS

NET ABSORPTION / COMPLETIONS

0.4

0.3

0.3

0.2

0.2

0.1

Millions

0.1

0.0

(0.1)

(0.1)

(0.2)

2012

2013

2014

2015

2016

2017

2018

OVERALL NET ABSORPTION COMPLETIONS

TA B L E O F CON T E N T S

Q4 2018

41

Cushman &Wakefield Dallas/Fort Worth

42 Q4 2018

Industrial Insider Year-End Report

Far North/I-35

Q4 2018

43

Cushman &Wakefield Dallas/Fort Worth

Far North/I-35

OBSERVATIONS & TRENDS 75

DENTON

380

35

• Submarket surrounded by heavy residential population

35E

LITTLE ELM

380

CORINTH

35W

• Proximity to DFW Airport, rooftops and Interstate 35 drives demand

FRISCO

ALLEN

FAR NORTH I-35

HIGHLAND VILLAGE

75

• Limited available land for new development

PLANO

SELECT MARKET ACTIVITY & NEW DEVELOPMENT

35E

121

FLOWER MOUND

MURPHY

–– TIGI USA/Unilever renewed in 305,344 SF with Clarion Partners at Waters Ridge Distribution Center in Lewisville –– Toyota Motor Sales USA moved in to 121 Riverview Crossing, a 121,188 SF speculative rear-load building developed by ML Realty at 1825 Midway Road in Lewisville –– First Industrial is under construction on Phase I of First Park 121 with two speculative front-park, rear-load buildings of 220K SF and 125K SF located at Midway Rd and FM 544 in Lewisville 30 30 635 80

ROANOKE

114

ADDISON

SOUTHLAKE

RICHARDSON

CARROLLTON

35W

35E

121

75

GRAPEVINE

635

FARMERS BRANCH

114

KELLER

635

NORTH RICHLAND HILLS

360

COLLEYVILLE

114

121

12

12

BEDFORD

HIGHLAND PARK

EULESS

35E

183

183

HALTOM CITY

IRVING

75

820

W

DALLAS

121

360

30

30

GRAND PRAIRIE

ARLINGTON

12

RTH

35E

FORNEY

45

12

175

287

20

BALCH SPRINGS

12

20

820

20

20

HUTCHINS

67

35E

175

DUNCANVILLE

REST HILL

MARKET SUMMARY 287

45

360

W

DESOTO

LANCASTER

WILMER

MANSFIELD

67

35E

2010 2011

2012 2013 2014 2015 2016 2017 2018

15.4

15.4 15.6 15.7

16.0 16.1

16.8

18.1

18.7

Inventory (MSF)

Overall Net Absorption (MSF)

746,641 277,233 457,710 122,750 532,043 146,188 490,918

1.8

314,006

10.7% 9.0% 7.2% 7.0% 5.0% 4.7% 5.9% 2.8% 4.5%

Overall Vacancy

0

23,750 182,125 102,719 231,615 105,004 724,868

1.3

587,198

Completions (MSF)

Under Construction (MSF)

23,750 139,375 74,219 133,787 105,004 377,670

1.3

565,775 564,756

44 Q4 2018

Industrial Insider Year-End Report

VACANCY

Historical Average = 5.0%

8.0%

HISTORICAL AVERAGE = 5.0%

7.0%

6.0%

5.0%

4.0%

3.0%

2.0%

1.0%

0.0%

Q4 2012

Q4 2013

Q4 2014

Q4 2015

Q4 2016

Q4 2017

Q4 2018

OVERALL VACANCY RATE

HISTORICAL AVERAGE

NET ABSORPTIONS/COMPLETIONS

NET ABSORPTION / COMPLETIONS

0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0

Millions

2012

2013

2014

2015

2016

2017

2018

OVERALL NET ABSORPTION COMPLETIONS

TA B L E O F CON T E N T S

Q4 2018

45

Cushman &Wakefield Dallas/Fort Worth

46 Q4 2018

Industrial Insider Year-End Report

Garland/Mesquite

Q4 2018

47

Cushman &Wakefield Dallas/Fort Worth

Garland/Mesquite

Located on the eastern edge of the DFW metroplex, the Garland and Mesquite submarkets are attractive for their proximity to abundant labor and Interstate Freeways. Mesquite’s tenant base largely consists of 3PLs and manufacturing parts suppliers, while Garland’s has a higher percentage of owner/user tenants. The majority of Mesquite’s inventory centers around the Union Pacific Intermodal hub. Product type consists of mostly cross dock and front load space that is suitable for modern distribution requirements. The Garland submarket’s product type is more diverse, ranging from 380

multi-tenant office showroom/flex and manufacturing space to warehouse distribution, and is comprised of both older and newer building stock. Over the last five years, Garland has consistently led Mesquite in almost every statistical metric. The Garland submarket has accounted for nearly 80% of the 5 MSF of net absorption for submarkets combined over the last five years. Despite Mesquite’s low absorption numbers (a result of a small inventory and several major tenant move-outs), lease-up of new inventory delivered in the submarket has achieved 100% since 2014.

MESQUITE IS SET TO DELIVER OVER 1.8 MSF IN 2019 – THE MOST NEW INVENTORY THE SUBMARKET HAS EVER SEEN WITHIN A CALENDAR YEAR 75

RISCO

ALLEN

75

PLANO

MURPHY

OBSERVATIONS & TRENDS

SON

RICHARDSON

• Despite having zero new supply deliver in both Garland and Mesquite for the first half of the year, the combined submarkets delivered 1.3 MSF of speculative product in the last two quarters, 74% of which was pre-leased to Elements International and Quest Window Systems • Exeter Property Group’s new three-building development at the NEC of S Buckner Blvd and Eastpoint Dr in Mesquite, totaling nearly 1 MSF, is expected to deliver in the first quarter of 2019 – Viracon will be occupying Building 3, a 144,900 SF front-load • The 877K SF Ashley Furniture distribution center currently under construction in Mesquite is expected to deliver during the first half of 2019 • Hillwood landed a 1.2 MSF BTS with Goodyear in Forney and has another large BTS planned in the area for 2019

75

30

GARLAND

635

12

HIGHLAND PARK

30

75

DALLAS

80

MESQUITE

5E

FORNEY

45

12

175

20

BALCH SPRINGS

20

HUTCHINS

35E

175

45

LANCASTER

WILMER

35E

48 Q4 2018