Market Report ////////// Inland Empire //////////// ///////// Los Angeles Industrial ///////////////////////////////////////// LA North

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Market Report ////////// Inland Empire //////////// ///////// Los Angeles Industrial ///////////////////////////////////////// LA North ///////////////////////////////////////// ///////////////Los Angeles///////////// ///////////////////////////////////////// ///////////Orange County/////////// ///////////////////////////////////////// ////////////Ventura///////////////// Q2 | 2019 ///////////////////////////////////////// Market Report ////////// Inland Empire //////////// ///////// Los Angeles Industrial ///////////////////////////////////////// LA North /////////Phoeni x///////////////// ///////////////////////////////////////// Although all information is furnished regarding for sale, rental or financing is from sources deemed reliable, such information has not been verified and no express representation is made nor is any to be implied as to the accuracy thereof, and it is submitted subject to errors, omissions, changes of price, rental or other conditions, prior sale, lease or financing, or withdrawal without notice. www.daumcommercial.com | O N C O R I N T E R N A T I O N A L MARKET Industrial 2019 Los Angeles North REPORT Q2 MARKET ACTIVITY KEY TAKE AWAYS ECONOMIC OUTLOOK MARKET D • Vacancy Rate: Holds steady at 2.2%. Direct Vacancy Net Absorption • Net Absorption: Was flat in Q2. Totaling a little under U.S. Employment U6 Rate 22,659 SF 23K SF of positive absorption. 2.0% • Industrial Supply: The new supply under 3.6% 7.1% construction in the Santa Clarita Valley is long overdue for the LA North market. V • Asking Rents: Pushed to all-time highs. • Sale Prices: The LA North market saw the median Overall Vacancy Gross Absorption price PSF increase by 6% to $214.46. Volume Interest Rate Changing GDP 2.2% 1,518,433 SF increased by a factor of 124.7% due to the sale of 3.7% large portfolios. (30 year fixed) 1.5% ECONOMIC OUTLOOK Under Construction Rental Rates (NNN) • Interest Rates: The yield curve inverted in Q2. A Port Traffic Y/Y Δ NYSE Performance 1,270,099 SF sign that a potential recession could happen in $1.06 the future. The Fed is not expected to cut rates 32.5% 3.3% this year. Remains cautious about the economy. • Trade: U.S. talks with China stalled in Q2. After a meeting between the 2 countries at the G20, they agreed to pause additional tariffs & resume Sale Price Change Deal Volume trade talks. Inflation Change 10 Yr. - 2 Yr. Spread • Stock Market: Indexes were volatile in Q2, but 6.0% 124.7% posted positive returns. +1.8% 25 BPS • Oil: Crude Oil was down 5% in Q2. EXPERIENCE IN A CHANGING MARKET ///////////////////////////////////////// @DAUMCOMMERCIAL Although all information is furnished regarding for sale, rental or financing is from sources deemed reliable, such information has not been verified and no express representation is made nor is any to be implied as to the accuracy thereof, and it is submitted subject to errors, omissions, changes of price, rental or other conditions, prior sale, lease or financing, or withdrawal without notice. www.daumcommercial.com | O N C O R I N T E R N A T I O N A L ///////// Market Report Q2 OVERALL VACANCY NET ABSORPTION HOLDS STEADY AT 2.2% DIRECT FIGURES DIPPED INTO THE NEGATIVE, BUT MARGINALLY Direct Vacancy Total Vacancy Historical Average Net Absorption SF Direct Overall Vacancy 6.00% 2,000,000 6.00% 5.00% 1,500,000 5.00% 1,000,000 4.00% 4.00% 2019 500,000 3.00% 3.00% 0 Q2 2.00% 2.00% (500,000) //// //// 1.00% (1,000,000) 1.00% 0.00% (1,500,000) 0.00% 2002 2003 2004 2005 2006 2008 2009 2010 2011 2013 2014 2015 2016 2018 2019 2001 2007 2012 2017 2002 2003 2004 2006 2007 2008 2010 2011 2012 2013 2014 2015 2016 2017 2019 2001 2005 2009 2018 Industrial GROSS ABORPTION ASKING RENTS | FALLS SIGNIFICANTLY TO BELOW HISTORIC AVERAGE REMAIN AT ALL-TIME HIGHS Gross Absorption SF Total Historical Average NNN Rent Direct Overall Vacancy 3,500,000 $1.20 6.00% $1.10 3,000,000 NorthL.A. $1.00 5.00% 2,500,000 $0.90 4.00% $0.80 2,000,000 $0.70 3.00% 1,500,000 $0.60 2.00% 1,000,000 $0.50 $0.40 1.00% 500,000 $0.30 0 $0.20 0.00% 2001 2003 2004 2005 2007 2008 2009 2010 2011 2012 2013 2014 2016 2017 2018 2002 2006 2015 2019 2001 2002 2003 2006 2007 2008 2009 2010 2011 2012 2014 2015 2016 2017 2018 2019 2004 2005 2013 Although all information is furnished regarding for sale, rental or financing is from sources deemed reliable, such information has not been verified and no express representation is made nor is any to be implied as to the accuracy thereof, and it is submitted subject to errors, omissions, changes of price, rental or other conditions, prior sale, lease or financing, or withdrawal without notice. www.daumcommercial.com | O N C O R I N T E R N A T I O N A L ///////// Market Report Q2 LEASING ACTIVITY CONSTRUCTION ACTIVITY DECLINED IN Q2 FROM STRONG Q1 INCREASED IN Q2 WITH NEW DEVELOPMENTS IN THE SCV Leasing Activity SF Direct Leasing Activity SF Sublet Under Construction SF 3,000,000 2,500,000 2,500,000 2,000,000 2,000,000 1,500,000 2019 1,500,000 1,000,000 1,000,000 Q2 500,000 500,000 //// //// 0 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2013 2014 2015 2016 2017 2018 2019 2001 2012 2001 2002 2003 2006 2007 2008 2009 2010 2011 2012 2014 2015 2016 2017 2018 2019 2004 2005 2013 SALES PRICES INCREASED 6% FROM Q1 TO $214.46 PSF Industrial VOLUME SKYROCKETED TO HISTORIC HIGH IN Q2 | Antelope Valley Conejo Valley Santa Clarita Valley SFV-East SFV-West Med. Price PSF $400,000,000 $300.00 $350,000,000 $250.00 NorthL.A. $300,000,000 $250,000,000 $200.00 $200,000,000 $150.00 $150,000,000 $100.00 $100,000,000 $50,000,000 $50.00 $0 $0.00 2001 2002 2004 2005 2006 2008 2009 2010 2012 2013 2014 2016 2017 2018 2019 2003 2007 2011 2015 Although all information is furnished regarding for sale, rental or financing is from sources deemed reliable, such information has not been verified and no express representation is made nor is any to be implied as to the accuracy thereof, and it is submitted subject to errors, omissions, changes of price, rental or other conditions, prior sale, lease or financing, or withdrawal without notice. www.daumcommercial.com | O N C O R I N T E R N A T I O N A L ///////// Market Report Q2 SQUARE FOOT BREAKDOWN– 166,486,073 SF MARKET SIZE VACANCY BREAKDOWN Direct Vacancy Rate Overall Vacancy Rate 6% 2% 5.0% 4.5% 28% 4.0% 4.4% 14% Antelope Valley 4.2% 3.5% Conejo Valley 3.5% 3.6% 3.0% 2019 Santa Clarita Valley 2.5% 2.5% 2.0% 2.4% Q2 SFV-East 2.2% 1.5% SFV-West 1.0% 1.2% 1.3% 0.5% //// 0.0% 50% Antelope Conejo Santa Clarita SFV-East SFV-West Valley Valley Valley Industrial | AVERAGE RENT PSF VOLUME BREAKDOWN Average Industral Rent Sales Volume Price PSF $1.60 $350,000,000.00 $250.00 $1.40 $300,000,000.00 $200.00 NorthL.A. $1.43 $250,000,000.00 $1.20 $1.26 $200,000,000.00 $150.00 $1.00 $1.13 $150,000,000.00 $100.00 $0.80 $100,000,000.00 $0.87 $50.00 $0.60 $0.77 $50,000,000.00 $0.00 $0.00 $0.40 $0.20 $0.00 Antelope Conejo Santa SFV-East SFV-West Valley Valley Clarita Valley Although all information is furnished regarding for sale, rental or financing is from sources deemed reliable, such information has not been verified and no express representation is made nor is any to be implied as to the accuracy thereof, and it is submitted subject to errors, omissions, changes of price, rental or other conditions, prior sale, lease or financing, or withdrawal without notice. www.daumcommercial.com | O N C O R I N T E R N A T I O N A L ///////////////////////////////////////// ///////////////Los Angeles///////////// ///////////////////////////////////////// ///////////Orange County/////////// ///////////////////////////////////////// ////////////Ventura///////////////// ///////////////////////////////////////// Economic Overview ////////// Inland Empire //////////// ///////// Q2 2019 ///////////////////////////////////////// /////////Phoeni x///////////////// ///////////////////////////////////////// Although all information is furnished regarding for sale, rental or financing is from sources deemed reliable, such information has not been verified and no express representation is made nor is any to be implied as to the accuracy thereof, and it is submitted subject to errors, omissions, changes of price, rental or other conditions, prior sale, lease or financing, or withdrawal without notice. www.daumcommercial.com | O N C O R I N T E R N A T I O N A L Q2 GDP IN Q1 UPDATED TO 3.1%. Q2 ESTIMATE IS 1.5% PORT ACTIVITY INCREASED IN Q1, GREATER AMOUNT OF EMPTIES Real GDP Average Real GDP Imports Exports Empties 10% 7,000,000 8% 6% 6,000,000 2019 4% 5,000,000 2% 4,000,000 Q2 0% -2% 3,000,000 //// //// -4% 2,000,000 -6% 1,000,000 -8% -10% 0 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 3Q 1Q 2009 2010 2011 2012 2013 2014 2015 2016 2017 20182019 *1.5% for 2Q19 based on Fed Reserve Bank of Atlanta "GDP Now" Forecast UNEMPLOYMENT CONTINUES DOWNWARD TREND MOST INDUSTRY SECTORS CONTINUE TO SEE GROWTH Recession U6 Rate Official Rate Government 4 18% Other Services 32 Leisure and Hospitality 75 16% Education and Health Services 172 14% Professional and Business Services 114 12% Financial Activities 26 Information -11 10% Utilities -1.2 Overview National Economic 8% Transportation and Warehousing 3.2 6% Retail Trade -36 Wholesale Trade 18 4% Manufacturing 5 2% Construction 49 0% Mining and Logging 2 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 -50 -25 0 25 50 75 100 125 150 175 200 Although all information is furnished regarding for sale, rental or financing is from sources deemed reliable, such information has not been verified and no express representation is made nor is any to be implied as to the accuracy thereof, and it is submitted subject to errors, omissions, changes of price, rental or other conditions, prior sale, lease or financing, or withdrawal without notice.
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