NEWMARK GRUBB ACRES · 2016. 9. 19. · At Newmark Grubb ACRES, we appreciate the opportunity to work with our valued clients and build relationships based on creating and preserving

2016 MIDYEAR UTAH/MOUNTAIN WESTMARKET REPORT

NEWMARK GRUBB ACRES

Industrial Salt Lake County . . . . . . . . . . . . . . . . . . . . . 2 Davis and Weber Counties . . . . . . . . . . . . 13 Utah County . . . . . . . . . . . . . . . . . . . . . . . 14 Industrial Agents . . . . . . . . . . . . . . . . . . . . 15 Office Salt Lake County . . . . . . . . . . . . . . . . . . . . 16 Davis and Weber Counties . . . . . . . . . . . . 27 Utah County . . . . . . . . . . . . . . . . . . . . . . . 29 OfficeAgents . . . . . . . . . . . . . . . . . . . . . . . 30

Retail Salt Lake County . . . . . . . . . . . . . . . . . . . . 31 Statewide . . . . . . . . . . . . . . . . . . . . . . . . . . 35 Multi County . . . . . . . . . . . . . . . . . . . . . . . 36 Davis and Weber Counties . . . . . . . . . . . . 38 Utah County . . . . . . . . . . . . . . . . . . . . . . . 39 Retail Agents . . . . . . . . . . . . . . . . . . . . . . . 40

Investment Statewide . . . . . . . . . . . . . . . . . . . . . . . . . 42 Land Salt Lake County . . . . . . . . . . . . . . . . . . . 47 Investment and Land Agents . . . . . . . . . . . 51

VerticalServices GlobalCorporateServices . . . . . . . . . . . . 52 AssetServices . . . . . . . . . . . . . . . . . . . . . . 53

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Mike Falk - President Lloyd E. Allen - Senior Vice President and Principal Broker

Dear Clients, Colleagues & Friends,

The first six months of 2016 have been strong in the Utah commercial real estate market. Overall reported lease rates are steadily increasing while vacancy rates compressed across the different divisions. It is an exciting year so far for investments that none of us were quite sure we would see after a historic 2014-2015. With the closing of The Gateway retail and office properties, Broadway Centre Office, Daybreak Corporate Center, as well as the recent closing of Cottonwood Corporate Center, midyear 2016 has surpassed our expectations.

This report details markets and gives a concise up-to-date market review. Newmark professionals studied the information and established opinions to develop forecasts about trends and market activity. We know you will find the report contains valuable information about the ever-changing market place and help you make educated real estate decisions. The rest of this report provides a more in-depth analysis of specific real estate trends in Utah. Please feel free to call our professionals located at one of our three offices in Utah for additional market information.

At Newmark Grubb ACRES, we appreciate the opportunity to work with our valued clients and build relationships based on creating and preserving real estate values. It’s our job to ensure we’re doing everything in our power to help you achieve your commercial real estate goals. Our years of experience have taught us many things, but none more important than this: you are the reason for our success. Thank you for your business.

SALT LAKE CITY376 East 400 South, Suite 120Salt Lake City, Utah 84111801.578.5588

DAVIS AND WEBER COUNTIES1755 East 1450 South, Suite 100Clearfield, Utah 84015801.927.2000

UTAH COUNTY765 East 340 South, Suite 101Amercan Fork, Utah 84003

2016 MIDYEAR UTAH/MOUNTAIN WESTMARKET REPORT

NEWMARK GRUBB ACRES

2© Newmark Grubb ACRES 2016. All Rights Reserved Newmark Grubb ACRES Midyear Report 2016

At midyear 2016, the Wasatch Front industrial market maintains the momentum from 2015. Overall vacancy in Salt Lake County has remained low for the last 10 years compared to surrounding cities in the Mountain West. Year to date, positive net absorption totals to 1 million square feet. This is an increase of just over 300,000 SF compared to midyear 2015, despite total activity decreasing by 535,177 SF in comparison to midyear 2015.

Direct vacancy rate reached a low of 4.14% at midyear 2015; for midyear 2016, it has slightly increased to 4.52%. This slight increase is due to new product being delivered to the market. Demand for industrial space remains strong and new supply is quickly absorbed to meet the demand.

In the last 12 months the vacancy rate decreased across all product types except for Medium Distribution and Flex space. This increase is due to delivery of new Medium Distribution and Flex buildings. 619,718 SF delivered as of midyear 2016, with 498,634 SF being Medium Distribution and 111,484 SF came online as Flex product. While vacancy in Bulk Distribution increased from midyear 2015 to yearend 2015, going from 6.95% to 9.37% respectively, this almost 3% increase came about because of a large influx of Bulk Distribution product delivered during the second half of 2015. No new Bulk Distribution buildings have delivered during this first half of 2016, thereby resulting in a decreased vacancy to 8.14% for Bulk product.

Lease rates remained steady over the past 4 years, ranging from $0.38 to $0.40 NNN. For the first half of 2016, these rates increased to $0.42 per square foot (PSF) overall. The most significant increase comes from Flex product, with an average lease rate of $0.54 NNN PSF, a 26% rate increase compared to midyear 2015.

Increased activity in the Flex market is also reflected in the total lease transaction volume. The last time Flex lease transaction volume exceeded $10 million was at midyear 2013. 2016 has already reached $12.7 million in lease transactions. Conversely, the transaction volume for the Bulk Distribution market is at its lowest point for the past 4 years, coming in at just over $11 million.

Owner-User sales volume has continued to increase since 2012, reaching its highest point of $47 million at midyear 2016. Furthermore, Flex owner-user sales has reached its highest number in transactions in 4 years, coming in at 10 so far this year. While the overall average owner-user sales pricing PSF is around $72.55, Flex owner-user space is selling for $96.67 per square foot. If you have ever considered selling Flex product but have been reluctant, now would be a great time to reconsider.

The number of industrial investment transactions remains steady with 20 transactions for the first half of 2016. 25% of the industrial investment activity consists of Bulk Distribution product, with Bulk also making up an impressive 61% of total dollar transaction volume for industrial investment sales.

While Brexit, stock market volatility, and the 2016 presidential election may have unknown impacts on the national economy, demand for space in the Salt Lake Market is up, new product is being delivered, and with competitive rates and pricing added to the formula, the industrial market along the Wasatch Front as strong as ever.

QUICK STATSLast 12 Months Trend % Change

VacancyRate 4 .52% 0 .38%UnderConstruction 1,864,724 -32 .62%# of Leases 260 1 .96%Leased SF 4,633,639 -3 .82%Lease Rates $0 .40 4 .01%# of Sales 54 8 .00%Sold SF 1,564,817 23 .69%Sales $PSF $72 .07 1 .15%

INDUSTRIAL SALT LAKE COUNTY MARKET OVERVIEWNarrative written by: Rob Kingsford

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INDUSTRIAL SALT LAKE COUNTY MARKET OVERVIEW

Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016Net Absorption 685,835 569,671 330,416 364,642 (136,983) 926,021 251,930 753,767DirectVacancyRate 4 .15% 3 .98% 3 .77% 4 .14% 4 .73% 4 .93% 4 .71% 4 .52%

0 .00%

1 .00%

2 .00%

3 .00%

4 .00%

5 .00%

6 .00%

7 .00%

(400,000)

(200,000)

0

200,000

400,000

600,000

800,000

1,000,000

Vaca

ncy R

ate

Squa

re F

eet

NetAbsorption&DirectVacancyRate

4.14%4.93% 4.52%

0.80%

0.58%0.60%

1.21%1.18%

0.93%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

Midyear 2015 Year End 2015 Midyear 2016

Availability Overview

Direct Vacancy % Sublease Availability Contingent (Occupied) Availability

NetAbsorption&DirectVacancyRate




4 .86%

1 .67%

6 .95%

3 .16%3 .68%

4 .30%4 .86%

2 .49%

9 .37%

3 .88% 3 .82%

2 .27%

3 .75%

1 .90%

8 .14%6 .83%

4 .06%

1 .88%

0 .00%

1 .00%

2 .00%

3 .00%

4 .00%

5 .00%

6 .00%

7 .00%

8 .00%

9 .00%

10 .00%

Manufacturing GeneralPurpose BulkDistribution MediumDistribution Flex SpecialPurpose

DirectVacancybyProductType

Midyear 2015 Year End 2015 Midyear 2016

607,642 , 46%

125,867 , 10%

430,266 , 33%

48,398 , 4%90,000 , 7%

Current Under Construction Overview

BulkDistributionSpecialPurposeFlexMedium DistributionGeneral Purpose

DirectVacancybyProductType

CurrentUnderConstructionOverviewbySF



* All lease transaction data exclude renewal transactions.

415,874

90,000

48,398

277,476

All Manufacturing GeneralPurpose BulkDistribution MediumDistribution PrimaryFlex SpecialPurpose -

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

New Construction Commenced in 2016

619,718

9,600

498,634

111,484

-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

All Manufacturing GeneralPurpose BulkDistribution MediumDistribution PrimaryFlex SpecialPurpose

New Construction Delivered in 2016

NewConstructionCommencedin2016

NewConstructionDeliveredin2016



*Average lease rates are a weighted average between $.15 - $.80 and have been grossed down to a “NNN” equivalent. Also excludes renewals.

Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016New UC 2,265,441 85,267 140,000 276,599 562,551 886,299 138,398 277,476Delivered 59,249 440,010 918,845 676,176 846,183 100,011 519,707

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

New Under Construction/Delivered Overview - past 8 quarters

2nd Half 2012 1st Half 2013 2nd Half 2013 1st Half 2014 2nd Half 2014 1st Half 2015 2nd Half 2015 1st Half 2016Overall $0 .38 $0 .40 $0 .38 $0 .38 $0 .40 $0 .38 $0 .39 $0 .42Manufacturing $0 .38 $0 .36 $0 .26 $0 .38 $0 .43 $0 .28 $0 .46 $0 .39General Purpose $0 .49 $0 .38 $0 .37 $0 .44 $0 .38 $0 .44 $0 .43 $0 .41BulkDistribution $0 .36 $0 .38 $0 .38 $0 .32 $0 .37 $0 .38 $0 .37 $0 .34Medium Distribution $0 .34 $0 .39 $0 .37 $0 .39 $0 .44 $0 .38 $0 .40 $0 .45Flex $0 .40 $0 .45 $0 .44 $0 .46 $0 .45 $0 .43 $0 .48 $0 .54SpecialPurpose $0 .57 $0 .59 $0 .50 $0 .32 $0 .31 $0 .41 $0 .48

$0 .15$0 .20$0 .25$0 .30$0 .35$0 .40$0 .45$0 .50$0 .55$0 .60$0 .65

Average NNN Lease Rates

NewUnderConstruction/DeliveredOverview–Past8Quarters

Average NNN Lease Rates



2nd Half 2012 1st Half 2013 2nd Half 2013 1st Half 2014 2nd Half 2014 1st Half 2015 2nd Half 2015 1st Half 2016Overall 3,956,427 2,219,774 2,121,671 1,830,837 2,263,650 2,581,698 2,652,439 2,037,764Manufacturing 212,904 231,018 202,606 81,120 107,762 436,212 32,960 98,291General Purpose 188,087 182,723 125,204 235,354 219,255 123,465 169,713 214,766BulkDistribution 2,421,730 978,478 1,017,377 843,605 1,222,340 1,333,649 1,580,505 854,729Medium Distribution 470,565 322,009 251,702 229,709 248,582 376,619 320,216 295,550Flex 501,939 430,691 477,827 407,961 404,511 296,529 431,962 437,623SpecialPurpose 161,202 56,921 46,955 20,244 61,200 15,224 117,083 136,805

0 500,000

1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 3,500,000 4,000,000 4,500,000

Leased SF

2nd Half 2012 1st Half 2013 2nd Half 2013 1st Half 2014 2nd Half 2014 1st Half 2015 2nd Half 2015 1st Half 2016Overall 148 141 126 118 128 130 147 118Manufacturing 4 5 5 3 6 12 3 5General Purpose 17 19 15 15 12 12 15 17BulkDistribution 16 15 14 15 25 22 23 12Medium Distribution 17 17 16 12 16 19 16 15Flex 86 79 72 70 66 62 83 64SpecialPurpose 8 4 4 1 3 3 7 5

0

20

40

60

80

100

120

140

160

Number of Leases

Leased SF

Number of Leases

*All lease transaction data exclude renewal transcations.




*Average sales price PSF is a weighted average and excludes investment sales.

2nd Half 2012 1st Half 2013 2nd Half 2013 1st Half 2014 2nd Half 2014 1st Half 2015 2nd Half 2015 1st Half 2016Overall $121,483,412 $71,642,321 $46,838,112 $38,209,992 $39,672,433 $65,364,355 $58,282,620 $42,703,336Manufacturing $16,866,328 $8,419,892 $2,443,851 $1,481,004 $1,803,588 $7,244,880 $616,267 $1,798,605General Purpose $4,841,143 $3,227,771 $2,336,847 $5,557,871 $4,298,843 $2,210,407 $4,753,110 $5,612,327BulkDistribution $75,399,209 $40,012,569 $27,121,000 $16,073,189 $18,304,137 $39,208,559 $37,411,355 $11,184,355Medium Distribution $8,159,780 $7,153,712 $4,598,564 $6,202,354 $6,633,692 $12,220,347 $4,540,013 $7,282,660Flex $8,509,477 $11,208,778 $9,786,227 $8,608,561 $7,582,040 $4,190,350 $6,851,303 $12,685,279SpecialPurpose $7,707,475 $1,265,970 $551,623 $191,913 $1,050,133 $289,812 $4,110,572 $4,140,111

$-

$20,000,000

$40,000,000

$60,000,000

$80,000,000

$100,000,000

$120,000,000

$140,000,000

Lease $ Volume

2nd Half 2012 1st Half 2013 2nd Half 2013 1st Half 2014 2nd Half 2014 1st Half 2015 2nd Half 2015 1st Half 2016Overall $18,275,902 $34,318,083 $26,898,500 $22,444,500 $26,823,500 $41,552,003 $43,031,550 $47,008,000Manufacturing $1,495,001 $745,002 $7,500,000 $12,353,500 $2,815,000 $2,200,000 $11,060,610 $10,252,500General Purpose $4,939,400 $8,500,000 $9,431,000 $5,200,000 $4,781,000 $33,683,000 $12,823,125 $7,797,500BulkDistribution $7,960,000 $7,294,450 $10,956,000Medium Distribution $4,450,000 $3,500,000 $3,405,000 $8,950,000 $900,000 $7,371,500Flex $2,712,501 $3,528,375 $4,555,000 $405,000 $3,257,500 $3,939,003 $5,485,315 $6,409,000SpecialPurpose $1,169,000 $9,800,256 $1,442,500 $1,081,000 $7,020,000 $1,730,000 $8,760,000 $4,221,500

$- $5,000,000

$10,000,000 $15,000,000 $20,000,000 $25,000,000 $30,000,000 $35,000,000 $40,000,000 $45,000,000 $50,000,000

Owner User Sale $ Volume

Lease Dollar Volume

Owner-User Sale Dollar Volume




*Sale data exclude investment sales.


2nd Half 2012 1st Half 2013 2nd Half 2013 1st Half 2014 2nd Half 2014 1st Half 2015 2nd Half 2015 1st Half 2016Overall $69 .41 $61 .15 $70 .23 $57 .23 $76 .91 $67 .27 $71 .82 $72 .55Manufacturing $53 .91 $117 .95 $50 .74 $58 .94 $70 .29 $67 .97 $40 .45General Purpose $73 .41 $61 .64 $67 .21 $35 .57 $73 .42 $63 .27 $76 .96 $68 .24BulkDistribution $48 .35 $50 .00 $56 .57Medium Distribution $69 .86 $72 .25 $53 .18 $63 .42 $31 .93 $54 .74Flex $69 .90 $62 .65 $79 .97 $50 .00 $92 .90 $71 .82 $73 .74 $96 .67SpecialPurpose $74 .58 $59 .15 $47 .98 $89 .74 $66 .42 $83 .82 $74 .78 $67 .36

$0 .00

$20 .00

$40 .00

$60 .00

$80 .00

$100 .00

$120 .00

$140 .00

OwnerUserAverageSalePricePSF

2nd Half of 2012 1st Half of 2013 2nd Half of 2013 1st Half of 2014 2nd Half of 2014 1st Half 2015 2nd Half of 2015 1st Half of 2016Overall 359,200 651,792 517,043 465,161 548,920 716,233 682,774 901,287Manufacturing 57,887 4,000 157,434 252,804 58,220 31,300 165,954 304,998General Purpose 72,568 163,590 168,744 125,129 112,974 602,212 185,418 126,566BulkDistribution 164,631 145,889 193,658Medium Distribution 63,700 47,954 68,384 170,126 28,187 134,545PrimaryFlex 46,464 74,571 83,002 5,195 40,399 62,318 83,986 85,736SpecialPurpose 17,650 200,042 49,309 13,649 167,201 20,403 135,828 55,784

0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000

1,000,000

Owner User SF Sold

Owner-UserAverageSalePricePSF

Owner-User SF Sold



*Investment sale data include all investment sales in the state of Utah and exclude owner-user sales.

2nd Half of 2012 1st Half of 2013 2nd Half of 2013 1st Half of 2014 2nd Half of 2014 1st Half 2015 2nd Half of 2015 1st Half of 2016Overall 20 25 26 16 21 29 31 25Manufacturing 2 1 3 6 2 1 4 4General Purpose 7 10 12 3 6 19 9 5BulkDistribution 1 1 1Medium Distribution 1 2 2 3 1 2Flex 8 7 6 2 7 7 9 10SpecialPurpose 2 5 2 3 3 2 4 3

0

5

10

15

20

25

30

35

Number of Owner User Sales

2nd Half 2012 1st Half 2013 2nd Half 2013 1st Half 2014 2nd Half 2014 1st Half 2015 2nd Half 2015 1st Half 2016Overall 7 .71% 7 .92% 7 .00% 8 .03% 7 .16% 7 .57% 6 .74% 6 .81%Manufacturing 9 .41% 8 .97% 8 .00% 9 .30% 6 .68% 9 .09% 7 .68% 6 .97%General Purpose 7 .90% 7 .17% 6 .66% 7 .78% 7 .96% 6 .38% 8 .09% 7 .55%BulkDistribution 6 .50% 7 .85% 7 .25% 7 .20% 6 .49% 6 .14% 6 .60%Medium Distribution 8 .77% 7 .18% 7 .00%Flex 7 .88% 8 .20% 8 .48% 7 .52% 7 .31% 8 .01%SpecialPurpose 8 .18% 8 .00% 7 .62%

5 .00%5 .50%6 .00%6 .50%7 .00%7 .50%8 .00%8 .50%9 .00%9 .50%

10 .00%

Industrial Average Cap Rates

Number of Owner-User Sales

Industrial Average Cap Rates





2nd Half of 2012 1st Half of 2013 2nd Half of 2013 1st Half of 2014 2nd Half of 2014 1st Half 2015 2nd Half of 2015 1st Half of 2016Overall 11 14 8 16 9 25 22 20Manufacturing 3 3 1 3 3 4 3 5General Purpose 1 3 3 5 5 6 9 3BulkDistribution 1 4 1 4 4 4 5Medium Distribution 1 2 1 1Flex 5 4 1 4 8 3 5SpecialPurpose 1 1 1 1

0

5

10

15

20

25

30

Number of Industrial Investment Sales

2nd Half 2012 1st Half 2013 2nd Half 2013 1st Half 2014 2nd Half 2014 1st Half 2015 2nd Half 2015 1st Half 2016Overall $59,721,315 $168,762,500 $37,264,988 $116,099,481 $61,183,850 $132,289,292 $146,056,873 $126,441,116Manufacturing $15,925,000 $23,145,000 $760,000 $18,725,600 $39,500,000 $19,500,000 $22,499,308 $32,495,000General Purpose $4,940,000 $24,534,500 $18,905,988 $5,957,881 $14,143,850 $14,845,000 $36,579,925 $3,450,000BulkDistribution $25,135,315 $107,875,000 $12,824,000 $64,040,000 $42,924,688 $56,185,000 $78,249,706Medium Distribution $2,200,000 $20,804,604 $6,000,000 $4,368,585Flex $12,841,000 $13,208,000 $575,000 $27,376,000 $33,375,000 $14,925,000 $7,292,825SpecialPurpose $880,000 $2,000,000 $7,540,000 $585,000

$0 $20,000,000 $40,000,000 $60,000,000 $80,000,000

$100,000,000 $120,000,000 $140,000,000 $160,000,000 $180,000,000

Industrial Investment Dollar Volume

Number of Industrial Investment Sales

Industrial Investment Dollar Volume




Notable Industrial Owner-User SalesProperty Name Buyer Transaction SF City

HoneyvilleGrainInc. InterconInc. 193,658 Salt Lake City

4080 West Farm Road LoneRockProperties 147,600 West Jordan

4093 West Farm Road Penco 113,400 West Jordan

WorkflowOneBuilding Fisher Group 82,704 Salt Lake City

Western Paper Company CytozymeLaboratories,Inc. 78,545 Salt Lake City

Quality Distributing MontchapLegacyHoldings,LLC 35,948 West Jordan

Notable Investment DealsProperty Name Buyer Transaction SF City

ClearfieldDistributionCenter1 Nearon Enterprises, LLC 615,000 Clearfield

Overstock-SorensonTechnologyPark ExeterPropertyGroup 354,255 Salt Lake City

IDI II Nearon Enterprises, LLX 213,000 Salt Lake City

Crossroads Corporate Center #2 ExeterPropertyGroup 191,422 Salt Lake City

CorsicanaInvestment CORS LLC 155,106 Salt Lake City

Keebler - Crossroads Corporate Park ExeterPropertyGroup 150,288 Salt Lake City

Compax NIN-CB,L.C. 123,486 Salt Lake City

Tradestar-1630SouthGladiolaStreet LBARealty 103,584 Salt Lake City

Notable Lease DealsProperty Name Tenant Transaction SF City

ARABuildingB Enlinx,LLC 204,008 West Valley City

IntermountainSpaceCenter PerformanceColdStorage,LLC 93,730 Salt Lake City

I-80LogisticsCenterBuilding2 SouthShoreUSA,Inc. 87,745 Salt Lake City

MajesticAirportCenter#1 Walker Edison Furniture 75,093 Salt Lake City

CCIMechanicalBuildings ContinentialTiretheAmericas,LLC 44,694 Salt Lake City

CVPBuilding&Yard Anixter,Inc. 35,705 South Salt Lake

HarrisMechanical HarrisMechanical 24,318 Salt Lake City

MountainViewCommerceCenter2 HenriksenButlerInstallation,LLC 22,736 Salt Lake City


Midyear 2016 Stats by SF IncrementSF Lease Rate Lease SF Sold PSF Sold SF

0-4,999 SF $0 .47 46,975 $80 .22 13,521

5,000-9,999 SF $0 .48 43,160 $45 .97 15,506

10,000-49,999 SF $0 .36 105,283 $85 .59 11,100

50,000-99,999 SF - - - -

100,000 SF + - 133,770 - -

Property Name Buyer Tenant SF City

BusinessDepotOgden15A Undisclosed 133,770 Ogden

SportsGroupBuilding UTAHSOCCERARENA 43,872 Woods Cross

25PacificAvenue TopyAmerica,Inc. 13,700 North Salt Lake

Marshall Way Industrial Condos Shriber Properties LLC 11,100 Layton

2364 Wall Avenue DogandBone,LLC 9,506 Ogden

30 North Cutler Drive PalmerPalmerEngineeringandForensics,LLC 4,971 North Salt Lake

Notable Transactions

DAVIS AND WEBER COUNTIES MARKET OVERVIEW

* All lease rates are weighted average NNN rates of all completed leases and subleases. Rates do not include renewals. Sales price per square foot is calculated based upon completed transactions and excludes investment transactions.

Number of Transactions (Lease & Sale)20

10

2011

2012

2013

2014

2015

MY

201

6(A

nnua

lized

)

73

86

66

75

81

81

74

45

50

55

60

65

70

75

80

85

90

Average Actual Lease Rates (NNN)

$0.33

$0.32

$0.28

$0.39

$0.30

$0.32

$0.41

$0.20

$0.25

$0.30

$0.35

$0.40

$0.45

2010

2011

2012

2013

2014

2015

MY 2

016

Direct Vacancy Rate

2010

2011

2012

2013

2014

2015

MY 2

016

11.86%

10.16%

10.85%

6.27%

5.96%

4.63%

3.34%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%


5.08% 4.63%3.34%

1.82%1.76%

1.31%

0.04%1.07%

0.97%

0.00%

2.00%

4.00%

6.00%

8.00%

Q2 20150.04% 1.07% 0.97%

1.31%3.34%

1.76%4.63%

1.82%5.08%

Q4 2015 Q2 2016 Sublease Availabilty

Occupied Availability

Direct Vacancy

Direct Vacancy Occupied Availability Sublease Availabilty

Average Actual Sale Price

2010

2011

2012

2013

2014

2015

MY 2

016

$40.00

$50.00

$60.00

$70.00

$80.00

$67.90

$55.57

$59.60

$56.09

$74.03

$76.69

$71.20

Transaction data are constructed of actual verified sales/leases from 12/01/2015 – 5/31/2016


Vacancy 3 .34% -1 .75%# of Leases 63 26 .00%Lease Rates $0 .33 -17 .29%Leased SF 1,116,434 232 .15%# of Sales $15 .00 25 .00%Sales $PSF $74 .08 -7 .19%Sold SF 184,084 -21 .74%

INDUSTRIAL


Building Buyer/Tenant Type SF CityDGS Retail JBBBurleyProperties,LLC Property Sale 197,513 Payson

Neways North Campus BoardofEducationofNeboSchoolDistrict Property Sale 193,145 Salem

BushmanBuilding Xihui Chen Property Sale 42,000 ProvoSteelpointeBusinessPark-Building2 GrowgenixHoldings,LLC Lease 34,360 Vineyard533 South 500 West CMW Holdings of Linwood LLC Property Sale 22,457 Provo

RedBridgeCondos-Building1 Four Way Real Estate Investment Co Property Sale 10,570 Payson

Notable TransactionsQuick Stats

Last 12 Months Trend Change

Vacancy 3 .00% -47 .07%# of Leases 44 15 .79%Lease Rates $0 .49 21 .66%Leased SF 392,477 -32 .58%# of Sales 17 6 .25%Sales $PSF $74 .48 4 .22%Sold SF 556,571 128 .88%

30

20

40

50

60

70

80

90

100

Number of Transactions (Lease & Sale)

38

70

91

44

49

52

63

62

2009

2010

2011

2012

2013

2014

2015

MY

2016

(Ann

ualiz

ed) $0.25

$0.30

$0.35

$0.40

$0.45

$0.50

$0.55

$0.46

$0.36

$0.35 $0.38

$0.40

$0.38

$0.45

$0.50

2009

2010

2011

2012

2013

2014

2015

MY 2

016

Average Lease Rates (NNN)

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%9.98%

9.18% 8.35%

7.60%

4.73%

3.03%

3.45%

3.00%

2009

2010

2011

2012

2013

2014

2015

MY

2016

Direct Vacancy Rate

$20.00

$30.00

$40.00

$50.00

$60.00

$70.00

$80.00

$61.45

$61.15

$65.21

$42.57 $41.69

$62.65 $70.47

$73.01

2009

2010

2011

2012

2013

2014

2015

MY 2

016

Average Sale Price PSF

Utah County continues to perform exceptionally well in the industrial division through midyear 2016. Historically low vacancy rates, steadily increasing lease rates and booming new construction show the desire for large and small industrial users seeking out Utah County for relocation and expansion. Lease transaction square feet dropped to an average of 9,445 SF per deal; however, the number of transactions increased 15% year over year. Quality industrial space is hard to find in Utah County, pushing new developments to build to meet demand.

Owner-users in Utah County continue to have difficulty locating product to purchase in 2016. Even under those circumstances, owner-user transaction volume increased year over year nearly 50% and had an average price PSF of $74.48. Owner-user demand remains strong and owners looking to sell real estate assets should consider selling in the near future while demand persists.

Transaction data are constructed of actual verified sales/leases from 12/01/2015 – 5/31/2016

Narrative written by: Preston Davis, MBA

UTAH COUNTY MARKET OVERVIEWINDUSTRIAL


Industrial Strength

AGENTSINDUSTRIAL

Zach Anderson801 .578 [email protected]

Kelsie Akiyama801 .578 [email protected]

Jeff Heaton, CCIM, SIOR

801 .578 [email protected]

Robert Henry801 .578 [email protected]

Robert Kingsford801 .578 [email protected]

Bill Nicoloff801 .416 [email protected]

Eli Priest801 .746 [email protected]

Skyler Peterson801 .578 [email protected]

Kyle Roberts, CCIM, SIOR


Kneel Robinson, CCIM


Jim Sheldon801 .578 [email protected]

Luke Burbank801 .578 [email protected]

Rusty Bollow MRED, CCIM


Steve Condie, CCIM, SIOR


Preston Davis, MBA


Jason Hagblom 801 .578 [email protected]

Jaden Malan801 .578 [email protected]

© Newmark Grubb ACRES 2016. All Rights Reserved Newmark Grubb ACRES Midyear Report 2016 16

It appears as though everyone is looking for signs that the Salt Lake market has hit its peak. Despite this speculation, positive growth is evident throughout the market. Vacancy decreased, construction is rising, leasing activity is healthy, absorption is positive, and employment in Utah is still growing.

The vacancy rate for the Salt Lake market dropped an additional 31 basis points to 6.98% from yearend 2015. This current vacancy is the lowest seen in the office segment for the last decade. Class A vacancy is currently at 5.12%, with most new Class A developments being fully leased before delivery. This adds little relief to meet the high demand for quality product despite new product coming online on a consistent basis. In the south end of the valley, there is a slight rise in vacancy to 7.83%; however, almost one-third of the leasing activity year to date occuried in this region. The CBD/Periphery region has a 9.0% vacancy rate with Class C buildings contributing the most to that vacancy.

In Salt Lake County, 1.8 million SF of Class A construction is currently in the works. Again, this is an unprecedented number that has not been seen in over a decade—another indicator of Salt Lake’s office market strength. Just in the last six months, close to 600,000 SF of office space is underway for construction. The Salt Lake market has consistently had close to 1.3 million SF under construction each quarter since 2013, with vacancy continuing to drop in that same time period. A new 462,000 SF building at 111 South Main in downtown Salt Lake City will finish construction by the end of 2016 and is expected to be close or at 100% occupancy at completion.

A slight uptick in sublease space occurred during the last six months, with 69,000 SF of new sublease space added to the already available 462,040 sublease SF in the market. What is notable is the office market averaged 446,631 SF of sublease space over the last eight quarters. Although more sublease space is occurring at the moment, it is also being leased in a timely manner. However, new sublease space will continue to be monitored as a potential sign of a softening market.

Overall market activity remained strong with 1.2 million SF leased during the first half of 2016. The Salt Lake market is a consistent market showing very few potential signs of slowing down through the end of the year. Utah has positive growth in eight out of 10 employment sectors tracked by the Department of Workforce Services. Only Mineral/Mining and Other Services showed negative growth or zero growth year to date. Furthermore, Utah will continue to see positive job growth through the end of 2016, resulting in vast opportunities for the office market to continue to grow and expand into 2017.

OFFICE

Notable TransactionsProperty Name Buyer/Tenant SF CityBroadwayCentre HPBroadwayCentre,LLC 240,500 Salt Lake CityDaybreak Corporate Center Confidential 174,125 South Jordan102Tower University of Utah 128,769 Salt Lake CitySorenson Park 6 Lone Star Funds 106,764 TaylorsvilleArbor Plaza Urban Land of Nevada, LLC 65,802 SandySoJo Station Inmoment,Inc 62,706 South JordanCornerstone 1 SocialFinance,Inc 46,425 Salt Lake CityWorldTradeCenteratCityCreek Workman Nydegger 40,030 Salt Lake City111 South Main Street Dorsey & Whitney 31,956 Salt Lake City

Narrative written by: Dave Kelly

QUICK STATSLast 12 Months Trend % change

VacancyRate 6 .98% -11 .08%UnderConstruction 2,159,950 60 .81%# of Leases 404 6 .04%Leased SF 2,864,983 6 .68%ActualLeaseRates $23 .27 7 .70%# of Sales 26 30 .00%Sold SF 238,637 -3 .05%ActualSales$PSF $131 .64 15 .79%

SALT LAKE COUNTY MARKET OVERVIEW

Click to view video

OFFICE SALT LAKE COUNTY MARKET OVERVIEW


2008 2009 2010 2011 2012 2013 2014 2015 MY 2016Overall 13 .06% 14 .20% 13 .55% 14 .55% 12 .87% 12 .98% 10 .88% 7 .84% 6 .98%A 9 .66% 14 .60% 12 .90% 12 .65% 9 .72% 10 .36% 10 .04% 5 .09% 5 .43%B 14 .43% 13 .39% 13 .23% 15 .38% 14 .63% 13 .96% 10 .47% 8 .81% 7 .15%C 17 .11% 14 .81% 15 .30% 16 .79% 16 .02% 16 .45% 12 .98% 11 .17% 9 .36%

4 .00%

6 .00%

8 .00%

10 .00%

12 .00%

14 .00%

16 .00%

18 .00%

DirectVacancyRate

2nd Half of 2012 1st Half of 2013 2nd Half of 2013 1st Half of 2014 2nd Half of 2014 1st Half of 2015 2nd Half of 2015 1st Half of 2016Net Absorption 211,745 1,118,920 286,093 340,892 518,067 593,106 343,510 283,341DirectVacancy 12 .19% 10 .44% 10 .15% 10 .29% 9 .01% 7 .85% 7 .24% 6 .98%

0 .00%

2 .00%

4 .00%

6 .00%

8 .00%

10 .00%

12 .00%

14 .00%

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

NetAbsorption&DirectVacancy

DirectVacancyRate

NetAbsorption&DirectVacancy



2009 2010 2011 2012 2013 2014 2015 MY 2016All $18 .62 $18 .69 $18 .40 $19 .58 $20 .33 $21 .55 $22 .31 $23 .50Class A $20 .67 $22 .11 $21 .47 $23 .07 $23 .22 $24 .27 $25 .91 $27 .81ClassB $18 .88 $18 .18 $17 .88 $18 .40 $19 .44 $20 .27 $20 .89 $22 .19Class C $15 .16 $15 .09 $13 .53 $14 .30 $15 .06 $16 .00 $15 .85 $15 .51

$10 .00

$12 .00

$14 .00

$16 .00

$18 .00

$20 .00

$22 .00

$24 .00

$26 .00

$28 .00

$30 .00

AverageActualLeaseRates(FS)

1st Half 2012 2nd Half 2012 1st Half 2013 2nd Half 2013 1st Half 2014 2nd Half 2014 1st Half 2015 2nd Half 2015 1st Half 2016All 1,040,027 977,893 1,404,605 1,051,681 860,301 1,438,709 1,246,766 1,576,927 1,288,056A 399,032 400,391 454,712 428,838 389,493 830,847 657,640 655,911 485,620B 495,364 418,114 822,744 547,133 320,147 356,120 381,675 718,749 642,604C 145,631 159,388 127,149 75,710 150,661 251,742 207,451 202,267 159,832

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

Leased SF

AverageActualLeaseRates(FS)

Leased SF

*Average lease rates are a weighted average and have been grossed up to a “FS” equivalent

*Includes renewals.



1st Half 2012 2nd Half 2012 1st Half 2013 2nd Half 2013 1st Half 2014 2nd Half 2014 1st Half 2015 2nd Half 2015 1st Half 2016All 174 174 204 176 172 183 198 226 178A 48 43 58 47 55 61 73 73 56B 78 84 102 92 68 75 71 103 70C 48 47 44 37 49 47 54 50 52

0

50

100

150

200

250

Number of Leases

1st Half 2012 2nd Half 2012 1st Half 2013 2nd Half 2013 1st Half 2014 2nd Half 2014 1st Half 2015 2nd Half 2015 1st Half 2016Overall 330,477 99,892 53,832 145,856 64,334 168,905 77,252 74,927 163,710B 145,343 20,968 31,308 51,243 8,889 62,223 7,243 27,994 56,511C 185,134 78,924 22,524 94,613 55,445 106,682 70,009 46,933 107,199

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

Owner User Sold SF

Number of Leases

Owner-User Sold SF

*Includes renewals.

*Sales data exclude investment sales.



*Actual sales price PSF is a weighted average and excludes investment sales.

2009 2010 2011 2012 2013 2014 2015 MY 2016Overall $108 .96 $140 .80 $112 .76 $102 .14 $127 .13 $129 .40 $129 .82 $118 .17A 166 .39 $146 .71B $111 .71 $182 .57 $110 .23 $126 .69 $150 .98 $110 .23 $148 .85 $142 .66C $105 .52 $89 .92 $105 .75 $84 .60 $95 .32 $140 .90 $112 .37 $97 .17

$0 .04

$20 .04

$40 .04

$60 .04

$80 .04

$100 .04

$120 .04

$140 .04

$160 .04

$180 .04

$200 .04

OwnerUserAverageActualSalesPricePSF

2009 2010 2011 2012 2013 2014 2015 MY 2016Overall 8 .23% 8 .90% 8 .20% 8 .06% 7 .95% 7 .07% 7 .94% 7 .21%A 8 .17% 8 .38% 6 .72% 8 .10% 7 .77% 6 .87% 7 .44% 6 .98%B 8 .27% 9 .06% 8 .77% 7 .91% 8 .29% 8 .00% 8 .24% 8 .04%C 8 .83% 9 .71% 9 .02% 8 .42% 10 .71% 9 .14% 7 .63% 7 .95%

4 .00%

5 .00%

6 .00%

7 .00%

8 .00%

9 .00%

10 .00%

11 .00%

12 .00%

OfficeCapRates

Owner-UserAverageActualSalesPricePSF

OfficeCapRates

Half of all office investment transactions during 2015 involved Class B product. The lack of Class A office investments pushed investors towards Class B and C buildings more than in prior years which increased cap rates.



1st Half 2012 2nd Half 2012 1st Half 2013 2nd Half 2013 1st Half 2014 2nd Half 2014 1st Half 2015 2nd Half 2015 1st Half 2016Overall $124,912,500 $76,911,809 $174,772,500 $220,575,965 $222,316,597 $243,955,000 $133,525,200 $194,513,655 $145,763,600A $84,145,500 $71,296,809 $113,500,000 $152,788,364 $195,893,897 $189,885,000 $22,800,000 $65,069,655 $113,729,775B $39,617,000 $5,615,000 $61,272,500 $60,460,001 $23,809,200 $47,700,000 $78,552,000 $92,074,000 $22,495,000C $1,150,000 $7,327,600 $2,613,500 $6,370,000 $32,173,200 $37,370,000 $9,538,825

$-

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

OfficeInvestmentDollarVolume

1st Half 2012 2nd Half 2012 1st Half 2013 2nd Half 2013 1st Half 2014 2nd Half 2014 1st Half 2015 2nd Half 2015 1st Half 2016Overall 8 11 13 18 14 13 19 25 11A 2 8 2 6 5 4 3 7 4B 5 3 11 9 6 5 9 13 3C 1 3 3 4 7 5 4

0

5

10

15

20

25

30

NumberofOfficeInvestments

OfficeInvestmentDollarVolume

NumberofOfficeInvestments





UnderConstructionProperty Name Building Sf Class

111 South Main Street 462,350 A

53rd Center 200,000 A

SoJo Station 1 180,000 A

Vista Station - Solar City 155,000 A

VistaStation6-Academy 150,000 A

InContactBuilding 125,000 A

VistaStation4-Thumbtack 125,000 A

VistaStation7-Jet.com 125,000 A

SandyCommercePark 120,000 A

Vista Station 5 - EMC 100,000 A

ThePointeBuilding1 75,000 A

Executech 15,000 B

Total 1,832,350

14 .20% 13 .55%14 .55%

12 .87% 12 .98%10 .88%

7 .84% 6 .98%

1 .77%1 .57%

2 .59%

3 .34% 2 .93%

1 .99%

2 .60%

2 .08%

1 .63%1 .28%

1 .48%1 .66% 2 .15%

1 .24%

1 .18%

1 .27%

6 .00%

8 .00%

10 .00%

12 .00%

14 .00%

16 .00%

18 .00%

20 .00%

2009 2010 2011 2012 2013 2014 2015 MY 2016


DirectVacancy OccupiedAvailability Sublease Availability



SALT LAKE COUNTY SUBMARKETS

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Salt Lake CityInternational

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South ValleyRegionalAirport

Sa l t L a ke C i ty

Sa n d y

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Lake Park

West Salt Lake

InternationalCenter

Sugarhouse

Periphery

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East Sandy/Draper

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N

The above information while not guaranteed has been secured from sources deemed reliable l 8/17/2015 l \ \MAPHICS\Maphics\Mapping\Map Documents\Division\Office\Salt Lake County\off ice-submarkets_slco_thematic.mxd

www.ngacres.com376 East 400 South, Suite 120 l Salt Lake City, Utah 84111

Office 801.578.5555 l Fax 801.578.5500

Office SubmarketsSalt Lake County, Utah

OFFICEWe recently created competitive submarkets for the Office Division. The new submarkets show competitive buildings in a given geographical area. In doing so, we added buildings to our inventory that comprised of former governmental, medical use, and new construction. The new submarkets and continually growing inventory will allow us to better serve our clients with additional market intelligence and data.



Region Inventory Direct Vacant SF

Occupied Avail. SF Sublease SF Total Avail. SF Direct

VacancyAsking Lease Rate

Achieved Lease Rate Leased SF Net

Absorption Under Construction SF

CBD 9,751,344 889,346 242,266 163,728 1,214,816 9 .12% $24 .58 $25 .05 492,109 220,933 462,350

Class A 4,949,358 339,614 157,545 111,020 479,065 5 .80% $29 .48 $28 .45 183,865 -99,343 462,350

ClassB 2,713,735 289,659 19,521 28,811 357,151 11 .73% $21 .44 $23 .61 261,944 156,939 -

Class C 2,088,251 260,073 65,200 23,897 378,600 17 .93% $19 .78 $17 .47 46,300 163,337 -

Cottonwood 1,940,562 64,719 231,026 61,623 357,368 3 .10% $32 .16 $31 .97 107,277 33,595 -

Class A 1,839,584 64,719 231,026 61,623 357,368 3 .26% $32 .16 $31 .97 107,277 10,843 -

ClassB 78,644 -

-

-

- 0 .00% - - - 22,752 -

Class C 22,334 -

-

-

- 0 .00% - - -

- -

Central SLC 1,760,251 69,511 46,994 15,000 131,505 6 .20% $14 .11 $19 .09 29,804 74,427 -

Class A 146,115 -

-

-

- 0 .00%

- $15 .33 9,919 420 -

ClassB 612,092 32,300 41,772 15,000 89,072 4 .60% $14 .69 $22 .16 15,000 - -

Class C 1,002,044 37,211 5,222 - 42,433 8 .41% $13 .12 $14 .04 4,885 74,007 -

Central Valley 3,071,500 342,444 29,404 25,579 397,427 12 .93% $15 .77 $17 .48 120,286 13,853 200,000

Class A 617,263 29,620 22,114 19,480 71,214 6 .01% $14 .50 - - - 200,000

ClassB 1,620,228 171,340 3,297 6,099 180,736 12 .83% $17 .56 $17 .95 101,531 -6,634 -

Class C 834,009 141,484 3,993 - 145,477 17 .85% $14 .08 $14 .96 18,755 20,487 -

DraperTechCorridor 1,517,896 90,592

- 22,000 112,592 6 .85% $19 .85 $16 .69 7,892 1,422 730,000

Class A 1,104,939 57,984 - 22,000 79,984 6 .50% $19 .33 $16 .56 2,879 1,367 730,000

ClassB 317,983 32,608 -

- 32,608 8 .93% $20 .79 $21 .44 3,016 55 -

Class C 94,974 -

-

-

- 0 .00% $9 .69 1,997

- -

EastSandy/Draper 266,396 46,295

- - 46,295 13 .99% $17 .83 $13 .73 15,487 12,792 -

Class A 23,082 6,896 -

- 6,896 14 .91% $23 .00 - - 16,186 -

ClassB 218,018 14,103 -

- 14,103 6 .71% $18 .73 $15 .73 9,237 21,902 -

Class C 25,296 25,296 -

- 25,296 42 .62% $14 .00 $10 .79 6,250 -25,296 -

Midyear 2016 Stats by Submarket

*Onlyincludescompetitiveofficebuildingsover20,000SF.








Fort Union 1,869,299 96,002 55,489 27,349 178,840 3 .59% $22 .87 $22 .74 82,110 -47,969 -

Class A 897,798 56,913 46,740 - 103,653 2 .02% $25 .60 $25 .21 45,543 -42,162 -

ClassB 704,012 26,263 7,460 27,349 61,072 5 .25% $17 .44 $20 .22 33,239 -5,807 -

Class C 267,489 12,826 1,289 - 14,115 4 .79% $14 .34 $14 .04 3,328

- -

International Center 2,519,324 204,995 20,420 1,783 227,198 16 .72% $14 .34 $19 .77 38,063 -24,745 -

Class A - - - - - 0 .00% - - - - -

ClassB 1,244,070 89,596 - 1,783 91,379 19 .73% $17 .18 $19 .89 15,757

- -

Class C 1,275,254 115,399 20,420 - 135,819 13 .58% $12 .10 $19 .70 22,306 -24,745 -

Lake Park 1,980,167 23,113 -

- 23,113 1 .82% $14 .74 $9 .14 14,439 8,661 -

Class A 707,233 -

-

-

- 1 .01%

- - -

- -

ClassB 651,417 9,518 -

- 9,518 14 .90% $13 .00

- - - -

Class C 621,517 13,595 -

- 13,595 0 .63% $15 .95 $9 .14 14,439 8,661 -

Millcreek/Holladay 927,004 82,856 37,702 10,502 131,060 16 .07% $13 .97 $15 .09 33,620 10,213 -

Class A 40,749 -

-

-

- 0 .00% - - - 19,557 -

ClassB 304,009 23,110 -

- 23,110 17 .90% $16 .26 $17 .23 17,108 -13,444 -

Class C 582,246 59,746 37,702 10,502 107,950 16 .00% $13 .59 $12 .87 16,512 4,100 -

Periphery 1,977,201 165,738 6,525 7,363 179,626 9 .60% $18 .12 $19 .20 76,096 18,039 -

Class A - - - - - 0 .00% - -

-

- -

ClassB 1,305,237 79,284 6,525 7,363 93,172 7 .07% $19 .85 $19 .98 64,820 23,417 -

Class C 671,964 86,454 -

- 86,454 16 .64% $16 .45 $14 .72 11,276 -5,378 -

ResearchPark 924,191 28,626 7,021 - 35,647 2 .12% $21 .34 $15 .27 1,700 -2,473 -

Class A 85,430 -

-

-

- 2 .26% - - -

- -

ClassB 496,475 3,241 1,021 - 4,262 0 .00% $22 .00 - - -3,241 -

Class C 342,286 25,385 6,000 - 31,385 7 .19% $21 .23 $15 .27 1,700 768 -

*Onlyincludescompetitiveofficebuildingsover20,000SF.

Midyear 2016 Stats by Submarket Continued








Sugarhouse 1,689,617 150,443 3,168 - 153,611 11 .77% $17 .34 $21 .28 26,422 71,584

-

Class A 693,857 82,938 -

- 82,938 16 .15% $16 .27 $25 .03 13,610 24,936

-

ClassB 466,607 37,112 -

- 37,112 13 .97% $19 .40 $23 .33 2,728 24,252

-

Class C 529,153 30,393 3,168 - 33,561 6 .31% $17 .71 $15 .66 10,084 22,396

-

Southtowne 5,487,769 272,558 76,646 149,113 498,317 5 .44% $24 .82 $22 .18 240,751 -107,436 425,000

Class A 3,463,574 153,212 48,348 69,284 270,844 4 .53% $25 .13 $23 .08 122,527 -73,734 425,000

ClassB 1,774,804 119,346 28,298 71,251 218,895 7 .79% $24 .35 $21 .38 118,224 -33,702 -

Class C 249,391 -

- 8,578 8,578 0 .00%

- -

-

- -

Southwest 249,980 -

-

-

- 0 .00% $ - $

- -

- -

Class A 174,125 -

-

-

- 0 .00% $ - $

- -

- -

ClassB 75,855 -

-

-

- 0 .00% $ - $

- -

- -

Class C - -

-

-

- 0 .00% $ - $

- -

- -

West SLC 463,056 13,576 3,541 - 13,576 8 .37% $9 .06 $11 .00 2,000 -3,831 -

Class A 42,670 10,696 -

- 10,696 16 .69% $8 .00

- - -951

-

ClassB 420,386 2,880 3,541 - 2,880 5 .96% $13 .00

- - -2,880

-

Class C -

-

-

-

- 34 .68%

- $11 .00 2,000 -

-

Totals 36,423,942 2,540,814 756,661 484,040 3,761,715 6 .98% $21 .74 $22 .97 702,710 283,341 1,832,350

Class A 14,785,777 802,592 505,773 283,407 1,571,972 5 .12% $27 .02 $27 .30 285,963 -159,067 1,817,350

ClassB 13,003,572 930,360 107,894 157,656 1,195,910 9 .49% $19 .69 $21 .31 277,414 175,686 15,000

Class C 8,634,593 807,862 142,994 42,977 993,833 12 .96% $16 .31 $15 .70 139,333 266,722 -

Midyear 2016 Stats by Submarket Continued


The combined office markets of Davis and Weber Counties saw excellent rebound in growth and absorption in 2016. The prior eighteen months put the office market under scrutiny due to new product in excess of 300,000 SF delivered via Farmington’s Station Park and Centerville’s Legacy Office and Marketplace II that more than doubled the vacancy in a short period of time. Both developers and owners wondered how long it would take to rebound with tighter vacancy and higher lease rates, or if the new product would linger and restrict lesser properties from further growth.

With new construction being rapidly absorbed, tenants looking to establish themselves north of the Salt Lake metro area have struggled to find space resulting in a record low vacancy rate. This trend suggests that the market is ripe for new construction as opportunities for large contiguous space are very limited and even unavailable altogether. Many large groups looking to lease north of Salt Lake City may find 2016 to be a difficult task in finding quality space and need to help push for new product.

The market is prime for new office development, even speculatory product, as the last eighteen months have shown that the demand is there. However, if developers are slow to the construction phase, the market will likely see larger Class B buildings garner interest from groups unable to find other desirable space.

This year continues to be opportunistic for those looking to reposition their assets as demand continues to increase and quality available product diminishes.

Property Name Buyer/Tenant SF CitySandCastleAcademy Assigns 11,824 Woods CrossUniversityParkBoulevardOffice DigitalBusinessIntegration,Inc. 10,000 ClearfieldAmericanHeritage FranklinD.andVickyG.Dickson 8,750 LaytonFreewayParkOffice UtahBehaviorServices,Inc 7,641 RiverdaleMaverikCountyStoreCorporateOffice Your Employment Solutions 6,957 North Salt LakeBankofUtah WSRP 4,076 Ogden


Narrative written by: Chris Falk, CCIM, SIOR DAVIS AND WEBER COUNTIES


Vacancy 9 .37% -4 .70%# of Leases 72 -24 .21%ActualLeaseRates $19 .53 -5 .80%Leased SF 232,358 -3 .74%# of Sales 6 50 .00%ActualSales$PSF $97 .36 -13 .96%Sold SF 59,250 -7 .08%


2008 2009 2010 2011 2012 2013 2014 2015 MY2016

Overall $16 .68 $16 .65 $14 .71 $13 .87 $14 .66 $17 .35 $17 .25 $19 .89 $16 .15A $14 .05 $21 .02 $18 .60 $17 .39 $21 .92 $19 .42 $21 .09 $23 .27 $20 .71B $16 .87 $16 .30 $14 .46 $14 .09 $14 .60 $15 .86 $15 .55 $16 .43 $14 .42C $11 .35 $6 .43 $10 .84 $10 .11 $13 .07 $12 .72 $12 .62 $12 .88 $12 .94

$4 .00

$9 .00

$14 .00

$19 .00

$24 .00

$29 .00

ActualAverageLeaseRates(FS)Davis

2008 2009 2010 2011 2012 2013 2014 2015 MY2016

Overall $18 .69 $16 .74 $15 .42 $14 .46 $14 .60 $17 .75 $16 .99 $19 .53 $16 .20A $22 .28 $21 .68 $18 .85 $17 .39 $21 .29 $18 .28 $21 .09 $22 .77 $20 .71B $18 .22 $16 .09 $14 .77 $14 .74 $14 .46 $17 .45 $15 .38 $16 .21 $14 .80C $11 .35 $10 .04 $10 .84 $10 .11 $13 .07 $12 .72 $12 .62 $12 .77 $12 .94

$5 .00$7 .00$9 .00

$11 .00$13 .00$15 .00$17 .00$19 .00$21 .00$23 .00$25 .00

ActualAverageLeaseRates(FS)Davis and Weber Combined

16 .76%

16 .64%

15 .51%

14 .07%

12 .90%

12 .92%

11 .29%9 .37%

8 .00%9 .00%

10 .00%11 .00%12 .00%13 .00%14 .00%15 .00%16 .00%17 .00%18 .00%

Q32014

Q42014

Q12015

Q22015

Q32015

Q42015

Q12016

Q22016

VacancyRateDavis and Weber Combined

2008 2009 2010 2011 2012 2013 2014 2015 MY2016

Overall $20 .07 $17 .11 $17 .44 $16 .27 $14 .41 $18 .04 $14 .22 $17 .36 $16 .48A $22 .53 $23 .01 $19 .00 $19 .48 $17 .42 $19 .87B $19 .36 $14 .88 $16 .15 $16 .27 $14 .11 $18 .49 $14 .22 $14 .57 $16 .48C $17 .55 $12 .46

$5 .00$7 .00$9 .00

$11 .00$13 .00$15 .00$17 .00$19 .00$21 .00$23 .00$25 .00

ActualAverageLeaseRates(FS)Weber

2008 2009 2010 2011 2012 2013 2014 2015 MY2016

All $129 .13 $85 .46 $98 .47 $106 .37 $96 .61 $79 .54 $152 .98 $93 .73 $93 .10B $130 .26 $100 .61 $115 .92 $106 .18 $96 .61 $97 .02 $152 .98 $125 .05 $90 .56C $122 .38 $70 .31 $78 .52 $106 .86 $44 .57 $31 .08 $95 .65

$5 .00

$25 .00

$45 .00

$65 .00

$85 .00

$105 .00

$125 .00

$145 .00

$165 .00

ActualAverageSalesPricePSFDavis and Weber Combined

2010 2011 2012 2013 2014 2015 MY 2016Net Absorption 83,082 (30,386) 19,040 75,132 110,202 270,640 322,036DirectVacancy 14 .34% 17 .37% 17 .69% 15 .86% 16 .64% 12 .92% 9 .37%

0 .00%

2 .00%

4 .00%

6 .00%

8 .00%

10 .00%

12 .00%

14 .00%

16 .00%

18 .00%

20 .00%

(50,000)

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

Squa

re F

eet

NetAbsorptionandVacancyDavis and Weber Combined

DAVIS AND WEBER COUNTIES MARKET OVERVIEWOFFICE



Vacancy Rate

14.08%

12.21%

11.86%12.20%

16.99%16.32%

8.59%8.41%

8.00%

9.00%

10.00%

11.00%

12.00%

13.00%

14.00%

15.00%

16.00%

17.00%

18.00%

2009

2010

2011

2012

2013

2014

2015

MY 2

016 (200,000)

(100,000)

-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

Q3 2

014

Q4 2

014

Q1 2

015

Q2 2

015

Q3 2

015

Q4 2

015

Q1 2

016

Q2 2

016

Net Absorption

$8.00

$10.00

2009 2010 2011 2012 2013 2014 2015 MY 2016

$12.00

$14.00

$16.00

$18.00

$20.00

$22.00

$24.00Average Actual Lease Rates (FS)

Overall A B C2009 2010 2011 2012 2013 2014 2015 MY 2016

Overall A B C

Average Actual Sales Price PSF

$0.00

$25.00

$50.00

$75.00

$100.00

$125.00

$150.00

$175.00

$200.00

$225.00

Notable TransactionsProperty Name Buyer/Tenant SF CityThanksgivingPoint Young Living Essential Oils 59,170 LehiTroonOfficePark ExchangeStrategiesCorporation 22,754 OremHewsonBuilding TheWattStopper,Inc 20,000 Pleasant GroveZion'sBankFinancialCenter BlackboardInc. 14,378 ProvoIvie&YoungLawBuilding PS4HLTD 10,800 ProvoWellsFargoBuilding PulitzerNewspapers,Inc 7,145 ProvoPinehurstBusinessParkBuildingC JKHM Properties, LLC 6,144 Orem2972 West Maple Loop Sehguh Family, LLC 4,411 Lehi

UTAH COUNTY MARKET OVERVIEWOFFICE

QUICK STATSLast 12 Months Trend Change

Vacancy 8 .41% -20 .07%# of Leases 160 32 .23%ActualLeaseRates $18 .42 -5 .88%Leased SF 551,958 -20 .44%# of Sales 18 -35 .71%ActualSales$PSF $113 .58 5 .31%Sold SF 98,266 -77 .37%



Reed Bromley801 .234 [email protected]

Chris Falk, CCIM, SIOR801 .416 [email protected]

Craig Gardner801 .234 [email protected]

Aaron Jones801 .746 [email protected]

Dave Kelly801 .746 [email protected]

Casey Mills, CCIM801 .578 [email protected]

Collin Perkins, MBA801 .578 [email protected]

Derek Sawaya801 .746 [email protected]

Nick Teseros801 .746 [email protected]

Jack Woodward801 .578 [email protected]

Braxton Willie801 .416 [email protected]

Todd McLachlan801 .578 [email protected]

office specialists

AGENTSOFFICE


Salt Lake County continues to demonstrate a stable retail market this year as the vacancy rate drops more through midyear 2016. As a result, average lease rates remain steady, but remain historically higher than previous years. Data show that the outlier for the average lease rates being stabilized were for spaces in the 20,000 to 40,000 SF and above size as all other SF increments increased overall. This increase is primarily due to tenants demanding space in areas experiencing a high volume in new multi-family development and supply for this size range is very limited within those parameters.

Weber, Davis, and Utah Counties all mirror Salt Lake County with a decrease in vacancy rate. Additionally, cap rates lowered again in 2016, demonstrating Utah’s established and unwavering retail market. The overall average cap rate for 2016 compressed down to 6.74%. Freestanding retail product continues to have the lowest cap rate at 6.06%, closely followed by grocery-anchored community centers which have traded under 7.0% up to midyear 2016.

The success of grocery-anchored centers is notably visible by low cap rate trades, but also by what is in the pipeline for new planned development. Several new grocery stores have started construction throughout Utah in 2016, each with a site plan that includes new pads and shop spaces. These projects and others represent strong opportunities for the second half of 2016 for tenants, landlords, and investors alike.

RETAIL SALT LAKE COUNTY MARKET OVERVIEW

QUICK STATSLast 12 Months Trend

Vacancy 6 .50%# of Leases 103ActualLeaseRates $17 .12 Leased SF 473,510# of User Sales 22ActualSales$PSF $193 .03 Sold SF 221,215# of Investment Sales 26Cap Rate 6 .74%Dollar Volume $259,363,814



* Average lease rates are a weighted average and have been grossed down to a “NNN” equivalent.

8.28%

9.06%

9.19%

10.10%

9.26%

8.98%

7.66%

7.41%

6.50%6.00%

6.50%

7.00%

7.50%

8.00%

8.50%

9.00%

9.50%

10.00%

10.50%

2008 2009 2010 2011 2012 2013 2014 2015 MY 2016

Direct Vacancy

1st Half 2012 2nd Half 2012 1st Half 2013 2nd Half 2013 1st Half 2014 2nd Half 2014 1st Half 2015 2nd Half 2015 1st Half 2016Overall $13 .76 $16 .31 $14 .30 $13 .92 $13 .98 $15 .95 $13 .28 $18 .01 $16 .350 - 4,999 SF $18 .30 $18 .10 $17 .36 $18 .80 $19 .79 $21 .28 $17 .64 $20 .10 $20 .785,000 - 9,999 SF $15 .93 $11 .69 $11 .57 $8 .81 $14 .50 $15 .85 $14 .71 $8 .08 $15 .1910,000 - 19,999 SF $13 .51 $17 .47 $10 .65 $13 .51 $7 .41 $18 .00 $23 .54 $20 .5820,000 - 39,999 SF $9 .32 $10 .08 $5 .47 $9 .71 $9 .85 $6 .88 $12 .92 $14 .6740,000+ SF $12 .00 $12 .10 $8 .75

$5 .00$7 .00$9 .00

$11 .00$13 .00$15 .00$17 .00$19 .00$21 .00$23 .00$25 .00

AverageActualLeaseRatesPSF(NNN)

DirectVacancy




1st Half 2012 2nd Half 2012 1st Half 2013 2nd Half 2013 1st Half 2014 2nd Half 2014 1st Half 2015 2nd Half 2015 1st Half 2016All $30,872,343 $38,832,428 $18,913,598 $26,998,239 $41,201,056 $35,838,901 $32,559,049 $24,290,767 $51,705,9900 - 4,999 SF $12,909,910 $19,562,751 $12,813,165 $14,614,403 $11,941,945 $21,694,553 $4,596,432 $11,243,759 $11,782,5065,000 - 9,999 SF $3,581,055 $3,436,366 $3,939,715 $367,170 $4,246,036 $8,185,779 $4,000,954 $289,573 $4,781,03410,000 - 19,999 SF $3,282,332 $13,453,714 $569,943 $3,465,900 $4,968,631 $2,358,569 $2,182,680 $9,468,386 $7,132,87520,000 - 39,999 SF $11,099,046 $2,379,598 $1,590,775 $8,550,765 $17,604,892 $575,523 $3,289,048 $9,546,18740,000+ SF $2,439,553 $3,600,000 $21,203,460 $18,463,388

$-

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

LeaseTransactionDollarVolume

0 ‐ 4,999 SF23%

5,000 ‐ 9,999 SF9%

10,000 ‐ 19,999 SF14%

20,000 ‐ 39,999 SF18%

40,000+ SF36%

MY 2016 Lease OverviewbyTransactionVolume

LeaseTransactionDollarVolume

MY2016LeaseOverviewbyTransactionVolume



MY 2016 Lease Overview by Leased SF

MY2016LeaseOverviewbyNumberofTransactions

0 ‐ 4,999 SF80%

5,000 ‐ 9,999 SF11%

10,000 ‐ 19,999 SF2%

20,000 ‐ 39,999 SF5% 40,000+ SF

2%

MY 2016 Lease Overviewby#ofTransactions

0 ‐ 4,999 SF33%

5,000 ‐ 9,999 SF16%

10,000 ‐ 19,999 SF6%

20,000 ‐ 39,999 SF29%

40,000+ SF16%

MY 2016 Lease Overviewby Leased SF

© Newmark Grubb ACRES 2016. All Rights Reserved Newmark Grubb ACRES Midyear Report 2016

RETAIL STATEWIDE MARKET OVERVIEW

35

*Cap rates are a weighted average based on sales price. Investment sale data include all investment sales in the state of Utah and exclude owner-user sales.

1st Half 2012 2nd Half 2012 1st Half 2013 2nd Half 2013 1st Half 2014 2nd Half 2014 1st Half 2015 2nd Half 2015 1st Half 2016All $59,923,547 $274,442,162 $70,898,506 $72,249,001 $158,172,133 $545,636,238 $189,698,353 $117,261,058 $259,363,814EnclosedMall $3,600,000 $205,000,000 $75,000,000Regional Center $17,571,850 $138,000,000 $57,965,000 $184,000,000 $53,655,700Community Center $8,050,000 $100,126,081 $23,730,000 $8,002,464 $18,406,077 $129,225,000 $56,952,000 $37,452,000 $82,809,159Neighborhood Center $9,348,000 $6,000,000 $40,016,816 $15,491,250 $3,000,000 $35,539,000 $38,375,812 $7,884,200AnchorlessStripCenter $13,748,000 $4,548,000 $13,999,230 $4,160,000 $18,805,000 $11,165,000 $16,207,632 $8,421,365 $7,889,110Free Standing $10,604,697 $16,430,181 $15,945,000 $16,933,000 $31,830,006 $9,316,238 $23,144,021 $19,328,420 $17,857,600Other $1,904,000 $6,974,276 $405,000 $8,275,500 $1,165,000 $4,200,000 $3,970,000 $2,500,000

$-

$100,000,000

$200,000,000

$300,000,000

$400,000,000

$500,000,000

$600,000,000

Retail Investment Dollar Volume

1st Half 2012 2nd Half 2012 1st Half 2013 2nd Half 2013 1st Half 2014 2nd Half 2014 1st Half 2015 2nd Half 2015 1st Half 2016Overall 7 .94% 7 .73% 7 .84% 8 .44% 7 .20% 7 .07% 7 .34% 6 .96% 6 .74%Regional Center 7 .15% 7 .12%Community Center 8 .00% 8 .43% 8 .25% 8 .87% 8 .12% 6 .59% 7 .06% 6 .58% 6 .70%Neighborhood Center 8 .12% 7 .86% 8 .74% 8 .33% 9 .60% 7 .48% 7 .60% 7 .19%AnchorlessStripCenter 8 .70% 7 .98% 8 .24% 7 .93% 7 .64% 8 .61% 7 .92% 7 .25% 7 .87%Free Standing 7 .08% 7 .66% 6 .90% 8 .04% 6 .07% 6 .20% 6 .76% 6 .39% 6 .06%Other 5 .42% 7 .77% 7 .82% 6 .70% 8 .50% 6 .45% 5 .41%

5 .00%5 .50%6 .00%6 .50%7 .00%7 .50%8 .00%8 .50%9 .00%9 .50%

10 .00%

Retail Investment Cap Rates

Retail Investment Dollar Volume

Retail Investment Cap Rates


RETAIL


1st Half 2012 2nd Half 2012 1st Half 2013 2nd Half 2013 1st Half 2014 2nd Half 2014 1st Half 2015 2nd Half 2015 1st Half 2016All $120 .29 $169 .08 $177 .48 $137 .38 $175 .98 $121 .26 $151 .60 $188 .50 $195 .470 - 4,999 SF $132 .87 $203 .28 $220 .61 $131 .85 $227 .92 $242 .47 $197 .93 $236 .25 $237 .035,000 - 9,999 SF $103 .81 $169 .75 $180 .14 $150 .28 $74 .20 $132 .00 $176 .0010,000 - 19,999 SF $117 .00 $93 .82 $104 .20 $63 .68 $87 .21 $93 .40 $119 .4920,000 - 39,999 SF $75 .08 $78 .27 $52 .40 $84 .53 $44 .8740,000+ SF $58 .20 $34 .71 $41 .70 $58 .94

$-

$50 .00

$100 .00

$150 .00

$200 .00

$250 .00

$300 .00

Owner User Average PSF

1st Half 2012 2nd Half 2012 1st Half 2013 2nd Half 2013 1st Half 2014 2nd Half 2014 1st Half 2015 2nd Half 2015 1st Half 2016All $27,057,279 $40,030,350 $22,901,238 $6,204,500 $11,510,880 $14,328,999 $10,270,000 $7,991,500 $13,421,7920 - 4,999 SF $9,252,279 $11,267,600 $6,235,900 $2,804,500 $8,551,380 $2,070,000 $2,470,000 $3,366,500 $3,573,5005,000 - 9,999 SF $4,600,000 $9,252,750 $5,498,000 $2,830,000 $1,859,500 $1,449,999 $6,049,70010,000 - 19,999 SF $7,035,000 $4,020,000 $4,167,338 $1,100,000 $2,635,000 $1,175,000 $3,648,59220,000 - 39,999 SF $6,170,000 $1,700,000 $1,750,000 $570,000 $2,000,000 $1,250,000 $150,00040,000+ SF $1,904,000 $6,974,276 $405,000 $8,275,500 $1,165,000 $4,200,000 $3,970,000 $2,500,000

$-

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

$35,000,000

$40,000,000

$45,000,000

OwnerUserTransactionDollarVolume

Owner-User Average PSF

Owner-UserTransactionDollarVolume

MULTI COUNTY MARKET OVERVIEW

*Sales data exclude investment sales

* Sales price PSF is a weighted average and excludes investments.

Salt Lake County, Utah County, Davis County, and Weber County


Notable Salt Lake County Lease Deals

Property Name Tenant Transaction SF City

TheShoppesatLakePark BurlingtonCoatFactoryofUtah,LLC 50,001 West Valley City

Van Winkle Shopping Center ExtraSpaceStorage 42,197 Murray

Sportsman's Warehouse Sportsman's Warehouse 30,381 South Jordan

300WestTownCenter Cash & Carry Stores, LLC 21,657 Salt Lake City

BrickyardShoppingCenter Rite Aid 17,185 South Salt Lake

Riverwalk Shopping Center D1SportsTrainingofSaltLakeCity,LLC 15,000 Midvale

Notable Utah Investment Deals

Property Name Buyer Transaction SF City

TheGateway Vestar Development 623,972 Salt Lake City

ProvoTowneCenterInvestment Confidential 206,240 Provo

Riverside Plaza TKGRiversidePlaza,LLC 146,557 Provo

Country Hills Plaza TKGCountryHillsPlaza,LLC 140,097 Ogden

At Home WBCPartners,LC 100,164 Bountiful

Alpine Valley Shops RevescoProperties 86,152 AmericanFork

Vasa Fitness - 5345 South 4015 West Undisclosed 57,574 Taylorsville

OquirrhMountainMarketplacePhase2 InlandRealEstateAcquisition,Inc 14,350 South Jordan

Notable Owner-User Deals

Property Name Buyer Transaction SF City

Mattress Outlet LJRG LLC 19,550 Orem

MountainAmericaCreditUnion-2060East2100South MountainAmericaFederalCreditUnion 12,172 Salt Lake City

320 East 400 South - RS - Salt Lake Roasting Co . Salt Lake City 9,360 Salt Lake City

Sherwin Williams Paints - 3874 West 3500 South Seedling Properties 6,042 West Valley City

7-Eleven - 4051 South State Street DinaBen-Nissan 2,688 Millcreek

RETAIL MARKET OVERVIEW


Midyear 2016 Stats by SF IncrementSF Increment Lease Rate Leased SF0 - 4,999 SF $23 .66 46,1655,000 - 9,999 SF $28 .94 12,48210,000 - 19,999 SF - -20,000 - 39,999 SF - -40,000+ SF $10 .78 48,000

Notable TransactionsProperty Name Tenant SF City

FoxboroCommons Lee'sMarketplace 48,000 North Salt LakeRiverdale Redevelopment QK Holdings, LLC 6,677 RiverdaleStation Park Destination XL 5,805 FarmingtonClinton Pines MattressFirm,Inc 3,493 ClintonSmith's - Woods Cross Redevelopment StarbucksCorp 2,275 Woods CrossThePoint West Point Eye Care 2,000 West PointStation Park BlazeFastFire'dPizza 2,500 FarmingtonTheCommonsatOgden AT&T 2,500 Ogden

*Average lease rates are a weighted average and have been grossed down to a “NNN” equivalent. Sales data exclude investment sales. Sales price PSF is a weighted average.

9 .67%

8 .94%

9 .08%

9 .42%

10 .22%9 .83%

8 .60%7 .00%

6 .00%6 .50%7 .00%7 .50%8 .00%8 .50%9 .00%9 .50%

10 .00%10 .50%

2009

2010

2011

2012

2013

2014

2015

MY 20

16

DirectVacancy

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00Average Actual Lease Rates PSF (NNN)

RETAIL DAVIS AND WEBER COUNTIES MARKET OVERVIEW

0 - 4,999 SF43%

5,000 - 9,999 SF12%

40,000+ SF45%

MY 2016 Lease Overview by SF Leased


Vacancy 7 .00%# of Leases 48ActualLeaseRates $16 .30 Leased SF 225,533

2008 2009 2010 2011 2012 2013 2014 2015 MY 2016All $15 .57 $18 .43 $15 .25 $13 .22 $16 .52 $13 .58 $18 .03 $14 .38 $18 .48 0 - 4,999 SF $20 .28 $18 .75 $16 .94 $18 .55 $20 .84 $16 .77 $19 .23 $19 .93 $23 .66 5,000 - 9,999 SF $19 .15 $13 .09 $15 .08 $11 .33 $13 .88 $15 .98 $10 .50 $8 .62 $28 .94 10,000 - 19,999 SF $16 .02 $6 .10 $14 .02 $15 .75 $10 .82 $26 .39 20,000 - 39,999 SF $9 .71 $10 .93 $6 .90 $7 .73 $8 .42 40,000+ SF $11 .83 $8 .53 $13 .00 $10 .27 $10 .78

DirectVacancy


MY 2016 Lease Overview by SF Leased


Midyear 2016 Stats by SF IncrementSF Increments Lease Rate Leased SF0 - 4,999 SF $22 .02 54,203

5,000 - 9,999 SF $20 .69 20,075

10,000 - 19,999 SF - -

20,000 - 39,999 SF - -40,000+ SF - -

Recent TransactionsProperty Name Tenant Transaction SF CityTheFamilyCenteratOrem GuitarCenterStoresInc 8,843 OremFestival Shopping Center Sola Salon Studios 6,032 OremTheTerraceatTraverseMountain Tsunami-BlueFinnCorporation 5,200 LehiLehi Crossing New Cingular Wireless PCS, LLC 4,001 LehiUniversity Crossing Massage Green Spa 2,907 OremTheTerraceatTraverseMountain Chi-Ku Lehi, LLC 2,771 LehiLehi Crossing MAD Greens 2,400 LehiLehi Crossing Zao Stores, LLC 2,000 Lehi

* Average lease rates are a weighted average and have been grossed down to a “NNN” equivalent. Sales data exclude investment sales. Sales price PSF is a weighted average.

UTAH COUNTY MARKET OVERVIEWRETAILDirect Vacancy

2008

2009

2010

2011

2012

2013

2014

2015

MY 2

016

9.17%

10.61%

9.63%

9.23% 8.20%

7.40%7.30%

7.19% 7.00%

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

10.00%

11.00%

10,000 - 19,999 SF0%

5,000 - 9,999 SF27% 0 - 4,999 SF

73%

20,000 - 39,999 SF0%

40,000+ SF0%

MY 2016 Lease Overviewby SF Leased


Vacancy 7 .00%# of Leases 43ActualLeaseRates $12 .29 Leased SF 103,866

2008 2009 2010 2011 2012 2013 2014 2015 MY 2016Overall $14.40 $16.34 $13.32 $11.85 $13.25 $17.18 $21.02 $12.29 $21.660 - 4,999 SF $19.02 $17.56 $15.86 $14.72 $18.60 $18.36 $25.80 $20.61 $22.025,000 - 9,999 SF $14.76 $13.53 $11.79 $13.18 $12.16 $32.82 $22.82 $13.62 $20.6910,000 - 19,999 SF 05.01$13.11$46.8$84.81$39.9$61.61$20,000 - 39,999 SF $5.69 $9.50 $13.65 $14.25 $12.8540,000+ SF 81.6$73.5$05.7$05.8$39.5$

$5.00

$10.00

$15.00

$20.00

$25.00

$30.00

$35.00

Average Actual Lease Rates PSF (NNN)


Garrett Blomquist801 .727 [email protected]

Ben Brown801 .456 [email protected]

Joe Cooley801 .456 [email protected]

Tracy Doong, CCIM801 .746 [email protected]

Troy Hardy801 .456 [email protected]

Michell Doong801 .746 [email protected]

Brandon Goodman801 .746 [email protected]

Chris Hatch801 .456 [email protected]

Jeff Harrison801 .456 [email protected]

Adam Hawkes801 .416 [email protected]

Mike Medina801 .416 [email protected]

Joe Mills801 .578 [email protected]

Scott Brady801 .456 [email protected]

uniquely adapted

AGENTSRETAIL

Andy Moffitt801 .456 [email protected]

Chris Monson, CCIM801 .578 [email protected]


Taylor Moore801 .580 [email protected]

Brett Palmer801 .578 [email protected]

Don Schroder435 .755 [email protected]

Shaydon Wood801 .456 [email protected]

Lance Pendleton801 .456 [email protected]

Continued:

Chad Moore801 .456 [email protected]

AGENTSRETAIL


The Utah commercial real estate investment market remains strong going into the halfway mark for 2016. Utah has solid market fundamentals, such as being #1 in population growth and top 5 in job growth in the nation, making Utah a desirable location for capital preservation and long term investors. In general, commercial real estate is a safe harbor fueled by investors seeking yield apart from low return bank accounts as well as a means of retreating from volatile national and global stock markets. Recent instability in the global markets has accentuated the trend towards quality product that started during the downturn in 2009. The quality product that investors are searching for is found in Utah.

Getting into the numbers:

Cap Rates are down overall in industrial, multi-family, office, and retail: a telltale sign of market strength. Price sensitivity is clear in Class A product due to a perception of limited upside opportunity in rental growth. Some


Industrial Cap Rates 6 .82% -7 .84%Industrial # of Deals 42 13 .51%Industrial $ Volume $267,756,659 35 .63%OfficeCapRates 7 .30% -0 .21%Office#ofDeals 41 17 .14%Office$Volume $347,622,755 -9 .93%Retail Cap Rates 6 .83% -0 .42%Retail # of Deals 62 8 .77%Retail $ Volume $370,705,672 -49 .59%Multi-family Cap Rates 5 .61% -0 .09%Multi-family # of Deals 37 -21 .28%Multi-family $ Volume $572,258,977 33 .01%

Property Name City Buyer Tenant Transaction Sf/Units Deal TypeTheGateway Salt Lake City Vestar Development 623,972 Investment SaleBroadwayCentre Salt Lake City HPBroadwayCentre,LLC 240,500 Investment SaleProvoTowneCenter Provo Undisclosed 206,240 Investment SaleDaybreak Corporate Center South Jordan Undisclosed 174,125 Investment SaleRiverside Plaza Provo TKGRiversidePlaza,LLC 146,557 Investment SaleCountry Hills Plaza Ogden TKGCountryHillsPlaza,LLC 140,097 Investment SaleAlpine Valley Shops AmericanFork RevescoProperties 86,152 Investment SaleFarm Gate Apartments Herriman ColRich 496 Units Multi-familyBridgesatCitifront Salt Lake City Landbank 295 Units Multi-familyGoldstonePlaceApartments Clearfield ACV-VII-Goldstone, LLC 228 Units Multi-family


INVESTMENTMARKET OVERVIEW STATEWIDENarrative written by: Mark Jensen

Click to view video

INVESTMENT


STATEWIDE MARKET OVERVIEW

very low Class A quality deals have pushed cap rates down in all asset classes. As 2016 continues, continued strength in Class A will move forward, and compressed cap rates will occur in B and C assets as investors look for value add opportunities outside of Class A product. As investors pick up lower class product and make improvements, those assets are having tremendous success in moving prices up to just slightly less than Class A. With Class A rents reaching noticeable highs, the yield produced from these updated assets create an even higher investment in the long run.

Volume is usually the first indicator looked at to determine where the market is going, and volume through Q2 of 2016 is down 14.40% from Q2 of 2015. However, it is important to note this slide in volume is not representative of a slide in demand. A limited supply in proportion to the large demand exists in the Utah market. As noted before, price sensitivity is occurring due to investors viewing that rental rates may be tapering. Volume slowdown is anticipated, but demand will remain high through the end of 2016.

Pricing is moving upward. On a per square foot (PSF) basis, pricing is up 18.40% since the downturn of 2008; leading the way is multi-family product, up over 25.00%. These figures are slightly skewed as newer product is coming online and selling for higher prices. Overall, it is interesting to note that office product is trading at or close to 2007 prices while industrial remains almost unchanged—going from $72.07 PSF in 2007 to $63.57 PSF in 2016.

Utah is meeting the needs and desires of all that invest here. A robust job growth, population growth, and relative low cost of living have made the Utah CRE market desirable for investors seeking capital preservation and low volatility yield. The state has had an incredible 3.72% job growth along the Wasatch Front from 2014 to 2015, and population growth of 515,876 in the last 10 years with projections to increase another 1.1 million from 2010 to 2015. Over half (56.50%) of the state’s entire population growth is expected to occur in Utah and Salt Lake Counties. Again, the fundamentals of the Utah market will continue to drive population and job growth, keeping our market strong in the long term.

INVESTMENT



Half of all office investment transactions during 2015 involved Class B product. The lack of Class A office investments pushed investors towards Class B and C buildings more than in prior years which increased cap rates.

2007 2008 2009 2010 2011 2012 2013 2014 2015 MY 2016All 6 .96% 7 .85% 8 .09% 7 .98% 7 .42% 7 .59% 7 .01% 6 .88% 6 .88% 6 .49%Industrial 7 .58% 7 .81% 8 .41% 8 .22% 7 .64% 7 .79% 7 .69% 7 .61% 7 .15% 6 .88%Multi-Family 6 .10% 6 .48% 7 .62% 6 .75% 6 .29% 6 .51% 6 .06% 5 .75% 5 .81% 5 .40%Office 7 .31% 8 .05% 8 .08% 8 .90% 8 .20% 8 .06% 7 .95% 7 .07% 7 .94% 7 .18%Other 9 .11% 9 .37% 10 .88% 8 .02% 7 .63% 9 .17% 8 .50% 8 .55%Retail 7 .38% 8 .36% 8 .52% 8 .59% 8 .00% 7 .76% 8 .12% 7 .17% 7 .14% 6 .74%

5 .00%

6 .00%

7 .00%

8 .00%

9 .00%

10 .00%

11 .00%

12 .00%Average Cap Rates (weighted average)

1st Half 2011 2nd Half 2011 1st Half 2012 2nd Half 2012 1st Half 2013 2nd Half 2013 1st Half 2014 2nd Half 2014 1st Half 2015 2nd Half 2015 1st Half 2016Overall 2,939,768 4,634,594 4,780,475 5,572,858 9,595,885 5,235,251 7,480,209 6,939,539 7,881,228 6,973,345 5,983,732Industrial 1,109,239 1,837,367 1,265,489 1,308,147 4,744,565 463,312 4,063,101 1,107,543 2,634,029 2,151,265 2,224,025Multi-Family 782,884 1,305,174 1,595,809 1,184,529 3,119,209 2,391,601 1,423,335 1,063,785 2,034,589 2,786,889 1,333,020Office 474,538 755,167 742,815 866,938 892,057 1,467,971 788,418 1,107,695 1,051,398 1,248,634 780,746Retail 492,327 554,883 580,210 2,098,367 514,736 838,048 965,203 3,594,255 1,174,449 684,307 1,509,313Other 80,780 182,003 596,152 114,877 325,318 74,319 240,152 66,261 986,763 102,250 136,628

-

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Sold SF

Average Cap Rates (Weighted Average)

Sold SF


INVESTMENT



* Average price PSF is a weighted average.

2007 2008 2009 2010 2011 2012 2013 2014 2015 MY 2016All $142 .41 $166 .21 $138 .23 $141 .98 $144 .92 $115 .21 $146 .39 $181 .61 $181 .86 $174 .53Industrial $72 .07 $71 .72 $42 .06 $51 .74 $54 .73 $53 .57 $68 .69 $60 .28 $72 .20 $64 .57Multi-Family $84 .99 $103 .70 $92 .29 $81 .21 $92 .52 $85 .79 $110 .63 $114 .78 $126 .03 $113 .36Office $148 .42 $136 .23 $132 .00 $111 .95 $112 .22 $125 .00 $150 .76 $149 .91 $152 .02 $149 .99Retail $235 .50 $242 .48 $232 .02 $242 .19 $270 .39 $187 .96 $235 .30 $299 .93 $293 .94 $278 .46

$-

$50 .00

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$150 .00

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Average Sales Price PSF

2nd Half 2011 1st Half 2012 2nd Half 2012 1st Half 2013 2nd Half 2013 1st Half 2014 2nd Half 2014 1st Half 2015 2nd Half 2015 1st Half 2016Overall $402,940,714 $430,037,517 $555,419,634 $819,356,138 $640,037,454 $727,134,291 $1,016,387,0 $848,131,145 $859,920,003 $728,199,060Industrial $94,767,120 $74,307,187 $64,386,315 $165,025,500 $37,264,988 $117,185,481 $69,270,850 $128,149,292 $145,699,368 $122,057,291Multi-Family $140,012,000 $140,124,499 $134,416,348 $368,296,632 $305,417,500 $185,182,400 $150,740,000 $279,503,300 $387,220,922 $185,038,055Office $73,161,400 $124,912,500 $76,911,809 $174,772,500 $220,955,965 $222,316,597 $243,955,000 $142,000,200 $197,033,655 $150,589,100Retail $90,440,192 $59,923,547 $274,442,162 $70,898,506 $72,249,001 $158,172,133 $545,636,238 $189,698,353 $117,261,058 $253,444,614Other $4,560,002 $30,769,784 $5,263,000 $40,363,000 $4,150,000 $44,277,680 $6,785,000 $108,780,000 $12,705,000 $17,070,000

$0

$200,000,000

$400,000,000

$600,000,000

$800,000,000

$1,000,000,000

$1,200,000,000

TotalDollarVolume

AverageSalesPricePSF

TotalDollarVolume


INVESTMENT



2nd Half 2011 1st Half 2012 2nd Half 2012 1st Half 2013 2nd Half 2013 1st Half 2014 2nd Half 2014 1st Half 2015 2nd Half 2015 1st Half 2016Overall 70 88 76 81 66 98 76 111 108 84Industrial 18 14 13 12 8 17 14 23 23 19Multi-Family 18 34 28 32 20 23 20 27 22 15Office 12 8 11 13 19 14 13 22 28 13Retail 18 26 21 21 18 39 26 31 31 31Other 4 6 3 3 1 5 3 8 4 6

0

20

40

60

80

100

120

Number of Investments

23%

18%

15%

37%

7%

MY 2016 Number of Investments by Division

IndustrialMulti-FamilyOfficeRetailOther

Number of Investments

MY 2016 Number of Investments by Division



The 2016 commercial land market for Salt Lake County is currently on pace to slightly exceed 2015 in many different aspects. Great promise is expected for number of deals, acres sold, and total transaction dollar volume.

2015 was a record year in regards to land permits total value, over $2.5 billion--more than double the value for any year in the past decade. The tremendous land value for multifamily developments throughout the county, especially for downtown, drove permit value up; high prices combined with high demand made 2015 a hard year to beat. At midyear 2016, permit value appears modest at $806.8 million but still exceeds the full permit value total for 2010 and 2014. If 2016 moves forward at its current rate, permit value will still be at the second highest in the past 10 years.


#ofTransactions 51 -27 .14%

AcresSold 335 -17 .46%

Transaction$Volume $74,928,303 -38 .82%

Property Name City Acres Land Use616 South State Street Salt Lake City 2 .29 Multi-Family6099WestNewBinghamHighway West Jordan 28 .22 IndustrialBluffdaleIndependenceLand Bluffdale 14 .04 IndustrialBangerterCrossingPhaseI Salt Lake City 14 .11 IndustrialCenter Square Midvale 3 .82 Multi-FamilyHamlet Homes Land Riverton 6 .19 Multi-Family4109 West Central Avenue Salt Lake City 16 .33 Industrial4390 South Main Street Murray 2 .46 OfficeBangerterCrossingPhaseIII Salt Lake City 7 .39 IndustrialWarnerTruckLand West Valley City 7 .11 Industrial

NotableTransactions

LAND SALT LAKE COUNTY MARKET OVERVIEW



Salt Lake County commercial development has a predictable construction cycle. Land is purchased to build new product for all market segments, thereby creating a strong land market. More and more high profile tenants and developers are seeing the value of coming to the Salt Lake market for what it has to offer: a solid job pool of educated employees, low unemployment, and lower lease rates overall compared to other markets in the West. Many developers are now buying and holding land to be ready for the next tenant--with some even building speculative projects where even though a tenant is not committed, by the time the product is delivered, it is almost completely filled.

A surprising large amount of the notable transactions done year to date are for industrial development. Out of the 246.9 acres sold so far during 2016, 71.6% of those acres are for industrial use and already exceed the 128 industrial use acres sold for the entire 2015 year. In contrast, only 18.6 acres are allocated for multi-family development compared to the 45.26 acres in 2015. Industrial development in general demands more acreage, but is low in value. With total land transaction volume of $43.7 million at midyear 2016, although the industrial use acres sold consists over 70%, the transaction volume is hovering right around 50% at $22.8 million. Conversely, high density multifamily development creates high value with limited acreage.

Year over year from midyear 2015 to midyear 2016, the number of land transactions, total acres sold, and transaction dollar volume have all gone down, immediately causing some to view the market as slowing down. However, when taking into account past trends and annualizing the data to forecast what yearend 2016 will bring, all three stats are predicted to exceed 2015’s very strong land market.

177 .9, 72%

18 .62, 7%

2 .99, 1%

41 .85, 17%1 .36, 1%

4 .162, 2%

MY 2016 Volume byAcresSold

IndustrialMulti-FamilyOfficeOtherRetailRetail Pad

MY2016VolumebyAcresSold



551 .05

303 .51

417 .08

213 .68 261 .61

563 .03

290 .25

493 .76

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100 .00

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600 .00

2009 2010 2011 2012 2013 2014 2015 MY 2016 Annualized

AcresSold

2009 2010 2011 2012 2013 2014 2015 MY 2016Annualized

Total $105,351,338 $104,556,139 $93,692,857 $53,757,484 $87,245,055 $156,840,194 $83,200,602 $87,476,278

$-

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TotalDollarVolumeSoldbyYear

AcresSold

TotalDollarVolumeSold



45

71

5653

56

76

56

62

30

40

50

60

70

80

90

2009 2010 2011 2012 2013 2014 2015 MY 2016 Annualized

Number of DealsNumber of Deals

4%

29%

64%

3%

2016ConstructionPermitsbyValue

Davis County

Salt Lake CountyUtah CountyWeber County

2016ConstructionPermitsbyValue


Investment & Land AGENTS

Mark Jensen801 .578 [email protected]

Jill Synder801 .578 [email protected]

John Taylor, CCIM, MAI801 .578 [email protected]

Greg Ratliff801 .578 [email protected]

Rick Davidson801 .578 [email protected]

Bob Favero801 .416 [email protected]

John Travis801 .578 [email protected]

Chris Terry801 .578 [email protected]

investment & land experts

Bryce Blanchard, MBA801 .578 [email protected]


Newmark Grubb Knight Frank (NGKF) Global Corporate Services is an integrated global platform which provides seamless, beginning to end corporate services solutions to clients on an international level. NGKF Global Corporate Services functions as part of a company’s corporate real estate team to ensure that real estate is contributing to the achievement of the company’s vision.

ServicesNGKF Global Corporate Services offers a wide variety of global real estate solutions and services, including:

Leasing/Sub-Leasing Advisory ConsultationDisposition Services Investment ServicesDue Diligence Services Lease RestructuringLease Administration Right of Way and License AgreementsLease Auditing Project ManagementEntitlement and Zoning Services Analytical DemographicsValuation Services Space OptimizationEasement and Boundary Line Negotiations Tax IncentivesFacilities Management Location OptimizationProperty Use AnalysisTenant Representation/Site Selection

BenefitsWe are solutions-oriented. Outsourcing through NGKF Global Corporate Services provides the following benefits to clients:• Streamlined and more efficient real estate process - one point of contact to initiate and manage multiple transactions in any location worldwide• Reduction in overhead expenses - no need to hire new real estate personnel when needs are outsourced• Consistent and adaptable process across multiple markets• One source for transaction management, due diligence, lease administration, entitlement/zoning, and more• Upskill your real estate department - allow NGKF Global Corporate Services to handle transaction management and other day to day operations

so your real estate team can focus on strategic planning and portfolio management

NGKF Global Corporate Services Partial Client List

Contact Matt Stephens for more [email protected] l 801.746.4752

Locations of Completed Transactions

=

GLOBAL CORPORATE SERVICES OVERVIEW


Newmark Grubb ACRES Asset Services is one of the region’s most trusted names in real estate management services and the largest third-party property management company in Utah. The firm currently has a property and facility management portfolio of nearly 11,000,000 square feet. This portfolio is professionally and expertly managed by our dedicated team of experienced real estate professionals.

Newmark Grubb ACRES Asset Services provides full-service property management capabilities and has built a reputation for delivering superior operations and services for all classes of commercial and investment properties throughout Utah. From building operations and maintenance to property accounting and contract management, our proven property management platform and processes have increased property values for assets ranging from prestigious Class A office complexes to industrial, manufacturing and warehousing facilities, retail shopping centers and medical facilities. However, at the end of the day, our platform and services are only as good as the professionals who deliver those services each and every day. At Newmark Grubb ACRES, our dedicated professionals take pride in the assets they oversee and truly go above and beyond to ensure that the assets entrusted to our care are managed and maintained to the utmost level in order to drive value creation.

As the #1 Property Management and Asset Services firm in Utah, we offer a variety of services such as vendor/contractor management, insurance management, property inspections and reports, monthly financial statements, variance reports, invoicing, tenant service management, corrective maintenance and repairs, tenant complaint resolution, construction and project management. We do more than provide a service; we proactively seek to reduce expenses, increase revenues and improve the efficiency of your investments.

#1 Third Party Property Management Company in Utah, 10.8Million Square Feet Managed, 41 Asset Services Professionals

PropertyManagementServicesLease Administration and Tenant RelationsEnergy Efficiency/Sustainability ServicesVendor Contract Negotiations and OversightProperty Inspection ProgramAccounting Services (including customized financial reporting)

Tax Appeal Services

Lease Renewal

Annual BudgetingFacility Maintenance/Engineer ServicesPreventative MaintenanceConstruction ManagementTenant Build-Out

Contact Gary Coker for more information [email protected] l 801.746.4752

ASSET SERVICES OVERVIEW