INDUSTRIAL MARKET REPORTSAVANNAH | 3RD QUARTER 2018

2018 3rd Quarter Snapshot | Savannah

Key Takeaways> The overall vacancy rate

stands at 0.69%

> 3Q net absorption was 1,221,860 SF, bringing YTD to 4,045,887 SF

> 9,282,550 SF is under construction of which 4,380,336 SF is build to suit and 4,902,214 SF is spec

CONTACT: DAVID SINK, SIOR | 912 662 8010 | david.sink@colliers.com HILARY SHIPLEY | 912 662 8013 | hilary.shipley@colliers.com

www.colliers.com/savannah

Year 2018 2017Quarter 3rd Quarter 2nd Quarter 1st Quarter 4th Quarter 3rd Quarter

Total Inventory 58,245,679 56,948,719 56,878,719 55,459,719 53,366,119

Under Construction 9,282,550 9,757,510 8,092,495 5,078,792 3,920,475

Vacant 403,653 328,553 288,876 1,643,999 655,039

Vacancy Rate 0.69% 0.58% 0.52% 2.96% 1.22%

Absorption (Quarterly) 1,221,860 (3Q) 30,723 (2Q) 2,793,304 (1Q) 1,484,140 (4Q) 2,839,234 (3Q)

Absorption (YTD) 4,045,887 2,824,027 2,793,304 5,487,334 4,003,194

Bulk Inventory (100,000 SF+) 40,076,533 38,859,573 38,859,573 37,440,573 35,605,973

Bulk Vacant 30,000 30,000 0 1,304,947 434,147

Bulk Vacancy Rate 0.08% 0.07% 0% 3.48% 1.21%

Bulk Absorption (Quarterly) 1,216,960 (3Q) -30,000 (2Q) 2,723,947 (1Q) 1,242,300 (4Q) 2,871,651 (3Q)

Bulk Absorption (YTD) 3,910,907 2,693,947 2,723,947 4,931,401 3,689,101

20%

18%

16%

14%

12%

10%

8%

6%

4%

2%

0%

Vacancy Rate1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

2.96%2.51%

2.60%

5.91%

8.14%

2.89%3.79%

5.39%

8.70%

12.98%

18.62%18.57%

14.31%

11.84%

9.03%

5.46%

3.04%2.43%

2.96%

0.69%3Q

Industrial Vacancy Rate SAVANNAH 1999 - 3Q 2018

COLLIERS INTERNATIONAL | SAVANNAH545 E. York Street | 912 233 7111

www.colliers.com/savannah

INDUSTRIAL MARKET REPORTSAVANNAH | 3RD QUARTER 2018

AVAILABLE BUILDINGS

CENTERPOINT INTERMODAL CENTER BUILDING 7

±247,809 SF | 1Q 2019Danny Chase | 912 662 8012 John Neely | 912 662 8008

SCANELL MORGAN LAKESWAREHOUSE A

±325,867 SF | 1Q 2019Cliff Dales | 912 662 8009 Hilary Shipley | 912 662 8013

SAVANNAH RIVER INT’L TRADE PARK

±281,467 SF | 4Q 2018Cliff Dales | 912 662 8009 Hilary Shipley | 912 662 8013

437 TELFAIR ROAD

±207,676 SF | 1Q 2019David Sink | 912 662 8010

PORT LOGISTICS AT SAV RIVER INT’L TRADE PARK

±660,490 SF | 4Q 2018Cliff Dales | 912 662 8009 Hilary Shipley | 912 662 8013

SAVANNAH PORT LOGISTICS CENTER

±1,075,000 SF | 2Q 2019Cliff Dales | 912 662 8009

AVAILABLE SITES FOR SALE OR BUILD-TO-SUITS

CARLYLE PARK

500+ Acres, divisible - sites available for warehouse facilities up to 500,000 SF

David Sink | 912 662 8010Ashley Smith | 912 662 8011

BELFAST COMMERCEPARK±1,040 Acres, divisible - Class A rail served CSX Select Site, GRAD certified, shovel readyDavid Sink | 912 662 8010Danny Chase | 912 662 8012

SAVANNAH GATEWAY INDUSTRIAL HUB±2,700 Acres, divisible - Class 1 rail, CSX and NS, GRAD certified, flexible lot sizesCliff Dales | 912 662 8009David Sink | 912 662 8010

SCANNELL MORGAN LAKES±998,000 SF build-to-suit, class A tilt-wall constructionCliff Dales | 912 662 8009Hilary Shipley | 912 662 8013

CONTACT: DAVID SINK, SIOR | 912 662 8010 | david.sink@colliers.com HILARY SHIPLEY | 912 662 8013 | hilary.shipley@colliers.com

COLLIERS INTERNATIONAL | SAVANNAH545 E. York Street | 912 233 7111

www.colliers.com/savannah

INDUSTRIAL MARKET REPORTSAVANNAH | 3RD QUARTER 2018

This market report is a research document of Colliers International. Information herein has been deemed reliable and no representation is made as to the accuracy thereof. Colliers International | Savannah, is an independently owned and operated business and a member firm of Colliers International Property Consultants, an affiliation of independent companies with over 404 offices throughout more than 68 countries worldwide.

SOUTHEAST REAL ESTATE BUSINESS - OCTOBER 2018 Though Savannah by all standards is a small industrial market, you would never know it from the activity in the area. At 58 million square feet, the Port City is poised to add an astounding 9.75 million square feet by mid-2019. The force behind all of this growth is attributed to one key factor: The Georgia Ports Authority.

The Georgia Ports Authority (GPA) is an economic giant in Georgia supporting 1 of every 11 jobs in the state and accounting for 8% of its GDP. Home to the largest single container terminal in North America, GPA moved ±4.2 million TEUs in fiscal year 2018, an 8% increase over 2017 and an all-time record for the Port. With both CSX and Norfolk Southern on terminal, GPA also handled a record ±435,000 rail lifts in FY 2018 which was a 16.1% increase over 2017. As the fastest growing port in the country, one might be concerned about congestion becoming an issue for the Port, but reinvestment remains a top priority for the Port, and it recently opened its second inland port to move more containers towards population centers via CSX rail. It doesn’t hurt either that Savannah, geographically speaking, is at a logistical advantage to many of its east coast competitors. As one of the most western points on the eastern seaboard, containers are able to stay on ships longer before coming to Port. Once off the ship, trucks have a mere ±6 mile drive to I-95 (north/south) and ±9 miles to I-16 (east/west) with access to Atlanta, Charlotte, and Orlando within a 4 hour drive time. With numbers like these it’s no wonder the industrial world has taken notice.

As the Port continues to grow, so does demand for industrial space within close proximity to the Port. In the 3rd quarter, Colliers reported a vacancy rate of 0.69%. With this dual combination of Port growth and lack of available space, developers have taken action. As noted, ±9.28 million square feet is currently under construction; ±4.5 million square feet of that is build-to-suit and the balance is spec. Market veterans such as Duke Realty, Centerpoint Properties, and Scannell Properties are all expanding their portfolios. Duke purchased a ±65 acre tract for future development, Centerpoint is going vertical on new spec, and Scannell has both spec and build-

HISTORICALLY LOW VACANCY, PORT GROWTH DRIVE SAVANNAH’S INDUSTRIAL DEVELOPMENT

THE GEORGIA PORT AUTHORITY

INDUSTRIAL DEMAND AND DEVELOPMENT Savannah

Chicago

Oklahoma City

Dallas

Atlanta

Nashville

St. LouisKansas City

Cincinnati

MobileBirmingham

RichmondWichita

Omaha

Sioux Falls

Austin

Des Moines Pittsburg

1 Day2 DaysCharlotte

New York

Amarillo

MemphisLittle Rock

JacksonNew Orleans

Minneapolis

Miami

of the U.S. population can be reached from Savannah within a two-day driveSource: Savannah Economic Development Authority70%

LOGISTICAL ADVANTAGE

Class I Rail CSX & Norfolk Southern

I-16 & I-95Immediate Access to

Two Major Interstates

GATE

WAY

POR

TS

10K+ TEU VESSEL CALLS

www.colliers.com/savannah

INDUSTRIAL MARKET REPORTSAVANNAH | 3RD QUARTER 2018

This market report is a research document of Colliers International. Information herein has been deemed reliable and no representation is made as to the accuracy thereof. Colliers International | Savannah, is an independently owned and operated business and a member firm of Colliers International Property Consultants, an affiliation of independent companies with over 404 offices throughout more than 68 countries worldwide.

to-suit projects underway. The current conditions have also attracted a flurry of new investors with groups like MDH, CTR (Crane Transportation Realty), Capital Development Partners, Chesterfield, Rooker with Solution Property Group, McCraney and PNK all developing buildings within ±10 miles of the Port. Chesterfield has begun construction on a ±1.2 million square foot fee development project for JLA Home. This is JLA’s 2nd development over 1 million square feet in 3 years.With nearly no available existing space on the market, and many of the projects under construction delivering late 2018 or early 2019, there have been a limited number of leasing transactions in 2018. Most recently, PNK leased 356,800 SF to GoPlus. Duke leased 322,500 square feet to Home Furniture International, which is new to the Savannah market in mid-August. Keen Transport expanded its Savannah footprint by leasing 157,500 square feet from Sentinel in June. Additionally, Floor & Décor moved into its new 1.4 million square foot facility developed by Duke and Shaw moved into its ±1 million square foot building developed by CRG at Northport. Both deals were signed in 2017.

Investors are also on the hunt for Savannah properties and recent cap rates reflect the market’s strength. In June, GCP, LLC bought Duke’s 150 Portside Court. The building is 800,000 square feet and occupied by Home Depot. Earlier in the year, CRG sold its two buildings both of which are occupied by Shaw Industries. Its 1,001,508 square foot building sold to Griffin Capital Essential Asset REIT, and its 831,764 square foot building sold to Monmouth Real Estate.

Between existing market tenants discussing expanding and big name newcomers circling, 2019 is guaranteed to be an interesting one for the Savannah market. Ultimately, how quickly the market can absorb the ±5.5 million square feet of spec slated for delivery will determine the next wave of development, but if the Port continues to expand at the rate it has, the Savannah industrial market won’t be too far behind it.

HISTORICALLY LOW VACANCY, PORT GROWTH DRIVE SAVANNAH’S INDUSTRIAL DEVELOPMENT

By: Hilary ShipleyAssociateColliers International

MARKET OUTLOOK

TOP 5 GROWTH MARKETS NATIONAL STATS | RECORD BREAKING

203.6MSF

YTD OverallNet Absorption

11.3% higher than this time last year

$5.91PSF/YR NNN

WHSE/DistributionDirect Asking Rents

All-time record high

4.9%Overall

Vacancy Rate

All Time Record Low

267.6MSF

ProductUnder Construction

All-time record highNet Absorption as a % of Inventory