Q1-2018-IndustrialReport

CAPITAL MARKETS STATISTICS Property 135 Will Drive Property City/Submarket Canton 135 Will Drive

Property

400 John Quincy Adams Road 400 John Quincy Adams Road Taunton Stockbridge Capital Group LLC Taunton Stockbridge Capital Group LLC $22,000,000

Property City/Submarket City/Submarket Buyer

City/Submarket Canton Buyer

Equity Industrial Pa Equity Industrial Pa $21,000,000

Buyer Price

Buyer Price Price Total SF Price/SF Cap Rate Total SF Price/SF Cap Rate

Price

$22,000,000 3 0, 0

$21,000,000 415,796

Total SF Price/SF Cap Rate

Total SF Price/SF Cap Rate

MEDIAN $/SF 300,000 $73 $73 4.0%

415,796 $51

SALES VOLUME ($)

NUMBER OF TRANSACTIONS

TOTAL SF

MEDIAN CAP RATE

$51 8.50% 8.50%

4.0%

$450,459,694

92

5,215,783

$92

6.3%

Sales Volume

Sales Volume SALES VOLUME

$700

TRENDS • Industrial is the new darling of commercial real estate investors; both locally and nationally. Record-low vacancies and skyrocketing rents have led to unprecedented levels of activity in Greater Boston’s industrial market in recent years.While sales volume in other asset types has been steadily declining over the last year, industrial transactions have held steady. Nearly $1.8 billion in industrial assets changed hands in 2017, which is on a par with peak-2016 levels, and activity remained strong during the first quarter of 2018. Pricing continues to climb as well, with the median price per square foot surpassing $90 in the first quarter. This represents a 7.4% increase from year-ago levels and a 48.4% increase over the last five years. • Flex/R&D properties accounted for a third of the total industrial sales volume in the first quarter. The transactions were fairly evenly dispersed throughout the region, with CalSTRS sale of the 300,000-square-foot 400 John Quincy Adams Road in Taunton and Riverside Properties’ acquisition of the 94,764-square-foot 561Windsor Street, Somerville representing two of the largest deals in the first quarter. Pricing remains frothy for Flex/R&D properties in Greater Boston, with the median cap rates declining to 5.25% in early 2018. Comparatively, median cap rates for this asset class were close to 10% nearly a decade ago. • Several industrial portfolios traded during the first quarter, with institutional buyers accounting for 51% of total transaction volume. L&B Realty Advisors purchased a two- property portfolio from Novaya Real Estate Ventures for close to $73 million or $96/SF. In a sale-leaseback, BlueLinx Corporation sold a four-property portfolio to Arch Street Capital Advisors and Brennan Investment Group, which included the 489,950-square- foot 419 Maple Street in Bellingham. Finally, TIAA-CREF acquired two industrial properties on Grove Street in Franklin for $17.3 million or $104/SF.

$700

$600

$600

$500

$500

$400

$400

$300

$ (000s)

$300

$ (000s)

$200

$200

$100

$100

$0

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

$0

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Median Price/SF Median Price/SF MEDIAN PRICE/SF

$105

$105

$95

$92

$95

$92

$85

$81

$75

$85

$81

$65

$75

$55

$65

$45

$55

$35

$45

$25

$35

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

$25

TOP Q1 / INVESTMENT SALES

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

INDUSTRIAL SALES

Q1 2017

Q2 2017

Q3 2017

Q4 2017

TOTAL

SALES VOLUME ($) Former Reebok HQ Canton N vaya Portf lio Littleton-Middleboro

$374,173,554 135 Will Drive Canton

$453,379,723 419 Maple Street Bellingham

$433,947,886 400 John QuincyAdams Road Taunton

$385,172,081

$1,646,673,244

# OF TRANSACTIONS

76

78

82

60

296

4,045,511 Stockbridge Capital Group LLC

Equity Industrial Partners Corp.

Arch Street Capital Advisors LLC/Brennan Investment Group

TOTAL SF

4,779,432

6,394,205

4,243,774

19,462,922

Spear Street Capital L&B Realty Advisors LLP

Buyer

Buyer

Buyer

Buyer

MEDIAN $/SF

$75

$59

$103

$86

$90

$88,000,000 72 7

Price

Price

$22,000,000

Price

$21,000,000

Price

$35,875,000

Total SF

680,000 755

Total SF

300,000

Total SF

415,796

Total SF

489,950

Price/SF

$129 96

Price/SF

$73

Price/SF

$51

Price/SF

$73

Cap Rate

-

Cap Rate

4.0%

Cap Rate

8.50%

Cap Rate

8.75%

7