GRAHAM REPORT/2013 TABLE OF CONTENTS. Industrial Market Overview Jetplex Industrial North Huntsville Industrial... 3

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1 2013 Market survey huntsville

2 GRAHAM REPORT/2013 HUNTSVILLE, Alabama The Huntsville commercial real estate market produced mixed results in Retail and industrial markets continued to improve, but the office market suffered a dramatic increase in vacancy. The vacancy rate in the retail sector fell to 9.05%, well below the 12% vacancy rate of This decrease marks the fourth year in a row the retail vacancy has dropped, and the outlook for 2013 is continued slow growth. The industrial market improved slightly as the vacancy rate fell to 11.62%. The driving force behind industrial growth has been increased demand for high-bay space by defense contractors in the Huntsville market. The outlook for 2013 is continued growth as the effects of the much-anticipated housing recovery begin to be felt. Office market vacancy rose dramatically in 2012 to 12.55%. Most vacancy occurred in the Cummings Research Park (CRP) area, as looming defense cuts and sequestration negatively impacted the outlook of companies located in CRP. The 2013 outlook remains cautious as most companies await guidance from Washington DC on the budget. TABLE OF CONTENTS Industrial Market Overview Jetplex Industrial North Huntsville Industrial Chase Industrial Information deemed reliable, but not guaranteed. Copyright Reproduction, in whole or part, of this report is prohibited. Cover: Special thanks to Huntsville Veterans Memorial for providing our cover photo. Special thanks to Hiroko Sedensky and the Chamber of Commerce of Huntsville/Madison County for providing the Cummings Research Park map and the Major Retail Stores map. Office Market Overview... 5 Downtown Office... 6 Jetplex Madison Office... 7 Cummings Research Park Office... 8 Cummings Research Park Map Retail Map Retail Market Overview...14 Recent Graham Activities For Sale or Lease Graham Huntsville Group....23

3 [ 22.0 MILLION SF TOTAL ] SINGLE TENANT 16,950,555 SF MULTI-TENANT 5,110,122 SF OVERALL VACANCY 11.62% 2013 Industrial Market Overview HUNTSVILLE industrial MARKET OVERVIEW INDUSTRIAL: The vacancy rate for the Huntsville industrial market fell to 11.62% in 2012, decreasing slightly from 12.28% in Huntsville vacancy remains below the national average of 12.80%. The national industrial market has undergone a slow but steady recovery. The national vacancy average fell by 30 basis points in the 4th quarter of 2012 and has now dropped for 10 consecutive quarters since the rate peaked at 14.6% in the 2nd quarter of The 4th quarter 2012 decrease is the largest quarterly drop since the recovery began in Huntsville did experience positive absorption of industrial inventory for the first time since 2009, much due to the leasing activity by defense related firms in the Jetplex area. Defense companies requiring high bay space are back-filling buildings previously leased or owned by companies in the automobile sector. New construction for large industrial buildings was almost nonexistent in However, new construction increased for 10k 15k square foot facilities, specifically in the Space Gate and Madison Boulevard areas. Industrial Announcements of Note: Toyota Motor Manufacturing broke ground on a 300,000 sf expansion that will increase the plant s capacity to build more V6 engines. The expansion will create 125 new jobs, bringing total employment to 1,150. The plant will be building 216,000 more V6 engines than last year, and the total capacity for V6 production will reach 362,000 per year. Carpenter Technology Corporation announced its selection of a site to construct a new 400,000 sf manufacturing facility. The new steel plant will be located near Athens in Limestone County. It is expected to be operational in 2015 and will employ 200 people. Carpenter Technology Corporation is headquartered in Pennsylvania. Several defense companies expanded their industrial presence in the Huntsville area. Yulista Management Services and SAIC leased large blocks of space in the Jetplex industrial market. HUNTSVILLE INDUSTRIAL ABSORPTION 2012 INDUSTRIAL MARKET VACANCY RATE industrial market single tenant multi tenant overall jetplex 13.32% 18.98% 15.16% NORTH HUNTSVILLE 6.01% 12.35% 8.11% chase 1.37% 0% 1.36% 2012 VACANCY RATE industrial market total sf vacant sf single tenant 16,950,555 SF 1,676,808 sf 3.27% 5.61% 8.50% 10.82% 9.89% multi-tenant 5,110,122 sf 886,381 sf 8.31% 19.19% 21.01% 16.97% 17.35% total industrial 22,060,677 sf 2,647,268 sf 4.51% 9.04% 11.59% 12.28% 11.62% GRAHAM & COMPANY 2013 Market survey HUNTSVILLE 1

4 [ 12.4 MILLION SF TOTAL ] Jetplex Industrial Market SINGLE TENANT 8,398,342 SF MULTI-TENANT 4,041,032 SF OVERALL VACANCY 15.16% The vacancy rate for Jetplex Industrial Park was 15.16% in 2012, a decrease from the 16.15% in Most of the Jetplex market vacancy consists of large contiguous blocks of space. The 800,000 sf former Continental building is the largest block and accounts for 42% of the market s vacant space. Jetplex Industrial Park is Huntsville s largest industrial base and represents 58% of the Huntsville industrial market. Jetplex Industrial Park is comprised of several smaller submarkets that surround the Huntsville International Airport and the Intermodal Center. Jetplex Industrial Park contains 1,470 acres and offers Foreign Trade Zone #83, U.S. Customs Port of Entry and interstate access via I-565. Jetplex South Industrial Park contains 1,400 acres and is located just south of Jetplex Industrial Park. Lowe Industrial Park is a 900-acre park originally designed to encompass the growth of Intergraph Corporation. Recent Developments: SAIC leased the former Benchmark Electronics building on Kellner Road. Futaba completed construction of its 50,000 sf manufacturing facility. Futaba makes lighted displays for automotive dashboards, microwaves, TVs and other entertainment equipment. Yulista leased the former Perfect Home facility on Wall Triana Highway. Georgia Pacific leased 78,000 sf at Airport Distribution Center II, a 208,000 sf facility built in Barksdale Dental Lab closed on a 10,500 sf building and plans to spend around $2.1 million on the project. Barksdale also plans to add 15 employees to its staff this year, and an additional 10 in the subsequent two years. CDI Electronics purchased the 40,000 sf former Raytheon building on James Record Road. CDI engineers and manufactures top quality marine ignition products. Major Area Tenants Include: Yulista, Navistar, SES, Georgia Pacific and Kohler. yulista Yulista leased the former Perfect Home facility. Yulista employs over 700 people in the Huntsville area and occupies over 400,000 sf in 8 Huntsville locations. 2 GRAHAM & COMPANY 2013 Market survey HUNTSVILLE

5 [ 2.9 MILLION SF TOTAL ] SINGLE TENANT 1,965,966 SF MULTI-TENANT 967,090 SF OVERALL VACANCY 8.1% North Huntsville Industrial Market The vacancy rate for the North Huntsville industrial market was 8.11% in 2012, a decrease from the previous year s rate of 10%. The North Huntsville industrial market is comprised of just over 2.9 million sf and represents 13.5% of the total Huntsville industrial market. Most buildings in this market have a smaller footprint than buildings in Jetplex or Chase industrial parks. Many buildings in this market have been recently constructed and are located along the Highway 53 corridor, providing good access to North Alabama and Southern Tennessee. The centralized location and ease of access have made the market a very attractive location for light industrial users with growing needs in the Tennessee Valley. The tenant mix in the North Huntsville area consists of companies in the automobile industry, local and national service companies and defense companies. Recent Developments: Toyota broke ground on its 300,000 sf building expansion to boost its engine making capacity. The engines will be installed in the Camry, Highlander, RAV4, Sienna and Venza vehicles. Several defense companies, including ChandlerMay and Amtec, leased space in the Spacegate submarket. Major Area Tenants Include: Toyota, Ferguson, ChandlerMay, Amtec and Waste Management research park BOULEVARD Chandler-May and Amtec leased space at this multi-tenant facility in Spacegate Industrial Park. GRAHAM & COMPANY 2013 Market survey HUNTSVILLE 3

6 [ 5.0 MILLION SF TOTAL ] Chase Industrial Market SINGLE TENANT 4,948,830 SF MULTI-TENANT 102,000 SF OVERALL VACANCY 1.4% The vacancy rate for Chase Industrial Park was 1.4% in 2012, a decrease from the 2.10% in Chase represents 22% of the entire Huntsville industrial market. Chase Industrial Park, a development of the Madison County Commission, is a 1,700-acre park located in northeast Huntsville. Chase Park is comprised almost exclusively of single tenant employers. Only 50 acres remain available in the park for new development. Products manufactured in the park include medical instruments, DVDs, copper and plastic products and pharmaceuticals. Recent Developments: A Phoenix, Arizona based private equity firm, The Najafi Companies, acquired Cinram International. Cinram has a large presence in the Huntsville market and manufactures and distributes prerecorded media products for movie studios, music labels, publishers and software companies. Its customer base encompasses movie and entertainment companies, publishers and retailers. srs roofing SUPPLY SRS Roofing Supply specializes in the distribution of residential and commercial roofing products and accessories. Major Area Tenants Include: J and J South Central, Qualitest Pharmaceuticals, CF Flag, Cinram, PPG Industries, Schwarze Industries, Kommerling, Available Plastics, Hart & Cooley, Trav-Ad Signs, and SRS Roofing Supply. trav-ad signs Trav-Ad Signs provides custom manufacturing, service and installation for interior and exterior signage and vehicle wraps. 4 GRAHAM & COMPANY 2013 Market survey HUNTSVILLE

7 [17.2 MILLION SF TOTAL ] SINGLE TENANT 8,444,733 SF MULTI-TENANT 8,752,673 SF OVERALL VACANCY 12.55% Office Market Overview HUNtsvILLE OFFICE MARket OveRVIEW OFFICE: Huntsville office market vacancy increased dramatically in 2012, rising to 12.55%. This increase marks a significant rise over 2011 s vacancy rate of 8.71%. A slowdown in defense spending and the pending sequestration negatively impacted the Cummings Research Park (CRP) area. Many defense related companies downsized, increasing the overall vacancy rate in CRP to 8.94%, up substantially from 2011 s 4.5%. Multi-tenant vacancy in CRP rose from 9.59% to the 2012 rate of 17.96%. The 2+ million sf of new construction on Redstone Arsenal to support Base Realignment and Closure (BRAC) has impacted the CRP market as well. Some companies previously located within CRP are now occupying new construction on Redstone Arsenal. New building construction in the office sector increased sharply in Located primarily in the CRP and downtown markets, most new buildings are pre-leased to companies consolidating several different locations into new single facilities. Huntsville unemployment fell from 6.4% in 2011 to 5.5% in 2012, and the Huntsville vacancy rate is still below the national average of 15.4%. The national vacancy average declined in 2012 from the previous year s 16.4% rate, and analysts predict that the national office sector will continue to slowly improve in Office Announcements of Note: Boeing announced its signed agreement to occupy over 350,000 sf at Redstone Gateway. The Boeing named, three-building complex is scheduled to be completed in spring of Intergraph began construction on a new $58 million headquarters that is scheduled for completion in The 250,000 sf office building will accommodate 1,100 employees. Construction began on Twickenham Square, a $100 million, multi-use project located in downtown Huntsville. The project will include a 100,000 sf office building, over 50,000 sf of retail space, a four-story apartment tower and a Homewood Suites. HUNtsvILLE OFFICE ABSORPTION 2012 OFFICE MARket VACANCY RAte OFFICE market single tenant multitenant overall Cummings ReseaRCH PARK JETPleX/ MADISON CentRal Business DISTRICT 3.11% 17.96% 8.94% 0% 30.61% 19.69% 4.81% 18.81% 21.98% 2012 VACANCY RAte OFFICE market total sf vacant sf single tenant 8,444,733 SF 406,413 sf 4.47% 4.55% 4.42% 3.54% 4.81% multi-tenant 8,752,673 Sf 1,752,666 sf 9.54% 14.35% 11.90% 13.84% 20.02% total OFFICE 17,197,406 sf 2,159,079 sf 7.0% 9.33% 8.11% 8.71% 12.55% GRAHAM & COMPANY 2013 Market survey HUNTSVILLE 5

8 [3.0 MILLION SF TOTAL ] Downtown Office Market SINGLE TENANT 410,937 SF MULTI-TENANT 2,759,664 SF OVERALL VACANCY 21.98% The Huntsville downtown office market consists of approximately 3 million sf and is dominated by the business services sector including law firms, banking, accounting and real estate companies. City, county and government employees also make the downtown Central Business District (CBD) their home. Vacancy in the downtown market increased slightly to 21.98% from the previous year s rate of 21.50%. The downtown office market continues to evolve. Several buildings in the market have been redeveloped for other uses, including retail and apartment use. Recent Developments: The much anticipated Twickenham Square project, which includes a 100,000 sf office tower, broke ground. The office building has been partially leased to Huntsville Hospital and will have an elevated walkway that will connect the building to the Huntsville Hospital parking garage. Alabama Media Group announced plans to lease over 12,000 sf at 200 Westside Square, located on the Madison County Courthouse Square. The company, which published the Huntsville Times and contributes to al.com, will be moving from the former Huntsville Times location on Memorial Parkway. Big Springs Inc., a local producer of Coca-Cola and other soft drinks since 1902, announced that it will discontinue soft drink production at its Clinton Avenue plant, located across the street from the Von Braun Center. The former Kress building on Washington Street was leased by Fubar, a restaurant and nightclub venture. Major Area Tenants Include: PNC Bank, the City of Huntsville, Lanier Ford, Alabama Media Group, Bradley Arant Boult Cummings, BB&T and Huntsville Hospital. TWICKENHAM SQUARE Twickenham Square is a $100 million, multiuse project that will include a 100,000 sf office building, 50,000 sf of retail, an apartment tower and Homewood Suites. 6 GRAHAM & COMPANY 2013 Market survey HUNTSVILLE

9 [ 1.6 MILLION SF TOTAL ] SINGLE TENANT 690,000 SF MULTI-TENANT 1,244,740 SF OVERALL VACANCY 12.3% Jetplex Madison Office Market Vacancy for the Jetplex/Madison office market decreased slightly to 12.3% in 2012 compared to 13% in Intergraph and Boeing remain the largest office tenants within the market. Demand in medical and the business services office sector has increased dramatically in Madison over the last five years. Growth is expected to continue in both sectors as Madison grew by 46% according to the 2010 Census and is one of the fastest growing cities in the State of Alabama. The new Madison Hospital, completed in 2011, should spur further medical development in the area. New Developments: Boeing will begin vacating some of its office space in the Jetplex area as the multi-building project at Redstone Gateway nears completion. The staged, two-year roll-out of the buildings will impact both the Jetplex and CRP markets. The Sci-Quest Museum announced plans to relocate from Cummings Research Park to the City of Madison. The new facility at 9076 Madison Boulevard will provide 36,000 sf for the hands-on science center. Construction began on the Crestwood-Madison facility. The 28,000 sf two-story office building is located on Hughes Road. The building is currently leased by Crestwood Diagnostics Center, Crestwood Sleep Center and General Surgical Associates. Major Area Tenants Include: Intergraph, Boeing, Madison Hospital and Avnet. CRESTWOOD DIAGNOSTIC CENTER Crestwood Diagnostic Center, a 28,000 sf medical office building, offers multiple imaging and laboratory services. GRAHAM & COMPANY 2013 Market survey huntsville 7

10 [ MILLION SF TOTAL ] Cummings Research Park Office Market SINGLE TENANT 7,343,796 SF MULTI-TENANT 4,748,269 SF OVERALL VACANCY 8.94% Cummings Research Park (CRP) office vacancy increased from 4.75% in 2011 to 8.94% in Multi-tenant vacancy is now 17.96%, up from 9.59% the previous year. Three factors triggered this large increase: 1) a reduction in defense spending 2) a large amount of new construction on Redstone Arsenal and 3) the threat of sequestration. CRP is the largest office market in Huntsville with over 12 million sf. This submarket represents over 70% of the total Huntsville office market. Most companies in CRP act in a support role to meet the various demands for the military installations located on Redstone Arsenal. Redstone is home to the U.S. Army Aviation and Missile Command (AMCOM), the Space and Missile Defense Command, numerous Program Executive Offices (PEO) and major components of the Defense Intelligence Agency and the Missile Defense Agency. Cummings Research Park is the second largest research park in the United States. The park encompasses 3,843 acres and includes over 12 million sf of office space. Only 430 acres remain for future development. The park mix ranges from Fortune 500 companies to local entrepreneurial start-ups to award-winning small businesses. ADTRAN ADTRAN, Inc. is a leading global provider of networking and communication equipment with its corporate headquarters in Huntsville, AL. BOEING Boeing will occupy the first building of its 3-building campus at Redstone Gateway in Construction on the additional two facilities should be completed by GRAHAM & COMPANY 2013 Market survey huntsville

11 Cummings Research Park Office Market Recent Developments in the CRP Market: Dynetics opened its 226,500 sf multi-use facility in CRP West. The building has high-bay and low-bay space, multiple labs, manufacturing space and a clean room. This prototyping facility will give the company room to expand its capabilities in its five focus areas of intelligence, missiles, aviation, cyber and space. Raytheon was awarded a $925 million contract with the Missile Defense Agency for continued development of the Standard Missile-3 Block IIA missile. The SM-3 missiles will be assembled in Huntsville and will play a key role in U.S. and NATO defense. The interceptor is used by U.S. and Japanese navies to destroy short-to-intermediate range ballistics. ATK was awarded a $50 million contract by NASA to help develop the Space Launch System. The core booster for this next generation heavy-lift rocket is being developed at Huntsville s Marshall Space Flight Center. L-3 Communications Holdings, Inc. completed the spin-off of Engility, a new, independent, publicly traded government services company. Engility is a leader in systems engineering and technical assistance, training and operational support services. Nectar Therapeutics vacated its 51,000 sf building on Explorer Boulevard. The building was built in 2000 and consists of 15,000 sf of office and 36,000 sf of R&D/lab space. Construction began on a Home2 Suites and Hampton Inn combination facility. The Home2 Suites, by Hilton, will have 78 suites while the Hampton Inn will have 97 rooms. RAYTHEON Raytheon Company is a technology and innovation leader specializing in defense, security and civil markets throughout the world. Sublease space available in the CRP market exceeded 200,000 sf. Kratos, SAIC, CSC and QinetiQ were actively marketing space for lease in their facilities. COPT began construction on two buildings of the planned three-building campus for Boeing. Construction of the second building should be complete in fall of 2013 while the third building should be completed in spring of Wyle broke ground for a newly leased three-story 120,000 sf building in CRP. Triad Properties is developing the property, and construction costs are estimated at over $18 million. Scheduled for completion in September 2013, this building will consolidate several current Wyle CAS locations. More than 350 of the company s 1,100 Huntsville based employees will work in the new facility. Major Area Tenants Include: SAIC, Yulista, AEgis Technologies, ADTRAN, CSC, Northrop Grumman, Dynetics, Lockheed Martin, BAE Systems, Camber Corporation and numerous other high-tech companies. GRAHAM & COMPANY 2013 Market survey HUNTSVILLE 9

12 Center of Attention... H u n ts v i l l e, a l a b a m a c u m m i n g s researc h par k CRP WEST CRP EAST

13 MAJOR RETAIL STORES Huntsville, alabama One of Forbes Leading Cities for Business...

14 Retail Market Overview [ 12.6 MILLION SF TOTAL ] OVERALL VACANCY 9.05% HUNTSVILLE retail MARKET OVERVIEW RETAIL: Positive momentum from 2011 carried forward into early 2012 only to have momentum decline as fiscal and political worries tempered forward thinking optimism. National vacancy levels did fall from 11% in 2011 to 10.4% in 2012, according to Reis, Inc., and net absorption levels closed the year strong. Signs of continued retail recovery exist, but the overriding theme in the market is still uncertainty. Cassidy Turley cites housing as the major sea change in the 2012 recovery. The improved housing market seems to be a major driver in the retail recovery. In 2012, single family home prices rose substantially in major metro areas; this rise in value helps create a wealth effect leading to stronger consumer spending. Planned new store openings are at a four year high, with dollar stores and food retailers fueling the growth. Dollar General, Family Dollar and Dollar Tree plan to open over 1,500 new stores collectively over the next 12 months. Subway plans to open 5,000 stores in and Five Guys Burgers plans to open 1,200 new locations. Negatively impacting the overall retail market is the trend toward smaller stores, particularly in urban locations. This downsizing, coupled with the absence of speculative building space, explains the continued decrease in delivery of new product. Only 47.6 million sf of retail space was delivered in Retail investment sales and closed retail transactions both increased 20% from the previous year. Nationally and locally, Class A properties in prime locations continue to be at or near 100% occupancy. The Huntsville market experienced another positive year in Retail vacancy closed the year at 9.05%, down from 9.87% in While backfilling of vacant existing retail space continues, a large contributor to the drop in vacancy is the addition of over 450,000 sf of new development coming on board at or near 100% occupancy. Two new significant developments located in the Madison submarket account for 416,000 sf of this new space. The University West submarket continued to make a comeback with some backfilling of vacant big box space, but still has the highest vacancy rate due to dark big boxes. However, every Huntsville submarket saw a decrease in vacancy in Jones Valley continued to be the best performing market in Huntsville with 2.53% vacancy. The Village on Whitesburg had several new restaurants lease space with Drakes, Shane s Rib Shack and Zoe s Kitchen all opening in Though both the North Huntsville and South Parkway markets saw positive growth in relation to vacancy, these markets remain in transition. Road construction on North and South Memorial Parkway has created a challenge for companies located in the path of the expansion. Now that construction is complete, improved retail and leasing activity is expected in these markets VACANCY RATE Retail market TOTAL SF vacant SF UNIVERSITY WEST 3,856,040 sf 571,688 sf 18.62% 16.50% 15.14% 14.83% highway 72/madison 2,695,302 SF 181,650 sf 6.97% 8.83% 6.32% 6.74% jones valley/hampton cove 1,954,322 sf 49,350 sf 4.42% 3.73% 3.49% 2.53% south huntsville 2,243,839 SF 151,410 sf 6.55% 8.94% 8.44% 6.75% NORTH HUNTSVILLE/harvest 1,888,443 sf 189,980 sf 10.78% 11.05% 11.31% 10.06% total retail 12,637,946 sf 1,144,078 sf 11.11% 10.80% 9.87% 9.05% 14 GRAHAM & COMPANY 2013 Market survey HUNTSVILLE

15 Retail Market Overview walmart SUPERCENteR A 180,000 sf Walmart supercenter anchors the Colonial Promenade development in Madison, AL. homegoods HomeGoods opened its first Huntsville location, backfilling the former Barnes & Noble space on University Drive Activity: the Shoppes at Valley Bend, a 780,000 sf Target anchored power center, sold for approximately $72.5 million at a sub 7.5% cap rate. Bridge Street Town Centre sold for $207 million at a 6.10% cap rate. A 178,000 sf freestanding Walmart developed by Colonial Properties opened on Highway 72 West. the Shoppes of Madison, a 28 acre Target anchored retail development with 240,000 sf of retail space opened in early Madison Corners, a mixed use development at Highway 72 and Balch Road, opened in This site includes medical space, retail space, a hotel and outparcels. village of Providence completed a new 10,000 sf office/retail building. Spring Hill Suites also opened a location at Village of Providence. Texas Roadhouse restaurant along with 12,000 sf of shop space opened at Watercress Green, an 86-acre mixed-use development at Highway 72 and Jeff Road. A new 11,000 sf Bender s Gym opened at Hwy 53 Center, a 43,000 sf neighborhood center at Hwy 53 and Research Park Blvd. A new 25,000 sf HomeGoods backfilled the former Barnes & Noble location on University Drive. RetAil OCCUPANCY BY TYPE GRAHAM & COMPANY 2013 Market survey huntsville 15

16 Retail Market Overview Announcements of Note: Bridge Street began construction of a 170,000 sf Belk Department Store and 45,000 sf of additional shop space. Terra Equities started construction of Medical Park Station, a 32,000 sf retail center, located on Highway 72 between the Shoppes of Madison and the New Madison Hospital. Tenants will include Taziki s, Dunkin Donuts, Sprint, Mattress Firm and Appleton Learning. Construction is underway on Twickenham Square, a 55,000 sf Publix anchored retail center located in downtown Huntsville adjacent to Huntsville Hospital. Other site improvements include a hotel, medical office building, city parking garage and 243 unit apartment complex. Publix is scheduled to open in January Crunkleton & Associates announced the development of Legacy Marketplace, a 9,600 sf retail strip center located in Jones Valley next to Kohl s. Dunkin Donuts will occupy one end cap of the center. Angelic Real Estate announced the development of the first retail project on Redstone Arsenal. The 18 acre development will be located at the intersection of Martin Road and Gemini Road. Construction has begun on a new 6,500 sf retail center in Hampton Cove at the northeast corner of Sutton Road and Hwy 431. Anchored by Chick-Fil-A, the center will include 3,400 sf of shop space. TOTAL RetAIL SF BY MARket TOTAL RetAIL SF BY TYPE RetAIL VACANCY RAte BY TYPE TYPE VACANCY RAte neighborhood 9.4% neighborhood/anchored 12.74% HUNtsvILLE RetAIL ABSORPTION power center 7.56% enclosed mall 11.35% Large box 4.14% total 9.05% GRAHAM & COMPANY 2013 Market survey HUNTSVILLE

17 Recent Graham Activities 127 jetplex circle 21,965 sf 127 Jetplex Circle Madison, AL Graham represented Strata Proximity in its lease of this industrial facility. Agent: Jeremy Pope, ccim, SIOR richland plaza 2,667 sf 7193 Highway 72 West Madison, AL Graham represented the owner in leasing space to Jefferson s Restaurant. Agent: David Garnett the atrium 10,000 SF 150 West Park Loop Huntsville, AL Graham represented The Aerospace Corporation in its lease of office space at the Atrium. Agent: Tyler Fanning bailey s landing 3,050 sf 2124 Cecil Ashburn Drive Huntsville, AL Graham represented Johnson Orthodontics in its lease of space at Bailey s Landing. Agent: David Garnett corporate park drive 10,705 sf Corporate Park Office & Technical Center Huntsville, AL Graham represented Red Hat in its lease renewal at Corporate Park. Agent: Jeff Wilke, ccim, SIOR, LEED AP airport distribution CENTER II 78,000 SF Airport Distribution Center II 265 Short Pike Road, Huntsville, AL Graham represented both the landlord and tenant in Georgia-Pacific s lease of this industrial facility. Agents: Jeremy Pope, ccim, SIOR & Jeff Wilke, ccim, SIOR, LEED AP GRAHAM & COMPANY 2013 Market survey huntsville 17

18 Recent Graham Activities SOLD 3801 university drive 8,653 sf 3801 University Drive Huntsville, AL Graham represented the owner in the lease of this former Barnhill s restaurant to DriveTime. Agent: David Garnett memorial parkway 16,554 SF Memorial Parkway Huntsville, AL Graham represented the owner in the disposition of this facility. Agent: Tyler Fanning PROGRESS CENTER 3,513 SF 6767 Old Madison Pike Huntsville, AL Graham represented Stephen Gould Corporation in its lease of office space at Progress Center. Agent: Tyler Fanning richland plaza 4,100 sf 7193 Highway 72 West Madison, AL Graham represented the owner in Far East Market s 10 year lease at Richland Plaza. Agent: David Garnett 151 jetplex boulevard 21,000 SF 151 Jetplex Boulevard Huntsville, AL Graham represented Northrop Grumman in leasing space at this industrial facility in Jetplex Industrial Park. Agent: Bart Smith, ccim, SIOR 810 shoney drive 11,269 sf 810 Shoney Drive, Huntsville, AL Graham leased 94% of this facility with only 688 sf remaining. Tenants include Spine Care, Starkey Mortgage, South Huntsville Dentistry and Behavioral Sciences. Agents: Jeff Wilke, ccim, SIOR, LEED AP & Tyler Fanning 18 GRAHAM & COMPANY 2013 Market survey HUNTSVILLE

19 Recent Graham Activities PARKWAY PLACE MALL 2,577 sf 2801 Memorial Parkway Huntsville, AL Graham represented Dentistry Today in leasing space at Parkway Place Mall. Agent: David Garnett research park office CENTER 35,029 SF 7037 Old Madison Pike Huntsville, AL Graham represented EarthLink in its lease of space at Research Park Office Center. Agent: Jeremy Pope, ccim, SIOR SOLD SOLD boaz fashion outlets 105,900 SF 501 Elizabeth Street Boaz, AL Graham represented the owner in the disposition of this retail outlet shopping center. Agent: David Garnett 1847 keats drive 9,600 sf 1847 Keats Drive Huntsville, AL Graham represented Fairway Lawns in its purchase of this facility. Agent: Jeff Wilke, ccim, SIOR, LEED AP TENANT REPRESENTATION APPLETON LEARNING 3,230 SF Madison, AL & Atlanta, GA Graham represented Appleton Learning Center in opening 2 additional locations. Graham has also represented Appleton in securing space in the Nashville, TN area and will represent them in their planned retail expansion and franchise locations over the next two years. Agent: David Garnett 355 quality circle 15,265 SF 355 Quality Circle Huntsville, AL Graham represented both the landlord and tenant in Orbital Sciences lease of space at 355 Quality Circle. Agents: Bart Smith, ccim, SIOR Tyler Fanning & Jeremy Pope, ccim, SIOR GRAHAM & COMPANY 2013 Market survey huntsville 19

20 For Sale or Lease airport distribution center II 265 short pike road, Huntsville, AL Available: 130,016 SF Located in Jetplex Industrial Park Divisible by 78,000 sf and 52,000 sf Excellent interstate access airport distribution center II Contact: Jeff Wilke, CCIM, SIOR, LEED AP 678 DISCOVERY drive HUNTSVILLE, AL Available: 6,398 SF Class A office in Cummings Research Park West Move-in ready Contact: Tyler Fanning tylerf@grahamcompany.com 678 DISCOVERY drive FORMER EATON HYDRAULICS 1112 BROOKS STREET, decatur, AL Available: 92,000 SF 100% conditioned facility Outside fenced storage available Located near the Central Parkway/Beltline Road intersection FORMER EATON HYDRAULICS Contacts: Jeremy Pope, CCIM, SIOR jeremyp@grahamcompany.com & COCHRAN ROAD Huntsville, AL Available: 201,000 SF Only 1/2 mile to I-565 Center truck court Additional 2.8 acres available Contact: Jeff Wilke, CCIM, SIOR, LEED AP jeffw@grahamcompany.com & COCHRAN ROAD 4950 MEMORIAL PARKWAY HUNTSVILLE, AL Available: 5,000 SF Excellent frontage along Memorial Parkway The 1.45 acre lot allows for additional expansion Contact: David Garnett davidg@grahamcompany.com 4950 MEMORIAL PARKWAY 20 GRAHAM & COMPANY 2013 Market survey huntsville

21 For Sale or Lease quality circle 355 quality circle, Huntsville, AL Available: 20,000 SF to 57,899 SF LEED certified flex space Located in Thornton Research Park Contacts: Jeremy Pope, CCIM, SIOR Tyler Fanning quality circle CHASE COMMERCIAL PARK GREENBRIER ROAD AT I-565, HUNTSVILLE, AL Available: 11 Acres Suitable for retail development Located within Huntsville city limits Existing 4-lane parkway entrance road Contact: David Garnett CHASE COMMERCIAL PARK 125 & 165 ELECTRONICS BOULEVARD huntsville, AL Available: 141,024 SF Located in Jetplex Industrial Park Excellent accessibility to Huntsville s International Intermodal Center Contact: Jeff Wilke, CCIM, SIOR, LEED AP jeffw@grahamcompany.com 125 ELECTRONICS BOULEVARD FORMER PNC BANK BRANCH 309 WEST WASHINGTON STREET, ATHENS, AL Available: 3,280 SF Former PNC Bank branch in the heart of downtown Athens Close proximity to Highway 72 and Highway 31 Contact: Tyler Fanning tylerf@grahamcompany.com FORMER PNC BANK BRANCH county line road land county line road land county line road, huntsville, AL Available: ±126 ACRES Situated 1/2 mile north of the I-565/County Line Road interchange Frontage available on County Line Road Suitable for a variety of uses Contact: David Garnett davidg@grahamcompany.com GRAHAM & COMPANY 2013 Market survey huntsville 21

22 For Sale or Lease CHASE COMMERCIAL PARK CHASE COMMERCIAL PARK GREENBRIER ROAD AT I-565, HUNTSVILLE, AL Available: 168 Acres Located within Huntsville city limits C-4 zoning Adjacent to I-565 ramp access Contacts: Jeff Wilke, CCIM, SIOR, LEED AP Tyler Fanning madison business park south dunlop boulevard, Huntsville, AL Available: 13,000 SF to 72,000 SF Efficient office park with immediate access to I-565 and Highway 20 Office and high-bay warehouse space available Convenient to Redstone Arsenal and Cummings Research Park Contact: Jeremy Pope, CCIM, SIOR madison business park south REDSTONE GATEWAY 7200 REDSTONE GATEWAY, Huntsville, AL Available: 62,366 SF LEED certified flex office in master-planned park Located just outside the main entrance of Redstone Arsenal Contacts: Tyler Fanning Bart Smith, CCIM, SIOR REDSTONE GATEWAY 289 PRODUCTION AVENUE MADISON, AL Available: 9,375 SF 100% conditioned facility 16'-18' ceiling heights 1 dock door; 1 drive-in door Convenient access to I-565 and the Jetplex area Contact: Jeremy Pope, CCIM, SIOR jeremyp@grahamcompany.com 289 PRODUCTION AVENUE 1OO ELECTRONICS boulevard 100 electronics boulevard huntsville, AL Available: 848,107 SF Office and manufacturing campus located in Jetplex Industrial Park Excellent access to I-565, Huntsville International Airport and International Intermodal Center Contact: Jeremy Pope, CCIM, SIOR jeremyp@grahamcompany.com 22 GRAHAM & COMPANY 2013 Market survey huntsville

23 Graham Huntsville Group BART SMITH, CCIM, SIOR MANAGING BROKER JOINED GRAHAM & COMPANY: 2002 AFFILIATIONS/HONORS: Certified Commercial Investment Member (CCIM) designation Society of Industrial & Office Realtors (SIOR) designation Huntsville Rotary Club, Member CLIENTS INCLUDE: Sanmina-SCI Northrop Grumman Cisco COPT Stanley Corporation Wells Fargo Securities DirecTV ATK MITRE Dynetics AEGON Orbital Sciences TYLER FANNING ASSOCIATE JOINED GRAHAM & COMPANY: 2007 AFFILIATIONS/HONORS: CCIM Candidate (Certified Commercial Investment Member) Huntsville Rotaract Club, Member Committee of 100 Young Professionals Initiative, Member Huntsville High School Wrestling Coach CLIENTS INCLUDE: MITRE Prometric PNC Bank Aerospace Corporation Stephen Gould Corporation Wells Fargo Securities Southern Research DRS LYBD Engineering DAVID GARNETT ASSOCIATE JOINED GRAHAM & COMPANY: 2007 AFFILIATIONS/HONORS: CCIM Candidate (Certified Commercial Investment Member) Huntsville/Madison County Auburn Club, Board Treasurer University of Alabama in Huntsville (UAH) Alumni Association, Member Assistant Baseball Coach, Pope John Paul II Catholic High School JEREMY POPE, CCIM, SIOR VICE PRESIDENT JOINED GRAHAM & COMPANY: 2000 AFFILIATIONS/HONORS: Certified Commercial Investment Member (CCIM) designation Society of Industrial & Office Realtors (SIOR) designation Member of National Association of Industrial & Office Properties (NAIOP) Huntsville Madison County Leadership, Board Member Young Professionals Committee of 100, Board Member Downtown 47, Board Member AIDS Action Coalition, Board Member Hudson Alpha Connections Committee Madison County High School Leadership Board CLIENTS INCLUDE: Tyco Owens Corning Intergraph Huntsville Hospital Kuehne & Nagel Harris Corporation Siemens Willbrook Solutions Wolseley Ferguson International Truck & Engine Continental JEFF WILKE, CCIM, SIOR, LEED AP VICE PRESIDENT JOINED GRAHAM & COMPANY: 2000 AFFILIATIONS/HONORS: Certified Commercial Investment Member (CCIM) designation Society of Industrial & Office Realtors (SIOR) designation Economic Development Association of Alabama (EDAA), Member United States Green Building Council, Member CLIENTS INCLUDE: Cinram URS Kohler UPS APAC Mid-South AT&T Sonoco Products Company Alfa Red Hat Smith Barney Royal Cup Delphi Wells Fargo CLIENTS INCLUDE: Tailwinds Development State Farm Insurance Atlanta Dental Supply American Family Care Marco s Pizza Appleton Learning Center GRAHAM & COMPANY 2013 Market survey HUNTSVILLE 23

24 Graham Huntsville Group MARSHANNE CASTRO, CPM, LEED AP VICE PRESIDENT, RETAIL & BUSINESS DEVELOPMENT JOINED GRAHAM & COMPANY: 2003 AFFILIATIONS/HONORS: Member of Institute of Real Estate Management (IREM) Member of Building Owners and Managers Association International (BOMA), Huntsville Association Past President Member of International Council of Shopping Centers (ICSC) Certified Property Manager (CPM) designation United States Green Building Council, Member North Alabama Boys & Girls Club, Corporate Board Member AREAS OF EXPERTISE: Office and Retail Property Management Client Retention Tenant Construction Project Coordination Community Relations JASON DUGGER, RPA, FMA PROPERTY MANAGER JOINED GRAHAM & COMPANY: 2000 AFFILIATIONS/HONORS: Member of Building Owners and Managers Association International (BOMA) Real Property Administrator (RPA) designation Facilities Management Administrator (FMA) designation AREAS OF EXPERTISE: Real Estate Management Customer Service & Administration Environmental Health and Safety Facilities Planning and Project Management Design and Operations of Building Systems ERIKA HARLESS REAL ESTATE ASSISTANT MELANIE KNIGHT PROPERTY MANAGEMENT ASSISTANT BUILDING ENGINEERS SCOTT BOWMAN JASON GRONCZNIAK STEVEN HOLCOMB chris nichols TERRELL WEST Graham & Company s building engineering staff promptly addresses tenant needs with a solutions-oriented approach, offering professional and reliable service. 24 GRAHAM & COMPANY 2013 Market survey HUNTSVILLE

25 about graham & company Founded in 1978, Graham & Company is a full-service commercial real estate firm based in Birmingham. With offices in Birmingham and Huntsville, Alabama and Jacksonville and Gulf Coast, Florida, the company offers professional services including sales, leasing, property management, appraisal, consulting, investment and development. In response to client demand, Graham has systematically extended its range of services and geographic reach, now serving clients throughout Alabama and several surrounding states. affiliations NAIOP National Association of Industrial & Office Properties LEED Leadership in Energy and Environmental Design SIOR Society of Industrial & Office Realtors CRE Counselors of Real Estate ICSC International Council of Shopping Centers IREM Institute of Real Estate Management CCIM Certified Commercial Investment Member BOMA Building Owners and Managers Association Appraisal Institute MEASURE US BY OUR ACTIONS grahamcompany.com birmingham huntsville JACKSONVILLE gulf coast 110 Office Park Drive Suite 200 Birmingham, AL TEL Quality Circle Suite E Huntsville, AL TEL Water Street Suite 1225 Jacksonville, FL TEL Richard Jackson Blvd. Suite 115 Panama City Beach, FL TEL FAX FAX FAX FAX GRAHAM & COMPANY PERSONNEL HUNTSVILLE Principals Steve Graham, MAI, CRE Mike Graham, CPM, SIOR Gardner Lee, CPM, SIOR MANAGING BROKER Bart Smith, CCIM, SIOR PROPERTY MANAGEMENT Jason Dugger, RPA, FMA OFFICE & Industrial Tyler Fanning David Garnett Jeremy Pope, CCIM, SIOR Jeff Wilke, CCIM, SIOR, LEED AP retail & business development Marshanne Castro, CPM, LEED AP real estate asst. Erika Harless PROPERTY MANAGEMENT asst. Melanie Knight RECEPTIONIST Beth Rogers building engineers Scott Bowman Jason Gronczniak Steven Holcomb Chris Nichols Terrell West INDIVIDUAL MEMBERSHIPS INDIVIDUAL MEMBERSHIPS

26 MEASURE US BY OUR ACTIONS 355 Quality Circle, Suite E Huntsville, AL TEL FAX grahamcompany.com BIRMINGHAM Huntsville jacksonville gulf coast