1. www.colliers.com/houston
Q4 2013 | INDUSTRIAL MARKET
2%
3%
4%
5%
6%
7%
8%
-500,000
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
Absorption New Supply Vacancy
With low vacancy, stable rental rates, and positive absorption, Houston’s
industrial market remains one of the top ten healthiest U.S. industrial
markets. Houston posted 2.1M SF of positive net absorption in the fourth
quarter, pushing the net absorption for the year to 7.0M SF. Industrial
leasing activity reached 2.7M SF, partly due to large tenants leasing some of
the 4.4M SF of space currently under construction. Houston’s average
industrial vacancy rate dropped 10 basis points between quarters to 5.2%
from 5.3%, and remained unchanged when compared to the same quarter
one year ago. The citywide average quoted industrial rental rate increased
0.3% between quarters to $5.92 from $5.90 per SF NNN, and increased
5.9% on a year-over-year basis from $5.59 per SF NNN.
Houston’s lack of available industrial inventory has spurred demand for new
product. Developers have responded and currently have 4.4M SF under
construction. Some of the increased activity has been driven by build-to-suit
projects for companies expanding in or relocating to the Houston market;
however, most is in spec developments (3.7M SF). As Houston’s available
industrial inventory shrinks, we believe the increasing demand for new
product will continue to spur both build-to-suit and spec development.
The Houston metropolitan area added 86,200 jobs between November 2012
and November 2013, an annual increase of 3.1% over the prior year’s job
growth. Local economists have forecasted 2014 job growth to remain steady,
adding between 68,000 and 72,000 jobs. Further, Houston’s unemployment
fell to 5.6% from 5.8% one year ago. Houston area home sales increased
19.4% between November 2012 and November 2013.
Houston’s economy is expected to remain strong in 2014 due to steady job
growth and continued expansion in the energy sector.
RESEARCH & FORECAST REPORT
HOUSTON INDUSTRIAL MARKET
ABSORPTION, NEW SUPPLY & VACANCY RATES
Houston YE 2013 Industrial Absorption – 7.0M SF
HOUSTON INDUSTRIAL
MARKET INDICATORS
Q4 2012 Q4 2013
CITYWIDE NET
ABSORPTION (SF) 1.9M 2.1M
CITYWIDE AVERAGE
VACANCY 5.2% 5.2%
CITYWIDE AVERAGE
RENTAL RATE $5.77 $5.92
SF DELIVERED 1.0M 1.6M
SF UNDER
CONSTRUCTION 2.5M 4.4M
Houston
UNEMPLOYMENT 11/12 11/13
HOUSTON 5.8% 5.6%
TEXAS 6.0% 5.8%
U.S. 7.4% 6.6%
JOB GROWTH
ANNUAL
CHANGE
# OF JOBS
ADDED
HOUSTON 3.1% 86.2K
TEXAS 2.5% 275.7K
U.S. 1.7% 2.3M
JOB GROWTH & UNEMPLOYMENT
(Not Seasonally Adjusted)

2. RESEARCH & FORECAST REPORT | Q4 2013 | HOUSTON INDUSTRIAL MARKET
COLLIERS INTERNATIONAL | P.2
Vacancy & Availability
Although 2.2M SF of new inventory
delivered during the fourth quarter,
Houston’s industrial vacancy rate still
dropped by 10 basis points between
quarters to 5.2% from 5.3%. At the
end of the fourth quarter, Houston had
24.5M SF of vacant space, 1.0M SF
less than the previous quarter.
Among the major industrial corridors,
the Northeast Corridor has the lowest
vacancy rate at 2.9%, followed by the
Northwest Corridor at 4.1%.
Houston’s industrial construction
pipeline had 4.4M SF of projects
underway at the end of the fourth
quarter, including 3.7M SF of spec
development. The largest project
under construction is Liberty Property
Trust’s 650,000-SF spec warehouse
located on Fallbrook in the Northwest
Corridor. A list of additional buildings
currently under construction can be
found on Page 4 of this report.
Rental Rates
According to CoStar, our data service
provider, Houston’s citywide average
quoted industrial rental rate for all
product types increased 1.0% from
$5.86 per SF NNN in the third quarter
to $5.92 per SF NNN in the fourth
quarter. According to Colliers’ internal
data, actual lease transactions are in
the $4.32 – $4.80 per SF NNN range
for newer bulk industrial spaces, while
flex rates are ranging from $6.60 to
$9.00 per SF, depending on the
allowance for tenant improvements
and the location of the of the property.
By property type, the average quoted
NNN rental rates are as follows: $5.54
per SF for Distribution space; $4.57
per SF for Bulk Logistics space; $9.30
per SF for Flex/Service space; with
Tech/R&D space averaging $14.25
per SF, according to CoStar.
Absorption & Demand
Houston’s industrial market posted
2.1M SF of positive net absorption in
the fourth quarter, bringing the 2013
year-end total to 7.0M SF. The
Northwest Corridor submarket clearly
out- performed all others in the fourth
quarter, posting the largest positive
net quarterly absorption of 1.5MSF,
followed by the Southwest Corridor
with 304K SF.
There were several major tenant
move-ins contributing to net
absorption gains in the fourth quarter,
including Igloo (535,000 SF); Smart
Warehousing, LLC (151,260 SF);
PrimeSource (149,500 SF); Builders
First Source (148,400 SF); Williams-
Sonoma (74,100 SF); and Rectorseal
(69,133 SF).
Leasing
Houston’s industrial leasing activity
reached 2.7M SF in the fourth quarter.
A list of select fourth quarter industrial
lease transactions are included in the
table below.
1 Colliers International transaction
2 Renewal
3 Expansion
4Pre-lease proposed or under construction
Building Name/Address Submarket SF Tenant Lease Date
225 RailPort East-Southeast Far 600,000 Frontier Logistics LP4
Oct-13
Pinto Business Park North Fwy/Tomball Pky 500,000 HD Supply4
Nov-13
DCT Airtex Industrial Center North Hardy Toll Road 267,000 B&G Foods Dec-13
Gillingham Distribution Center Sugar Land/Ft Bend Co 161,755
Keller Warehousing and
Distribution, LLC1 Dec-13
Pinto Business Park North Fwy/Tomball Pky 130,000 The Reynolds Co4
Nov-13
1128 Silber Rd Northwest Inner Loop 98,506 Integrity Packaging1
Oct-13
Central Green Distribution Center North Hardy Toll Road 83,575 Wartsila North America1,2
Dec-13
Ten West Crossing Bldg 3 Northwest Outliers 67,743 Welltec Dec-13
13721 S Gessner Hwy 59/Hwy 90 (Alt) 47,430 ToolMart Dec-13
1805 Brittmoore Road West Outer Loop 31,250 Benthic USA, LLC Oct-13
1234 Silber Road Northwest Inner Loop 30,757 Sunny Sky Products Oct-13
1218 Silber Road Northwest Inner Loop 25,000 Arbor Contract Services, Inc Oct-13
Beltway Service Center Southwest Outer Loop 24,069 Export 220 Volt, Inc.1,2
Dec-13
7540 Fairview Street West Outer Loop 22,500 Tobul Accumulator, Inc. Oct-13
Q4 2013 Top Industrial Leases

3. RESEARCH & FORECAST REPORT | Q4 2013 | HOUSTON INDUSTRIAL MARKET
COLLIERS INTERNATIONAL | P.3
Houston Industrial Market Summary
Sales Activity
Q4 2013
Total Sales : $1.5B
No. of Properties: 44
Total SF: 13.0M
Average $/SF: $64
Average Cap Rate: None
reported
Menco Management Group sold a
114,923-SF Class B industrial
distribution warehouse to Monmouth
Real Estate Investment Corp. for
$15.3M or $133 per SF. The building,
completed in 2013, is leased to
Federal Express through 11/2023.
Deepwater Corrosion Services, Inc.
sold a 18,384-SF Class C industrial
warehouse to HWM Properties for
$1.5M or $81 per SF. The building is
located on Train Ct in the Northwest
Industrial submarket. The property was
sold as a sale leaseback to Deepwater
Corrosion Services, Inc.
Sources: Real Capital Analytics; CoStar Comps
Market Rentable Area
Direct Vacant
SF
Direct
Vacancy
Rate
Sublet
Vacant SF
Sublet
Vacancy
Rate
Total Vacant
SF
Total
Vacancy
Rate
4Q13 Net
Absorption
YE 2013 Net
Absorption
4Q13
Completions
YE 2013
Completions
SF Under
Construction
Greater Houston Total 483,638,295 24,476,429 5.1% 594,616 0.1% 25,071,045 5.2% 2,058,205 7,024,157 2,170,623 8,045,817 4,447,149
CBD-NW Inner Loop 11,485,642 645,832 5.6% 22,200 0.2% 668,032 5.8% (36,055) 103,974 - - -
Downtown 31,717,528 1,839,091 5.8% - 0.0% 1,839,091 5.8% (69,756) (79,042) - - -
North Inner Loop 5,083,616 451,369 8.9% - 0.0% 451,369 8.9% - - - - -
Southwest Inner Loop 7,313,135 47,070 0.6% - 0.0% 47,070 0.6% 35,828 89,742 - - -
Total CBD Corridor 55,599,921 2,983,362 5.4% 22,200 0.0% 3,005,562 5.4% (69,983) 114,674 - - -
North Fwy/Tomball Pky 16,216,491 1,097,705 6.8% 4,000 0.0% 1,101,705 6.8% 175,992 484,823 - 529,075 1,103,268
North Hardy Toll Rd 26,972,843 2,033,643 7.5% 98,965 0.4% 2,132,608 7.9% 6,498 666,334 531,712 1,961,669 583,148
North Outer Loop 18,139,153 1,139,357 6.3% - 0.0% 1,139,357 6.3% 64,114 104,432 25,000 271,616 351,250
The Woodlands/Conroe 14,109,086 606,349 4.3% - 0.0% 606,349 4.3% 18,958 226,525 10,000 165,645 137,803
Total North Corridor 75,437,573 4,877,054 6.5% 102,965 0.1% 4,980,019 6.6% 265,562 1,482,114 566,712 2,928,005 2,175,469
Northeast Hwy 321 1,181,673 - 0.0% - 0.0% - 0.0% 14,879 9,480 - - -
Northeast Hwy 90 15,807,048 227,946 1.4% 129,000 0.8% 356,946 2.3% (7,725) 100,860 - 20,000 30,560
Northeast I-10 3,602,145 143,081 4.0% - 0.0% 143,081 4.0% (7,911) 6,991 - 21,000 -
Northeast Inner Loop 11,602,910 433,599 3.7% - 0.0% 433,599 3.7% 57,595 302,897 - - -
Total Northeast Corridor 32,193,776 804,626 2.5% 129,000 0.4% 933,626 2.9% 56,838 420,228 - 41,000 30,560
Hwy 290/Tomball Pky 15,583,805 1,011,376 6.5% - 0.0% 1,011,376 6.5% 30,691 219,523 210,085 541,560 1,094,670
Northwest Hwy 6 4,148,353 114,536 2.8% - 0.0% 114,536 2.8% 33,034 34,311 44,400 58,800 -
Northwest Inner Loop 58,478,596 2,031,205 3.5% 143,120 0.2% 2,174,325 3.7% 200,100 388,413 - 150,000 -
Northwest Near 16,848,047 807,297 4.8% 52,719 0.3% 860,016 5.1% 169,517 197,280 - 317,840 132,470
Northwest Outlier 16,785,333 1,100,855 6.6% - 0.0% 1,100,855 6.6% 1,110,041 2,142,294 1,297,426 2,823,853 63,868
West Outer Loop 23,040,101 266,854 1.2% 23,600 0.1% 290,454 1.3% (33,301) 423,921 19,500 77,750 288,350
Total Northwest Corridor 134,884,235 5,332,123 4.0% 219,439 0.2% 5,551,562 4.1% 1,510,082 3,405,742 1,571,411 3,969,803 1,579,358
South Highway 35 31,038,342 1,193,426 3.8% 23,600 0.1% 1,217,026 3.9% (757) 95,616 17,500 133,474 17,500
South Inner Loop 12,959,587 793,977 6.1% - 0.0% 793,977 6.1% (89,560) (248,222) - - -
Total Southern Corridor 43,997,929 1,987,403 4.5% 23,600 0.1% 2,011,003 4.6% (90,317) (152,606) 17,500 133,474 17,500
East I-10 Outer Loop 13,047,099 235,136 1.8% - 0.0% 235,136 1.8% (40,001) (119,601) - - -
East-Southeast Far 46,527,657 4,285,906 9.2% 13,000 0.0% 4,298,906 9.2% 217,291 545,045 - 338,574 420,462
Southeast Outer Loop 18,079,956 594,010 3.3% - 0.0% 594,010 3.3% (95,656) (220,888) - - -
Total Southeast Corridor 77,654,712 5,115,052 6.6% 13,000 0.0% 5,128,052 6.6% 81,634 204,556 - 338,574 420,462
Highway 59/Highway 90 21,838,715 873,433 4.0% 52,372 0.2% 925,805 4.2% 62,942 741,510 15,000 490,000 223,800
Southwest Far 10,711,120 818,571 7.6% 12,500 0.1% 831,071 7.8% 124,028 254,423 - 83,961 -
Southwest Outer Loop 12,750,635 692,991 5.4% 4,240 0.0% 697,231 5.5% 74,530 197,557 - - -
Sugar Land/Ft Bend Co 18,569,679 991,814 5.3% 15,300 0.1% 1,007,114 5.4% 42,889 355,959 - 61,000 -
Total Southwest Corridor 63,870,149 3,376,809 5.3% 84,412 0.1% 3,461,221 5.4% 304,389 1,549,449 15,000 634,961 223,800
Houston Industrial Market Statistical Summary
4th Quarter and Year-end 2013

4. RESEARCH & FORECAST REPORT | Q4 2013 | HOUSTON INDUSTRIAL MARKET
COLLIERS INTERNATIONAL | P.4
Q4 2013 Industrial Under Construction – 50,000 SF or greater
Q4 2013 Industrial Deliveries - 15,000 SF or greater
Submarket Building Address RBA
% Pre-
Leased Developer
Estimated
Delivery Building Description
Hwy290/Tomball PkyInd 8303 Fallbrook Dr 650,000 0.0% LibertyPropertyTrust May-14 Spec Warehouse
North Fwy/Tomball PkyInd 10565 Greens Crossing Blvd 600,750 82.9% Hines Jun-14 Spec Warehouse, HD Supplyleased 500K
Hwy290/Tomball PkyInd DCT Northwest Phase 1 384,680 0.0% DCT Industrial Trust Sep-14 Spec Office Warehouse
North HardyToll Rd 19802 Imperial ValleyDr 328,020 0.0% Avera Companies Jan-14 Spec Warehouse/ Distribution
North Outer Loop 121 Esplanade 244,550 0.0% IDI Apr-14 Spec Office/Warehouse
East-Southeast Far 3750 Highway225 185,168 0.0% The Carson Companies Feb-14 Spec Distribution Warehouse
West Outer Loop 16257 Port NW - Bldg 6 171,850 0.0% Transwestern Jan-14 Spec Distribution Warehouse
North Fwy/Tomball Pky 11220 Ella Blvd 163,000 0.0% LibertyPropertyTrust Jan-14 Spec Office/Warehouse
North Outer Loop 13627 W HardyRd 151,339 100.0% TNRG Jan-14 BTS Office/Warehouse
South Hwy35 11951 Spectrum Blvd 150,000 100.0% Unknown Feb-14 BTS Dover Manufacturing
North HardyToll Road 525 CenturyPlaza Dr 149,760 100.0% Avera Companies Jan-14 PrimeSource leased building
South Hwy35 7232 Airport Blvd 137,297 100.0% Unknown Dec-14 BTS Powell Electrial Systems
Northwest Near Ind 7330 Langfield Rd 132,470 72.4% Avera Companies Jan-14 Spec Warehouse, Spears Manufacturing
North HardyToll Road 16501 Central Green Blvd 129,143 0.0% Verde Jan-14 Spec Office/Warehouse
North HardyToll Road 16507 Central Green Blvd 129,143 0.0% Verde Jan-14 Spec Office/Warehouse
Hwy59/Hwy90 (Alt) 13615 S Gessner Rd 123,300 0.0% Stream RealtyPartners, L.P. Mar-14 Spec Office/Warehouse
North Fwy/Tomball PkyInd 433 Plaza Verde Dr 120,159 0.0% Hines Jun-14 Spec Office/Warehouse
North Fwy/Tomball PkyInd 545 Plaza Verde Dr 120,159 0.0% Hines Apr-14 Spec Office/Warehouse
East-Southeast Far 3700 Highway225 118,500 0.0% The Carson Companies Feb-14 Spec Office/Warehouse
North Outer Loop Ind 71 Esplanade 106,700 0.0% IDI Mar-14 Spec Office/Warehouse
Hwy59/Hwy90 (Alt) 13721 S Gessner 85,500 55.5% Stream RealtyPartners, L.P. Jun-14 Spec Office/Warehouse
North Fwy/Tomball Pky 1050 Greens Pky 67,200 0.0% LibertyPropertyTrust Jan-14 Spec Office/Warehouse
Northwest Outliers 461 Stonegate Dr 63,382 100.0% ClayDevelopment Jan-14 Spec Office/Warehouse
East-Southeast Far 3800 Highway225 61,794 0.0% The Carson Companies Feb-14 Spec Crane-Served Office/Warehouse
Northwest Outliers Ind 22110 Merchants Way 51,868 0.0% InSite Apr-14 Spec Warehouse
Submarket Building Address RBA
%
Leased Developer Delivered Building Description
NorthwestOutliers 28501 US-90 Hwy 535,000 100.0% Panattoni Oct-13 BTS for Igloo
NorthwestOutliers 28900 US-90 Hwy 500,000 100.0% Panattoni Oct-13 BTS Weatherford Artificial LiftSystems
NorthwestOutliers 30602 Mcallister Rd 400,000 100.0% KDWLtd Nov-13 BTS Goya Food Processing
North HardyToll Rd Imperial ValleyDr @ FM1960 328,020 0.0% Avera Companies Dec-13 Spec Warehouse/Distribution
North HardyToll Rd 14700 North Fwy 267,170 100.0% DCTIndustrial Trust Nov-13 Spec Office/Warehouse,B&GFoods leased
North HardyToll Road 19245 Kenswick Dr 74,880 0.0% Trammell Crow Company Nov-13 Spec Office/Warehouse
NorthwestOutliers 22220 Merchants Way 67,743 100.0% InSite Commercial Real Estate Dec-13 Spec Office/Warehouse,Welltec leased
North HardyToll Road 19345 Kenswick Dr 58,370 0.0% Trammell Crow Company Nov-13 Spec Office/Warehouse
NorthwestOutliers 22330 Merchants Way 45,633 52.7% InSite Commercial Real Estate Dec-13 Spec Office/Warehouse
Hwy290/Tomball Pky 7337 Empire Central Dr 20,085 0.0% Boyd Commercial Nov-13 Spec Office/Warehouse
North HardyToll Rd 15370 Vantage PkyW 17,646 0.0% Northwinds Commercial Realty Oct-13 Spec Office/Warehouse
North HardyToll Rd 15380 Vantage PkyW 17,646 100.0% Northwinds Commercial Realty Oct-13 Spec Office/Warehouse.Metso Automation leased

5. RESEARCH & FORECAST REPORT | Q4 2013 | HOUSTON INDUSTRIAL MARKET
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LISA R. BRIDGES
Director of Market Research | Houston
Direct +1 713 830 2125
Fax +1 713 830 2118
lisa.bridges@colliers.com
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