INDUSTRIAL MARKET SURVEY RED DEER 2013

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1 WE VALUE WHAT YOU VALUE COMMERCIAL INDUSTRIAL AGRICULTURAL MULTI-FAMILY RESIDENTIAL SODERQUIST APPRAISALS LTD soderquist.ca RED DEER 405, Street Red Deer, AB T4N 6M4 Ph.: Fax: Prepared by: MIKE GARCELON, AACI, P.App., MRICS TYLER HANSEN, B.Comm., CAPM GORDON CHAN, BA

2 About The Study The industrial sector is a significant portion of the Red Deer economy and therefore the economic conditions in the industrial sector are reflective of the overall state and condition of Red Deer s economy. In developing this report we identified and studied fourteen industrial districts in and adjacent to the City of Red Deer. We did not include any government owned industrial properties because these are typically owner occupied and therefore do not compete in the open market. The occupancy status of each industrial property was determined by visual drive-by inspections in July The 2011 and 2012 data are based on visual drive-by inspections completed in July 2011 and July 2012, respectively. Previously reported July 2011 and July 2012 vacancy rates have been revised due to the identification of errors in building size data within the study area resulting is slightly different vacancy figures than previously reported. The revised July 2011 vacancy rate is 3.70%, previously reported at 3.57%. The revised July 2012 vacancy rate is 3.44%, previously reported at 3.33%. Qualification Readers of this report are welcome to use and reproduce the information contained herein, either in whole or in part, provided that Soderquist Appraisals Ltd is quoted as the reference source. This report is based on data obtained from sources believed to be reliable, however its accuracy cannot be guaranteed. makes no representations or warranties, express or implied, in this regard. All information contained in this report is provided as of the date of this report and is provided in good faith but without any legal responsibility of Soderquist Appraisals Ltd. in any way. Nothing in this report constitutes investment or other advice. Readers of this report are advised to conduct their own due diligence in this regard before making any investment decision. and its affiliates shall not be responsible for any liability whatsoever for any loss arising from any use of this report or the information contained herein. Soderquist Appraisals Ltd is a full service real estate appraisal and consulting firm providing valuation and consulting services on virtually every real estate property type. Located in Red Deer, Alberta we provide our services throughout western and northern Canada. For more information about Soderquist Appraisals Ltd please visit our web site at

3 Recognition acknowledges the assistance of Red Deer County, the City of Red Deer, Century 21 Advantage Commercial Real Estate, and Salomons Commercial in developing this study.

4 Red Deer Industrial Market The Red Deer Industrial Market includes fourteen (14) distinct industrial districts, plus one additional category for those stand-alone industrial properties outside of established industrial neighborhoods. Total Inventory (sq. ft.) 11,778,672 12,157,947 12,544, ,322 Vacant (sq. ft.) 435, , ,174-29,573 Vacancy Rate 3.70% 3.44% 3.10% -34 bps *Net Absorprtion (sq. ft.) n/a 396, ,895 19,717 *Net Absorption: Is the increase or decrease in the quantity of occupied space. The overall industrial vacancy rate is 3.10% as of July Since July 2012 the industrial vacancy rate has dropped 34 basis points from 3.44%. In July 2013 there was 389,174 sq. ft. of vacant industrial space, which is 7.06% less than July 2012 when there was 418,747 sq. ft. of vacant industrial space. Net Absorption for the 12 months ending July 2013 is 415,895 sq. ft District Inventory (sq. ft.) Vacant (sq. ft.) Vacancy Rate Vacancy Rate Vacancy Rate 52nd Avenue Industrial 294,472 4, % 1.97% 3.01% Belich Industrial Park 311,322 4, % 1.44% 1.39% Blindman Industrial Park 534, % 1.75% 3.76% Burnt Lake Industrial Park 1,257,913 57, % 4.54% 3.30% Chiles Industrial Park 291,905 9, % 12.94% 8.22% Clearview Industrial Park 589,191 2, % 1.16% 2.59% Edgar Industrial Park 2,643,640 17, % 1.70% 4.35% Golden West/Johnstone Ind. 1,613,508 71, % 3.53% 3.95% McKenzie Industrial Business Park 235,631 46, % n/a n/a Northlands Industrial Park 1,476,199 70, % 8.95% 5.50% Petrolia Business Park 283,872 34, % 3.23% 0.00% Piper Creek Business Park 33,390 10, % 46.84% n/a Riverside Heavy Industrial 1,208, % 0.14% 0.00% Riverside Light Industrial 917,145 59, % 4.35% 4.09% "Other" Industrial Parks 853, % 0.00% 5.02% TOTAL 12,544, , % 3.44% 3.70%

5 District Analysis 52 nd Avenue Industrial District The 52 nd Avenue Industrial district is situated northwest of the Gaetz (50 th ) Avenue / 67 th Street intersection. It is bounded on the west by the Glendale residential neighborhood, on the south by 67 th Street, on the east by the Gaetz (50 th ) Avenue commercial strip, and on the north by the Normandeau residential neighborhood. Some landmark developments include Quinn Pumps and United Valve. Total Inventory (sq. ft.) 290, , ,472 3,522 Vacant (sq. ft.) 8,770 5,738 4,490-1,248 Vacancy Rate 3.01% 1.97% 1.52% -45bps Belich Business Park The Belich Business Park is adjacent to the west boundary of the City of Red Deer, and is at the south west corner of the Highway 2 / Highway 11 interchange. It is bounded on the west and south by Red Deer County agricultural and country residential lands, on the east by Highway 2, and on the north by Highway 11. Some landmark developments include Victory Rig Equipment and Line-X Coatings. Total Inventory (sq. ft.) 311, , ,322 - Vacant (sq. ft.) 4,330 4,480 4,480 - Vacancy Rate 1.39% 1.44% 1.44% -

6 Blindman Industrial Park The Blindman Industrial Park is in Red Deer County and is situated adjacent to the north boundary of the City of Red Deer. It is bounded on the west by Highway 2A, on the south by the Chiles Industrial Park, and on the east and north by Red Deer County agricultural and country residential lands. Some landmark developments include Universal Handling Equipment and Leyen Enterprises Corp. Total Inventory (sq. ft.) 528, , ,466 5,882 Vacant (sq. ft.) 19,874 9, ,230 Vacancy Rate 3.76% 1.75% 0.00% -175bps Burnt Lake Business Park The Burnt Lake Business Park straddles the City of Red Deer and Red Deer County boundary, and is situated along the west side of Highway 2 near the north west corner of the City of Red Deer. It is bounded on the west by Red Deer County agricultural and country residential lands, on the south by Highway 11, on the east by Highway 2, and on the north by the Queens Business Park. Some landmark developments include Strongco and UFA. Total Inventory (sq. ft.) 1,144,343 1,257,913 1,257,913 - Vacant (sq. ft.) 37,735 57,165 57,165 - Vacancy Rate 3.30% 4.54% 4.54% -

7 Chiles Industrial Park The Chiles Industrial Park is situated on the north side of the City of Red Deer. It is bounded on the west by Highway 2A, on the south by the allowance for the future extension of Highway 11A, on the east by the Red Deer River, and on the north by the Blindman Industrial Park. Some landmark developments include Chiles Sandblasting and Stor-Mor Mini Warehousing. Total Inventory (sq. ft.) 291, , ,905 0 Vacant (sq. ft.) 23,994 37,760 9,608-28,152 Vacancy Rate 8.22% 12.94% 3.29% -964 bps Clearview Industrial Park The Clearview Industrial Park is situated adjacent to the south boundary of the City of Red Deer. It is bounded on the west by 40 th Avenue, on the south by the McKenzie Industrial Park, on the east by Red Deer County agricultural and country residential lands, and on the north by the City of Red Deer Waste Management Facility. Some landmark developments include In-Land Concrete and Peak Energy Services. Total Inventory (sq. ft.) 573, , ,191 0 Vacant (sq. ft.) 14,850 6,847 2,577-4,270 Vacancy Rate 2.59% 1.16% 0.44% -72 bps

8 Edgar Industrial Park The Edgar Industrial Park is situated toward the north west corner of the City of Red Deer. It is bounded on the west by Highway 2, on the south by 67 th Street, on the east by Johnstone Drive, and on the north by Highway 11A. Some landmark developments include Finning and Permolex. Total Inventory (sq. ft.) 2,539,829 2,539,829 2,643, ,811 Vacant (sq. ft.) 110,526 43,243 17,580-25,663 Vacancy Rate 4.35% 1.70% 0.66% -104 bps Golden West / Johnstone Industrial Park The Golden West / Johnstone Industrial Park is situated in the north west area of the City of Red Deer and straddles 67 th Street. It is bounded on the west by Johnstone Drive, on the south by the Oriole Park residential neighborhood, on the east by the Glendale residential neighborhood, and on the north by the Johnstone residential neighborhood. Some landmark developments include Border Paving and Bruins Plumbing. Total Inventory (sq. ft.) 1,480,011 1,613,508 1,613,508 0 Vacant (sq. ft.) 58,447 56,936 71,264 14,328 Vacancy Rate 3.95% 3.53% 4.42% 89 bps

9 McKenzie Industrial Business Park The McKenzie Industrial Business Park is situated in Red Deer County just south of the city and east of Gasoline Alley. It is bounded on the west by 40th Avenue, on the south by McKenzie Road, and on the north by Clearview Industrial Park. Some landmark developments include Schlumberger, and the Red Deer Shooting Club. Total Inventory (sq. ft.) n/a n/a 235,631 n/a Vacant (sq. ft.) n/a n/a 46,800 n/a Vacancy Rate n/a n/a 19.86% n/a Northlands Industrial Park The Northlands Industrial Park is situated towards the north side of the City of Red Deer. It is bounded on the west by the Gaetz (50 th ) Avenue commercial strip, on the south by the Pines residential neighborhood, on the east by Riverside Heavy industrial area, and on the north by the allowance for the future Highway 11A extension. Some landmark developments include Home Building Centre and Habitat For Humanity. Total Inventory (sq. ft.) 1,450,346 1,476,199 1,476,199 0 Vacant (sq. ft.) 79, ,126 70,734-61,392 Vacancy Rate 5.50% 8.95% 4.79% -416 bps

10 Petrolia Business Park The Petrolia Business Park is situated on the east side of the Gasoline Alley district, which is just south of the City of Red Deer. It is bounded on the west by the Highway 2 commercial corridor, on the south and east by the Red Deer County agricultural and country residential lands, and on the north by Spruce Street. Some landmark developments include BWS Fabrication Inc., and Fortis Alberta Inc. Total Inventory (sq. ft.) 246, , ,872 37,476 Vacant (sq. ft.) 0 7,957 34,576 26,619 Vacancy Rate 0.00% 3.23% 12.18% 895 bps Piper Creek Business Park The Piper Creek Business Park is situated on the east side of the Gasoline Alley district, which is just south of the City of Red Deer. It is bounded on the west by the Petrolia Business Park and the Highway 2 commercial corridor, on the east by Piper Creek, on the south by Red Deer County agricultural and country residential lands, and on the north by Spruce Street. Total Inventory (sq. ft.) n/a 33,390 33,390 0 Vacant (sq. ft.) n/a 15,640 10,040-5,600 Vacancy Rate n/a 46.84% 30.07% -1,677 bps

11 Riverside Heavy Industrial Park The Riverside Heavy Industrial Park is situated toward the north west corner of the City of Red Deer. It is bounded on the west by the Northlands Industrial Park, on the south by municipal environmental reserves, on the east by the Red Deer River, and on the north by the allowance for the future Highway 11A extension. Some landmark developments include Olymel and Quinn Pumps. Total Inventory (sq. ft.) 1,203,664 1,208,149 1,208,149 0 Vacant (sq. ft.) 0 1, ,696 Vacancy Rate 0.00% 0.14% 0.00% -14 bps Riverside Light Industrial Park The Riverside Light Industrial Park is centrally located within the City of Red Deer. It is bounded on the west and north by municipal environmental reserves, and on the south and east by the Red Deer River. Some landmark developments include Waste Management of Canada and Red Deer Co-op Home and Garden Centre. Total Inventory (sq. ft.) 917, , ,145 0 Vacant (sq. ft.) 37,496 39,929 59,860 19,931 Vacancy Rate 4.09% 4.35% 6.53% 217 bps

12 Other Industrial Areas This category includes those industrial developments and industrial zoned land which are outside of the established industrial neighborhoods. Some examples include Crimtech Services Ltd. in Gasoline Alley, and Key Agventures Inc. near the intersection of Highway 11 and Highway 2. Total Inventory (sq. ft.) 800, , ,466 - Vacant (sq. ft.) 40, Vacancy Rate 5.02% 0.00% 0.00% -