King Industrial Realty Atlanta Industrial Market Second Quarter 2003

The Atlanta Industrial Market PinPoint sm TechnologyPinPoint sm Technology –12 market areas –13,064 users –8,094 buildings –427 million sq. ft. of distribution PinPoint sm TechnologyPinPoint sm Technology –12 market areas –13,064 users –8,094 buildings –427 million sq. ft. of distribution

Behind KIR Team Twenty three years PinPoint Database –Custom designed –Inventory every quarter –Shared information by everyone Atlanta’s industrial experts –2,852 deals since 1995 –41.1 million sq. ft. of Lease and Sales –3,200 acres of land Twenty three years PinPoint Database –Custom designed –Inventory every quarter –Shared information by everyone Atlanta’s industrial experts –2,852 deals since 1995 –41.1 million sq. ft. of Lease and Sales –3,200 acres of land

Defining Terms Availability –Vacant or available space Activity –Square feet of signed leases Net Absorption –Net results of activity (calculated by spaces vacated and spaces leased) Deals –Actual number of transactions Availability –Vacant or available space Activity –Square feet of signed leases Net Absorption –Net results of activity (calculated by spaces vacated and spaces leased) Deals –Actual number of transactions

Market Inventory: Total Inventory 13.0% 18.9% Vacancy In Millions

Numbers total 4 quarters to end of current quarter Absorption and Activity Activity Absorption In Millions

Total Used Space New Space New/Used Space Availability

Numbers total 4 quarters to end of current quarter New Construction: New Construction Build-to-Suit In Millions

Buildings with New Space

Deals Completed Under 19,999 SF 20, ,999 SF 40, ,999 SF 60, ,999 SF 80, ,999 SF 100,000 & Up Numbers total 4 quarters to end of current quarter

Square Feet Leased Under 19,999 SF 20, ,999 SF 40, ,999 SF 60, ,999 SF 80, ,999 SF 100,000 & Up Numbers total 4 quarters to end of current quarter

Distribution Hot Markets Absorption 66.7%66.7% 3.7%3.7% 26.5%26.5% Percentage of the market's positive net absorption Numbers total 4 quarters to end of current quarter

Distribution Hot Markets Absorption 26.5%26.5% 3.7%3.7% 66.7%66.7% Activity 19.6%19.6% 14.1%14.1% 14.6%14.6% Numbers total 4 quarters to end of current quarter

Distribution Hot Markets Absorption 66.7%66.7% 26.5%26.5% 3.7%3.7% Activity 19.6%19.6% 14.1%14.1% 14.6%14.6% Available Used 19.0%19.0% 11.7%11.7% 19.1%19.1%

Distribution Hot Markets Absorption 26.5%26.5% 3.7%3.7% 66.7% 66.7% Activity 19.6% 19.6% 14.1%14.1% 14.6%14.6% Available Used 19.0%19.0% 19.1%19.1% 11.7%11.7% 17.9% Available New 27.2% 19.5%

Future - Industrial Real Estate Infrastructure Trends to keep us on top: - Trucking deregulation - Railroad consolidation - Population Infrastructure Trends to keep us on top: - Trucking deregulation - Railroad consolidation - Population

S.E. Distribution Centers AtlantaAtlanta BirminghamBirmingham CharlotteCharlotte MiamiMiami MemphisMemphis NashvilleNashville JacksonvilleJacksonville TampaTampa AtlantaAtlanta BirminghamBirmingham CharlotteCharlotte MiamiMiami MemphisMemphis NashvilleNashville JacksonvilleJacksonville TampaTampa (million sq. ft.) Source: SIOR Comparative Statistics, 2001/2002

TransportationTransportation By Sea: 50 carriers/160 companies By Rail:5,200 miles of rail By Road:2,285 miles of interstate By Air:27 air cargo carriers With Data:14 fiber optic networks By Sea: 50 carriers/160 companies By Rail:5,200 miles of rail By Road:2,285 miles of interstate By Air:27 air cargo carriers With Data:14 fiber optic networks

Trucking Deregulation Number of Trucking Companies - from 10,000 to 450,000 Driver Shortage Maximum Distance = 400 miles 3rd Party Logistics Fulfillment Centers Number of Trucking Companies - from 10,000 to 450,000 Driver Shortage Maximum Distance = 400 miles 3rd Party Logistics Fulfillment Centers

Railroad Consolidation # Class 1 Railroads –36 in 1980 –4 in 2000 (2 in Canada) Intermodal yards: –Austell, GA –Harrisburg, PA –Chicago, IL Selling Time Not Cost # Class 1 Railroads –36 in 1980 –4 in 2000 (2 in Canada) Intermodal yards: –Austell, GA –Harrisburg, PA –Chicago, IL Selling Time Not Cost

Atlanta: Center of Distribution Source: U. S. Census Under 1 Million 1- 5 Million 5-10 Million Million 21 Million & Up Under 1 Million 1- 5 Million 5-10 Million Million 21 Million & Up Population Atlanta

Regional Distribution Centers Source: U. S. Census Under 1 Million 1- 5 Million 5-10 Million Million 21 Million & Up Under 1 Million 1- 5 Million 5-10 Million Million 21 Million & Up Atlanta E. Pennsylvania Population

Regional Distribution Centers Source: U. S. Census Under 1 Million 1- 5 Million 5-10 Million Million 21 Million & Up Under 1 Million 1- 5 Million 5-10 Million Million 21 Million & Up Atlanta Chicago E. Pennsylvania Population

Regional Distribution Centers Source: U. S. Census Under 1 Million 1- 5 Million 5-10 Million Million 21 Million & Up Under 1 Million 1- 5 Million 5-10 Million Million 21 Million & Up Atlanta Dallas Chicago E. Pennsylvania Population

Regional Distribution Centers Source: U. S. Census Under 1 Million 1- 5 Million 5-10 Million Million 21 Million & Up Under 1 Million 1- 5 Million 5-10 Million Million 21 Million & Up Atlanta Dallas Los Angeles Chicago E. Pennsylvania Population

ConclusionConclusion Transportation infrastructure Largest industrial inventory in southeast –427,000,000 sq. ft. Trends - Trucking deregulation - Railroad consolidation - Population Transportation infrastructure Largest industrial inventory in southeast –427,000,000 sq. ft. Trends - Trucking deregulation - Railroad consolidation - Population

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