LOW VACANCY AND RISING COSTS FORCE USERS TO LOOK FARTHER OUT

The overall vacancy rate continues to decline. Core submarkets such as Power Inn, Sunrise/Highway 50 and Northgate/Natomas are now below 5 percent for warehouse vacancy. Lease rates and list prices have jumped accordingly, and users are seeking space along the I-80 corridor where vacancy rates have been higher. McClellan Business Park has benefitted by signing several large leases this year. We also expect Roseville/Rocklin and Davis/Woodland to contribute to future absorption as these submarkets have the highest number of square feet of vacancy. As demand continues to exceed supply, developers see opportunity and have begun new spec projects since last quarter