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Industrial q4 2011
 

Industrial q4 2011

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    Industrial q4 2011 Industrial q4 2011 Document Transcript

    • Q4 2011 | INDUSTRIALMETRO DETROIT & WASHTENAW MARKETRESEARCH REPORT Detroit Industrial Market Reports Fourth Consecutive Quarter of Vacancy Decrease MARKET OVERVIEW The Metro Detroit industrial market is comprised of 493.7 million square feet of industrial and R&D/flex space as of year-end 2011, making it the seventh largest industrial real estate market in the United States. In addition to being the traditional home of the American automotive industry, Detroit remains an important transportation hub for the region and also has significant industrial clusters for biomedical research and hi-tech manufacturing.MARKET INDICATORS Q4 2010 Q4 2011 At year-end 2011, industrial vacancy decreased from the previous quarter to 13.2%, of which the direct vacancy rate was 13.0%. The direct weighted average asking rental rate VACANCY decreased to $4.18 per square foot, per year Triple Net (NNN). With total industrial vacancy NET ABSORPTION decreasing for the fourth consecutive quarter since peaking at 14.8% at year-end 2010, expected vacancy decreases in 2012 may result in a flattening of direct average asking CONSTRUCTION rental rates. RENTAL RATEArrows compare current quarter to the previousyear quarters historically adjusted figures. 4,000,000 16.0% 3,000,000 15.5% 2,000,000 15.0% Million Square Feet 1,000,000 14.5% Vacancy (^) 0 14.0% -1,000,000 13.5% -2,000,000 -3,000,000 13.0% -4,000,000 12.5% -5,000,000 12.0% 4Q 1Q 2Q Q3 Q4 Q1 Q2 Q3 Q4 2009 2010 2010 2010 2010 2011 2011 2011 2011 Completions Absorption Vacancy Rate (%)www.colliers.com/detroit
    • RESEARCH REPORT | Q4 2011 | INDUSTRIAL | DETROIT INVENTORY geographic market sectors. Rates range as high as $12.02 per square foot in the Airport I-275Total industrial inventory in the Detroit market Total industrial inventory amounted to market to as low as $4.89 per square foot in thearea amounted to 493,731,685 square feet in 493,731,685 square feet in 9,823 buildings in the9,823 buildings in the fourth quarter 2011. Detroit submarket. Most of the rental rates range fourth quarter 2011. The flex sector consisted of from $7.00 to $9 per square foot; with the 41,614,041 square feet and the Warehouse/Fourth quarter reports a positive absorption average settling at $7.90 per square foot in the Distribution sector, accounting for the majority ofcompromised of 2,860,775 square feet, with overall market. This is the same as it was lastthe highest absorption this quarter found in industrial space, consisted of 452,117,644 square quarter.the Livonia I-275 submarket. feet. Asking warehouse/distribution rates are RENTAL RATES averaging $3.83 per square foot. Effective rental This quarter the average overall asking rental rates are usually up to 20% less than asking rate slightly decreased $0.03 and currently rates, due to concessions and face rate reductions stands at $4.18 per square foot. used as incentives for tenants to commit to a lease. R &D and flex rates are double that of warehouse & distribution in almost all submarkets and continued on page 4 continue to fluctuate significantly among the SIGNIFICANT LEASE AND SALE ACTIVITY SALES ACTIVITY PROPERTY ADDRESS CITY SALE DATE SALE PRICE SIZE SF PRICE PER SF 7261 Commerce Blvd Canton 11/22/2011 2,800,000 115,525 24.24 17500 23 Mile Rd Macomb Township 12/29/2011 2,200,000 309,922 7.10 48400 West Rd Wixom 12/22/2011 1,862,000 34,200 54.44 101 Premier Dr Orion Township 12/22/2011 1,800,000 42,343 42.51 1421 Piedmont Dr Troy 10/31/2011 1,600,000 34,131 46.88 1700 Harmon Rd Auburn Hills 10/11/2011 1,500,000 24,027 62.43 8225 Jackson Rd Ann Arbor 12/14/2011 1,474,000 39,157 37.64 38777 Schoolcraft Rd Livonia 11/1/2011 1,186,190 53,512 22.17 16730 Enterprise Macomb Township 11/14/2011 1,120,000 27,080 41.36 44850 Centre Ct E Clinton Township 11/4/2011 1,100,000 29,345 37.49 14105 Rocco Ct Shelby Township 12/16/2011 1,040,000 24,573 42.32 26980 Trolley Industrial Dr Taylor 9/30/2011 1,000,000 102,400 9.77 5055 Hannan Rd Wayne 10/27/2011 862,500 15,000 57.50 18673 Dix Toledo Brownstown Township 11/3/2011 840,000 11,800 71.19 2212 Grand Commerce Dr Howell Township 11/15/2011 820,000 24,000 34.17 26532 Groesbeck Hwy Warren 10/31/2011 800,000 33,181 24.11 28025 Oakland Oaks Ct Wixom 9/30/2011 725,000 32,500 22.31 LEASE ACTIVITY PROPERTY ADDRESS SUBMARKET TENANT SIZE SF 24450 Glendale Ave Dearborn Chrysler 393,940 19661 Brownstown Center Dr Downriver C*MAC Transportation LLC 109,474 36310 Eureka Rd Airport World Tek Industries 103,994 31293-31301 Mally Dr Troy NA 53,150P. 2 | COLLIERS INTERNATIONAL
    • RESEARCH REPORT | Q4 2011 | INDUSTRIAL | DETROIT TOTAL DIRECT VACANT SUBLEASE VACANT TOTAL VACANT Net Absorption COMPLETIONS SF UNDER WEIGHTED TYPE BLDGS INVENTORY SF SF RATE SF RATE SF RATE 4th QTR YTD CURRENT YTD SF CONSTRUCT PLANNED AVG RENTALDETROIT AREA: DETROIT RATE W/D 1102 87,828,114 18,561,890 21.1% 661,681 0.8% 19,223,571 21.9% 256,813 1,294,964 - - - $2.65 Flex 36 1,863,258 296,336 15.9% 0 0.0% 296,336 15.9% - -7,686 - - - - $4.89 Total 1138 89,691,372 18,858,226 21.0% 661,681 0.7% 19,519,907 21.8% 256,813 1,287,278 - - - - $2.70 DOWNRIVER W/D 400 39,995,009 3,700,064 9.3% 6,000 0.0% 3,706,064 9.3% 14,020 525,931 - - - 45,500 $3.78 Flex 10 1,117,177 222,139 19.9% 0 0.0% 222,139 19.9% 0 - - - - $7.00 Total 410 41,112,186 3,922,203 9.5% 6,000 0.0% 3,928,203 9.6% 14,020 525,931 - - - - $3.87 DEARBORN W/D 231 12,268,469 1,815,975 14.8% 0 0.0% 1,815,975 14.8% 16,300 168,527 - - - - $3.34 Flex 53 2,724,872 722,661 26.5% 39,114 1.4% 761,775 28.0% 200,077 390,502 - - - - $6.88 Total 284 14,993,341 2,538,636 16.9% 39,114 0.3% 2,577,750 17.2% 216,377 559,029 - - - - $3.98I-275 CORRIDOR: AIRPORT W/D 655 38,126,771 5,994,506 15.7% 24,800 0.1% 6,019,306 15.8% 212,611 591,552 - - - 1,433,645 $3.80 Flex 22 1,623,220 10,792 0.7% 0 0.0% 10,792 0.7% 53,136 52,311 - - - $12.02 Total 677 39,749,991 6,005,298 15.1% 24,800 0.1% 6,030,098 15.2% 265,747 643,863 - - - 1,433,645 $4.14 SOUTHERN I-275 W/D 333 16,729,206 1,641,630 9.8% 0 0.0% 1,641,630 9.8% 163,449 664,393 - - - 583,266 $3.78 Flex 28 1,029,200 125,488 12.2% 0 0.0% 125,488 12.2% 4,600 26,392 - - - - $8.27 Total 361 17,758,406 1,767,118 10.0% 0 0.0% 1,767,118 10.0% 168,049 690,785 - - - 583,266 $4.04 LIVONIA W/D 726 36,299,788 2,788,841 7.7% 0 0.0% 2,788,841 7.7% 521,078 547,075 - - - 1,060,289 $3.93 Flex 84 3,948,005 522,217 13.2% 0 0.0% 522,217 13.2% 53,136 129,478 - - - 80,000 $6.85 Total 810 40,247,793 3,311,058 8.2% 0 0.0% 3,311,058 8.2% 574,214 676,553 - - - 1,140,289 $4.22EAST: I-75 CORRIDOR W/D 676 45,288,403 4,591,366 10.1% 4,096 0.0% 4,595,462 10.1% 288,889 694,686 - - - 745,993 $4.48 Flex 107 5,463,218 695,178 12.7% 32,303 0.6% 727,481 13.3% 84,075 199,874 - - - 114,036 $6.81 Total 783 50,751,621 5,286,544 10.4% 36,399 0.1% 5,322,943 10.5% 372,964 894,560 - - - 860,029 $4.73 MACOMB W/D 1655 55,487,823 4,785,405 8.6% 163,656 0.3% 4,949,061 8.9% 317,451 921,553 - - - 2,523,123 $3.48 Flex 42 1,212,337 196,942 16.2% 0 0.0% 196,942 16.2% 14,486 47,096 - - - - $5.95 Total 1697 56,700,160 4,982,347 8.8% 163,656 0.3% 5,146,003 9.1% 331,937 968,649 - - - 2,523,123 $3.53 ROYAL OAK W/D 376 10,887,841 899,406 8.3% 0 0.0% 899,406 8.3% (1,075) 165,015 - - - 962,568 $3.33 Flex 24 810,389 97,966 12.1% 0 0.0% 97,966 12.1% 3,954 41,748 - - - $7.57 Total 400 11,698,230 997,372 8.5% 0 0.0% 997,372 8.5% 2,879 206,763 - - - 962,568 $3.62 TROY W/D 865 25,251,498 2,386,528 9.5% 9,520 0.0% 2,396,048 9.5% 405,232 919,329 - - - - $4.21 Flex 122 4,533,423 637,618 14.1% 19,871 0.4% 657,489 14.5% 69,459 70,850 - - - 170,000 $6.50 Total 987 29,784,921 3,024,146 10.2% 29,391 0.1% 3,053,537 10.3% 474,691 990,179 - - - 170,000 $4.56WEST: CENTRAL I-96 W/D 669 28,665,712 1,849,795 6.5% 5,000 0.0% 1,854,795 6.5% 125,415 893,550 - 53,000 - 1,058,071 $4.85 Flex 137 4,564,839 915,971 20.1% 44,685 1.0% 960,656 21.0% 2,558 91,536 - - 462,642 $8.17 Total 806 33,230,551 2,765,766 8.3% 49,685 0.1% 2,815,451 8.5% 127,973 985,086 - 53,000 - 1,520,713 $5.31 FARM HILLS W/D 227 7,929,848 651,163 8.2% 6,000 0.1% 657,163 8.3% 47,480 55,621 - - - - $4.81 Flex 82 2,892,591 499,272 17.3% 0 0.0% 499,272 17.3% (7,756) 91,915 - - - - $7.46 Total 309 10,822,439 1,150,435 10.6% 6,000 0.1% 1,156,435 10.7% 39,724 147,536 - - - $5.52 HOWELL/BRIGHTON W/D 343 13,428,193 870,299 6.5% 14,800 0.1% 885,099 6.6% (8,619) 92,394 - - - 96,534 $5.58 Flex 28 625,527 75,968 12.1% 0 0.0% 75,968 12.1% 2,845 55,010 - - - - $8.80 Total 371 14,053,720 946,267 6.7% 14,800 0.1% 961,067 6.8% (5,774) 147,404 - - - 96,534 $5.72 SOUTHFIELD W/D 115 3,839,572 187,106 4.9% 0 0.0% 187,106 4.9% 2,000 -9,755 - - - - $4.00 Flex 43 1,887,680 710,488 37.6% 3,150 0.2% 713,638 37.8% (13,988) -37,753 - - - 60,000 $10.47 Total 158 5,727,252 897,594 15.7% 3,150 0.1% 900,744 15.7% (11,988) -47,508 - - - 60,000 $6.13WASHTENAW COUNTY: W/D 499 30,091,397 7,123,705 23.7% 45,565 0.2% 7,169,270 23.8% 22,691 424,318 - - - - $5.04 Flex 133 7,318,305 474,721 6.5% 0 0.0% 474,721 6.5% 10,458 62,741 - - - 78,274 $10.09 Total 632 37,409,702 7,598,426 20.3% 45,565 0.1% 7,643,991 20.4% 33,149 487,059 - - - 78,274 $6.03ALL MARKET TOTALS: W/D 8,872 452,117,644 57,847,679 12.8% 941,118 0.2% 58,788,797 13.0% 2,383,735 7,949,153 - 53,000 0 10,286,119 $3.83 Flex 951 41,614,041 6,203,757 14.9% 139,123 0.3% 6,342,880 15.2% 477,040 1,214,014 - 0 0 964,952 $7.90 Total 9,823 493,731,685 64,051,436 13.0% 1,080,241 0.2% 65,131,677 13.2% 2,860,775 9,163,167 - 53,000 0 11,251,071 $4.18QUARTERLY COMPARISON AND TOTALS Q4-11 9,823 493,731,685 64,051,436 13.0% 1,080,241 0.2% 65,131,677 13.2% 2,860,775 9,163,167 - 53,000 0 11,251,071 $4.18 Q3-11 9,862 493,998,172 65,249,224 13.2% 1,331,603 0.3% 66,580,827 13.5% 6,302,392 - 53,000 0 11,339,965 $4.21 Q2-11 9,796 486,312,287 66,232,342 13.6% 1,592,600 0.3% 67,824,942 13.9% 4,463,190 - 53,000 0 9,631,013 $4.24 Q1-11 9,679 485,070,813 68,111,041 14.0% 1,306,033 0.3% 70,058,074 14.4% 2,342,972 53,000 53,000 0 9,443,565 $4.27 Q4-10 9,573 480,579,732 71,040,317 14.8% 2,250,616 0.5% 73,931,933 15.4% -3,895,168 240,000 300,523 0 9,271,429 $4.33 Q3-10 9,487 469,785,434 66,221,100 14.1% 2,466,808 0.5% 69,368,292 14.8% -209,793 21,000 60,523 240,000 9,832,769 $4.35 Q2-10 9,456 465,259,376 64,343,953 13.8% 2,515,016 0.5% 67,520,969 14.5% 120,011 21,000 60,523 250,127 10,219,875 $4.37 Q1-10 9,419 463,944,034 65,441,898 14.1% 2,408,261 0.5% 68,512,159 14.8% -959,150 39,523 39,523 10,127 9,201,771 $4.44 Q4-09 9,395 461,158,849 63,100,091 13.7% 2,353,794 0.5% 66,115,885 14.3% -5,433,274 45,000 289,514 25,996 9,887,898 $4.52 COLLIERS INTERNATIONAL | P. 3
    • RESEARCH REPORT | Q4 2011 | INDUSTRIAL | DETROITCONSTRUCTIONAs of year end 2011 no projects were reported 512 offices inunder construction but 11,251,071 square feet isproposed. 61 countries onABSORPTION/LEASING ACTIVITY 6 continentsThe net absorption in the fourth quarter of 2011 United States: 125 Canada: 38for the Metro Detroit market is compromised of Latin America: 182,860,775 square feet, with the highest absorption Asia Pacific: 214found in the Livonia submarket. EMEA: 117 • $1.5 billion in annual revenueSALE ACTIVITY million square feet under • 978.6 managementTotal year-to-date industrial building sales activityin 2011 is up compared to the previous year. In the • Over 12,500 professionalsfirst nine months of 2011, the market saw 108industrial sales transactions with a total volume of COLLIERS INTERNATIONAL | DETROITover 167 million dollars. The price per square foothas averaged $16 this year. In the first nine months 2 Corporate Driveof 2010, the market posted 106 transactions with Suite 300a total volume of over 165 million dollars. The Southfield, Michigan 48076price per square foot averaged $15. TEL +1 248 540 1000 FAX +1 248 540 1038LOCALLYOne of the largest transactions that has occurredmost recently in the Detroit market is the sale of7261 Commerce Blvd. in Canton. The 115,525 MANAGING DIRECTOR:square foot industrial building sold for 2.8 million Paul Choukourian, CCIM, RPAdollars or $24 per square foot. The property sold Managing Director | Detroit | Ann ArborNovember of 2011. TEL +1 248 226 1622 FAX +1 248 226 1623On a local level, sales are averaging approximately$30-$40 per square foot. Capitalization rates in RESEARCH DEPARTMENT:2011 have been higher compared to 2010 and are Michelle McGuckinaveraging around 10.5%. Research Coordinator | Detroit | Ann Arbor TEL +1 248 226 1848 FAX +1 248 226 1849 Copyright © 2011 Colliers International. Source material and statistical information, unless otherwise noted, is provide by The CoStar Group, Real Capital Analytics, REIS, Bureau of Labor Statistics, and Colliers-Detroit Research Department. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report. Accelerating success.www.colliers.com/marketname