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Q1 2012 | INDUSTRIALGREATER COLUMBUS REGIONINDUSTRIAL TRENDS REPORT                                                       ...
RESEARCH & FORECAST REPORT   |   Q1 2012  |  INDUSTRIAL   |   GREATER COLUMBUS REGION                        Delaware     ...
RESEARCH & FORECAST REPORT   |   Q1 2012  |  INDUSTRIAL   |   GREATER COLUMBUS REGIONUPDATE      Market ComparisonsINDUSTR...
RESEARCH & FORECAST REPORT   |   Q1 2012  |  INDUSTRIAL   |   GREATER COLUMBUS REGIONCENTRAL BUSINESS DISTRICT            ...
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Q1 2012 - Columbus Industrial

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Transcript of "Q1 2012 - Columbus Industrial"

  1. 1. Q1 2012 | INDUSTRIALGREATER COLUMBUS REGIONINDUSTRIAL TRENDS REPORT Strong Leasing Continues INDUSTRIAL MARKET OVERVIEW The first quarter continued the positive growth from 2011 with more than 1.2 million square feet of positive absorption. The first quarter 2012 vacancy rate of 10.9 percent is the lowest since the recession began in December 2007, when the fourth quarter 2007 vacancy rate was 10.4 percent. The majority of the largest leases occurred in the Southeast and Southwest submarkets. Innotrac took 434,000 square feet at 6360 Port Road and Shasta Beverage took 134,000 square feet at 4370 Alum Creek, both in the southeast. ALMO leased 134,000 square feet at 3750 Brookham Drive in theMARKET INDICATORS southwest submarket. Q4 Q1 FORECASTS AND REFLECTION 2011* 2012** • Therewere two investment sales this quarter. 3rd Avenue from Wasserstrom Ventures LLC. VACANCY Duke Realty purchased both Creekside XXII Tenants at the 135,000-square-foot facility ($22.2 million) and Creekside XIV ($16.7 include Imports Plus Automotive, Ohio Grinding NET ABSORPTION million) together as a portfolio. The & Mach Co, and Advance Sign Group. CONSTRUCTION 613,000-square-foot Creekside XIV is 86 • Target announced construction plans to expand percent occupied by Exel and Tire Kingdom. its food distribution center in West Jefferson by RENTAL RATES — — The 463,000-square-foot Creekside XXII is 438,000 square. When completed the facility 100 percent occupied by Genco. will employ an additional 100 to 150 workers. *Actual change from previous quarter • Nationwide Realty Trust purchased 862 West Construction will begin in second quarter 2012. **Projected change from previous quarter RENTAL RATES PROPERTY TYPE VACANCY RATES OVER COMPLETIONSWEIGHTED AVERAGE RENTAL RATES Asking rental rates were flatRates for the Major Product Types 17.0 2,500,000 for warehouse/distribution $72.5 $2.20 16.0 2,000,000 from last quarter, while R&D/ $2.15 Flex increased for the third2.0 $6 $2.10 15.0 1,500,000 quarter in a row since second $2.05 1.5 $5 14.0 1,000,000 quarter 2011. There are only $2.00 1.0 $1.95 30 spaces of 20,000 square 13.0 500,000 feet or greater in R&D/Flex, $4 $1.900.5 $1.85 12.0 0 mostly occurring in the 0 $3 $1.80 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q Q2 Q3 Q4 Q1 Southwest, Southeast, Union, 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q10 4Q10 11.0 08 08 09 09 09 09 10 10 10 10 11 11 11 11 12 (500,000) and West submarkets. This $2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 10.0 (1,000,000) will start to effect price soon 08 08 09 09 09 09 10 10 10 10 11 11 11 11 12 if leasing remains strong. The General Industrial R&D/Flex Warehouse/Dist. 9.0 (1,500,000) change in general asking 1 8.0 5 10 15 20 25 30 (2,000,000) rates over the past year has been negligible. Completions Absorptions Total Market Vacancy Ratewww.colliers.com/columbus
  2. 2. RESEARCH & FORECAST REPORT | Q1 2012 | INDUSTRIAL | GREATER COLUMBUS REGION Delaware REGIONAL INDUSTRIAL ECONOMICS with demand. Many manufacturers are reporting County Union The Federal Reserve Bank of Cleveland reports that they plan to increase outlays during the next County at least once a quarter in the Federal Reserve’s several months. North Beige Book about the economic activity of the LickingMadisonCounty County fourth district, which includes the Columbus Freight transport volume has been trending Metropolitan Statistical Area (MSA). The Beige higher during the past few weeks. The industries West East Book from February 2012 reported that industrial driving transport demand are energy and metals. CBD activity was up slightly or flat in the previous six Volume is expected to continue growing at a weeks. Manufacturers reported that new orders moderate pace for the remainder of the year. Southwest Southeast Fairfield and production at factories were generally stable County or moderately higher during the past six weeks. The Bureau of Labor Statistics reported Pickaway County Most manufacturers anticipated modest gains in manufacturing employment of 62,300 employees demand. Capacity utilization remained below in February which was an increase of 400The Columbus industrial market consists normal with little change expected in the near employees over January. Year over yearof 10 suburban submarkets and the manufacturing is down by 1.6 percent. Trade, term.Central Business District. The total transportation and utilities employment shrankinventory for the region is 213 millionsquare feet of space Freight transportation had been trending higher by 1,800 employees from January, with an during the previous six weeks, and during increase of 1.1 percent year over year. Mining, January it was above year-ago levels. Strong logging and construction decreased by 100 demand was seen in automotive, food, and shale employees from January and is up 7.2 percent gas producers. The expectation was for volume year over year. to grow at a moderate pace during 2012. TENANTS IN THE MARKET In April, the Beige Book reported that industrial The type of tenant seen most frequently in first activity grew at a modest pace since the February quarter were auto suppliers and/or parts report. Production at factories showed a small manufacturers, recycling companies, and increase during the past six weeks, and that for a e-commerce distributors. There are currently at majority of manufacturers output was above least 27 companies looking for 50,000 square year-ago levels. Capacity utilization has returned feet or greater in Columbus, and at least 28 to normal rates for the majority of those companies are looking for 15,000 to 50,000 contacted, while inventories were consistent square feet of space. MARKET ACTIVITY SALES ACTIVITY SALES PROPERTY ADDRESS DATE SALE PRICE SIZE SF GRANTOR GRANTEE PRICE / SF TYPE SUBMARKET 2120 Creekside Parkway Mar-12 22,216,796 613,312 Pizzuti Cos Duke Realty $36.22 Ware/Dist Southeast 4555 Creekside Parkway Mar-12 16,783,187 463,313 Pizzuti Cos Duke Realty $36.22 Ware/Dist Southeast 862 West 3rd Avenue Jan-12 6,599,700 135,242 Wasserstrom Ventures LLC Nationwide Realty Investors $48.80 Ware/Dist West 7304 Tussing Road Jan-12 3,175,000 67,725 Kittles Bloomington LLP VSI IV Reynoldsburg, LLC $46.88 Ware/Dist Fairfield 1239-1251 Alum Creek Drive Feb-12 900,000 56,000 Doyle Properties Inc Mazz Ltd $16.07 R&D/Flex Southeast 3987 E Main Street Jan-12 750,000 44,000 Prince Hall Grand Lodge Franklin Co. Commissioners $17.05 R&D/Flex East 200 Kintner Parkway Jan-12 1,200,000 26,914 The Commander Realty LLC Universal Composite LLC $44.59 General North Delaware LEASE ACTIVITY PROPERTY ADDRESS LEASE SF LESSOR LESSEE ASKING PRICE (NNN) TYPE SUBMARKET 6360 Port Road 434,120 Exeter 6360 Port LLC Innotrac $2.95 Warehouse - Distribution Southeast 3750 Brookham Drive 134,957 Prologis ALMO $3.50 Warehouse - Distribution Southwest 4370 Alum Creek Drive 134,400 Hackman Capital Shasta Beverage $2.25 Warehouse - Distribution Southeast 6000 Green Pointe Drive 126,000 CABOT Schwartz $3.25 Bulk Warehouse Southeast 456 McCormick Boulevard 48,915 Blackstone Cap & Associates $2.25 Warehouse - Distribution East 2297 Southwest Boulevard 40,026 Industrial Southpark Owner LLC Cinco $3.10 Flex/R&D SouthwestP. 2 | COLLIERS INTERNATIONAL
  3. 3. RESEARCH & FORECAST REPORT | Q1 2012 | INDUSTRIAL | GREATER COLUMBUS REGIONUPDATE Market ComparisonsINDUSTRIAL MARKET Net Absorption Construction Asking Rental RatesSUBMARKET Total SF Vacant SF Vacancy % Current Quarter Year-to-date Current Completions WH/Dist R&D/FlexCBD 5,706,725 699,829 12.3 (38,268) (38,268) - - $6.63EAST 20,682,243 4,151,888 20.1 87,026 87,026 - $2.83 $6.35FAIRFIELD 6,441,842 260,755 4.0 40,920 40,920 - $4.00 $6.90LICKING 18,832,930 893,989 4.7 109,000 109,000 773,000 - $2.76 -MADISON 8,148,397 - 0.0 - - - - -NORTH 16,817,138 1,298,006 7.7 56,082 56,082 - $2.71 $5.11NORTH DELAWARE 9,146,849 1,043,757 11.4 (15,750) (15,750) - $3.22 $6.75PICKAWAY 3,550,850 84,250 2.4 (12,350) (12,350) - $2.48 -SOUTHEAST 64,181,757 9,429,953 14.7 917,239 917,239 125,000 - $2.54 $3.06SOUTHWEST 17,683,127 1,163,023 6.6 128,833 128,833 - $2.99 $3.47UNION 6,333,817 363,905 5.7 (1,140) (1,140) - - $4.59WEST 35,893,270 3,873,510 10.8 9,256 9,256 - $2.25 $4.28TOTALS 213,418,945 23,262,865 10.9 1,280,848 1,280,848 898,000 - $2.59 $4.77 Net Absorption Construction Asking Rental RatesSUBMARKET Total SF Vacant SF Vacancy % Current Quarter Year-to-date Current Completions By Product TypeR&D/FLEX 20,280,125 2,813,464 13.9 315,796 315,796 - $4.77GENERAL INDUSTRIAL 71,640,726 5,497,749 7.7 95,690 95,690 658,000 - $3.93WAREHOUSE/ 121,498,094 14,951,652 12.3 869,362 869,362 240,000 - $2.59DISTRIBUTIONTOTALS 213,418,945 23,262,865 10.9 1,280,848 1,280,848 898,000 - $2.98QUARTERLY COMPARISON AND TOTALS Net Absorption Construction Asking Rental RatesQUARTER, YEAR Total SF Vacant SF Vacancy % Current Quarter Year-to-date Current Completions ($)Q4, 2011 213,215,134 24,525,213 11.5 391,728 3,478,819 968,000 175,000 $3.03Q3, 2011 213,040,134 24,916,941 11.7 1,018,991 3,087,091 1,073,000 1,800,000 $2.96Q2, 2011 211,235,134 25,935,932 12.3 2,430,463 2,068,100 1,910,000 - $2.80Q1, 2011 211,688,286 28,405,746 13.4 (362,363) (362,363) 1,910,000 - $2.92 CONSTRUCTION McGraw-Hill Construction’s most recent report showed residential and nonresidential future construction in the eight-county region combined fell by 10 percent to $115.3 million from January 2012. This is down from $127.9 million in February 2011. Regional nonresidential development, which was more than double residential development last year, fell by 40 percent to about $51.7 million in February. COLLIERS INTERNATIONAL | P. 3
  4. 4. RESEARCH & FORECAST REPORT | Q1 2012 | INDUSTRIAL | GREATER COLUMBUS REGIONCENTRAL BUSINESS DISTRICT Construction continues on Pizzuti’s 125,000-square-foot facility for MBM inThe Central Business District (CBD) lost 38,000square feet in negative absorption in the first Groveport at 2240 Creekside Parkway. 512 offices inquarter, due mostly to a vacancy at 1800 East SOUTH 61 countries on5th Avenue. Absorption was strong throughout2011, and there are fewer spaces available The southern submarkets are Pickaway and 6 continentsmeaning we will likely see a slow down in activity Fairfield counties. Fairfield gained 40,000 square feet due to leasing at 380 Quarry Road. United States: 125in this submarket. Only 15 percent of the spaces Canada: 38left are 5,000 square feet or greater. Pickaway lost a marginal 12,000 square feet. Latin America: 18 Asia Pacific: 214EAST SOUTHWEST EMEA: 117 The Southwest submarket showed absorption of • $1.5 billion in annual revenueThe submarkets comprising eastern Columbus 128,000 square feet, bringing the vacancy rateare East and Licking County. 111 Enterprise Drive • 978.6 million square feet under down to 6.6 percent. Large leases occurred atin Licking leased an additional 115,000 square management 3750 Brookham Drive, 1621 Harmon Avenue,feet bringing the Licking submarket net quarter • Over 12,500 professionals and 5150 Walcutt Court. 3350 Urbancrestabsorption to 119,000 square feet. Various leases Industrial Drive incurred a large vacancy.were executed in the East submarket bringing UNITED STATES:the total absorption to 87,000 square feet. WEST Columbus Richard B. Schuen SIOR CCIMConstruction in the East remains high but most The submarkets on the west side of Franklin CEO | Principal | Columbusprojects are set to close within the year. Quebec county are West, Madison and Union. Union 8800 Lyra DriveOntario-based KDC is expected to complete its county lost a marginal 1,100 square feet. The Suite # 150 west submarket had a lot of activity but ended Columbus, Ohio 43240240,000-square-foot building in spring 2012. with a marginal 9,200 square feet absorbed. 20 TEL +1 614 410 5612Mississauga, Canada-based Axium Plastics willcomplete a 110,000-square-foot facility in spring percent of the absorption changes occurred in2012, employing 165. Construction continues on the west, and none of them were over 35,000 Leslie HobbsPizzuti’s 303,000-square-foot speculative square feet. Madison had no activity. Marketing and Research Managerbuilding planned for spring 2012. Sonoco is 8800 Lyra Driveconstructing a 120,000-square-foot facility and MARKET INTEL Suite #150 Columbus, Ohio, 43240is also expected to be completed in 2012. Market Activity Volume is the sum of the TEL +1 614 410 5640 absolute value of each absorption change inNORTH the market. It tells us a little more about whatThe submarkets comprising northern Columbus exactly happened to the market behind the Jonathan Badgley absorption number. The Market Activity Volume Research Analystare North and North Delaware. The North gained 175 South Third Street56,000 square feet from numerous leases. was 2,183,000 square feet, meaning that Suite # 285North Delaware absorption was a negligible almost 80 percent of the activity this quarter Columbus, Ohio 4320115,000 square feet negative. was positive absorption. First quarter has a TEL +1 614 437 4495 seasonal adjustment of 24 percent, meaningSOUTHEAST that in a typical year the first quarter is about 25 percent more active than the rest of theThe Southeast submarket drove the market with year.the largest positive absorption of 917,000 square This document/email has been prepared by Colliersfeet, bringing the vacancy rate down to 14.7 International for advertising purposes. Colliers There are 52 buildings with vacant contiguous International statistics and data are audited annually andpercent. Warehouse/distribution prices remain space over 100,000 square feet left in the may result in revisions to previously reported quarterlythe lowest on average in the Columbus market. and final year-end figures. Sources include Columbus Columbus market. 14 were built since 2000 and Dispatch, Business First, Xceligent, and the Wall Street55 percent of the vacancies over 100,000 square 13 of those are warehouse/distribution. These Journal.feet are in the southeast and of buildings newer vacancies will keep warehouse/distributionthan 2000 the southeast is 85 percent of the asking rates low while they last.market. The low availability of R&D/Flex space overThere were no significant vacancies this quarter, 10,000 square feet is driving the continuedbut there were six absorptions over 30,000 increase in price. In buildings built since 2000,square feet. Innotrac leased 434,000 square feet there are only 14 buildings with vacant withat 6360 Port Road. contiguous space over 10,000 square feet. Accelerating success.www.colliers.com/columbus

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