Q2 2012 | INDUSTRIALGREATER COLUMBUS REGIONINDUSTRIAL TRENDS REPORT                                                       ...
RESEARCH & FORECAST REPORT   |   Q2 2012  |  INDUSTRIAL   |   GREATER COLUMBUS REGION                        Delaware     ...
RESEARCH & FORECAST REPORT   |   Q2 2012  |  INDUSTRIAL   |   GREATER COLUMBUS REGIONUPDATE      Market ComparisonsINDUSTR...
RESEARCH & FORECAST REPORT   |   Q2 2012  |  INDUSTRIAL   |   GREATER COLUMBUS REGIONCENTRAL BUSINESS DISTRICT            ...
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Q22012 Columbus Industrial Market Trends

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Q22012 Columbus Industrial Market Trends

  1. 1. Q2 2012 | INDUSTRIALGREATER COLUMBUS REGIONINDUSTRIAL TRENDS REPORT Leasing and Construction Continue INDUSTRIAL MARKET OVERVIEW The Columbus industrial market recorded its fifth consecutive quarter of strong positive absorption. More than 1.4 million square feet were absorbed this quarter. More than 750,000 square feet of construction projects were completed, while another 425,000 square feet of construction began. Major leases were signed by Jacobson Warehouse at 2450 Spiegel Drive for more than 455,000 square feet and Closed Loop Refining & Recovery leasing at 1675 Wakins Road for 289,000 square feet.MARKET INDICATORS Q2 Q3 2012* 2012** FORECASTS AND REFLECTION VACANCY • Blackstone purchased a 65 property portfolio 227,480-square-foot 4401-4419 Equity Drive from DEXUS Property Group which included were sold together in the same portfolio sale NET ABSORPTION six properties in the Columbus MSA. The for $19.6 million. The 156,641-square-foot CONSTRUCTION — former 1,628,640-square-foot Whirlpool 2626 Port Road was sold for $2.3 million in Warehouse at 6241 Shook Road in Lockbourne, this sale as well. RENTAL RATES — — Ohio sold for $57.7 million. The 116,000-square- • Target began construction to expand its food *Actual change from previous quarter foot 4343 Equity Drive, 144,850-square-foot distribution center in West Jefferson by 1901-1919 Dividend Drive, 227,480-square-foot 425,000 square feet. When completed, the **Projected change from previous quarter 1614-1634 Westbelt Drive, and the facility will employ an additional 100 to 150 RENTAL RATES PROPERTY TYPE VACANCY RATES OVER COMPLETIONSWEIGHTED AVERAGE RENTAL RATES Asking rental rates haveRates for the Major Product Types $7.00 17.0 2,500,000 generally been stable. Build- $6.002.5 $2.20 16.0 2,000,000 to-suit construction has $5.00 $2.15 added more than 2.2 million2.0 $4.00 $2.10 15.0 1,500,000 square feet of space to the $3.00 $2.05 1.5 14.0 1,000,000 market since third quarter $2.00 $2.00 1.0 $1.95 2011. There are only 30 $1.00 13.0 500,000 spaces of 20,000 square feet$0.00 $1.900.5 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 $1.85 Q2 Q1 12.0 0 or greater in R&D/Flex, 0 08 08 09 09 09 09 10 10 10 10 11 11 11 11 $1.80 12 12 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q Q2 Q3 Q4 Q1 Q2 mostly occurring in the 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q10 4Q10 General Industrial R&D/Flex Warehouse/Dist. 11.0 08 08 09 09 09 09 10 10 10 10 11 11 11 11 12 12 (500,000) Southwest, Southeast, Union, 10.0 (1,000,000) and West submarkets. This will start to affect price soon 9.0 (1,500,000) if leasing remains strong. The 1 8.0 5 10 15 20 25 30 (2,000,000) change in general asking rates over the past year has Completions Absorptions Total Market Vacancy Rate been negligible.www.colliers.com/columbus
  2. 2. RESEARCH & FORECAST REPORT | Q2 2012 | INDUSTRIAL | GREATER COLUMBUS REGION Delaware REGIONAL INDUSTRIAL ECONOMICS housing. Financing has become more readily County Union The Federal Reserve Bank of Cleveland reports available, except for speculative projects. County at least once a quarter in the Federal Reserve’s North Beige Book about the economic activity of the Freight volume was flat or moved slightly slower LickingMadisonCounty County fourth district, which includes the Columbus during May. Sectors driving demand included Metropolitan Statistical Area (MSA). In June, the energy and transportation as well as seasonal West East Beige Book reported that economic activity had products. The outlook for the remainder of 2012 CBD grown at a moderate pace. Manufacturers remains positive, but most do not expect growth reported that production was stable. Capacity will be as strong as predicted earlier in the year. Southwest Southeast Fairfield utilization was flat as was new orders. County EMPLOYMENT Pickaway County Freight transport volume had moved higher. The The Bureau of Labor Statistics reported industries driving transport demand are energy manufacturing employment of 61,500 employeesThe Columbus industrial market consists and metals. Volume is expected to continue in May which was an decrease of 1,400of 10 suburban submarkets and the growing at a moderate pace for the remainder of employees since January 2012. Year over yearCentral Business District. The totalinventory for the region is 213 million the year. manufacturing is down by 4.4 percent. Trade,square feet of space. transportation and utilities employment grew by The Beige Book from July 2012 reported that 4,200 employees in May since January 2012, economic activity continued to expand since the with 2.7 percent year over year employment. April 2012 report. Manufacturers reported a Mining, logging and construction decreased by slight rise in production. Nonresidential builders 1,100 employees in May from January 2012 but saw stronger inquiries, especially from education, is down 2.4 percent year over year. healthcare, manufacturing, and multi-family MARKET ACTIVITY SALES ACTIVITY PROPERTY ADDRESS SALES DATE SALE PRICE SIZE SF GRANTOR GRANTEE PRICE / SF TYPE SUBMARKET 6241 Shook Road 06/27/2012 $57,700,000.00 1,628,640 D/P Rickenbacker LLC BRE/DP Columbus LLC $35.43 Warehouse Southeast 4343 Equity Drive 6/27/2012 $19,600.000.00 116,000 RPH Industrial LLC BRE/DP OH LLC - Flex/R&D West for Porfolio 1901-1919 Dividend Drive 6/27/2012 Portfolio 144,850 RPH Industrial LLC BRE/DP OH LLC - Freezer/Cooler West 4401-4419 Equity Drive 6/27/2012 Portfolio 227,480 RPH Industrial LLC BRE/DP OH LLC - Warehouse West 1614-1634 Westbelt Drive 6/27/2012 Portfolio 227,480 RPH Industrial LLC BRE/DP OH LLC - Warehouse West 2626 Port Road 6/27/2012 $2,300.000.00 156,641 RPH Industrial LLC BRE/DP OH LLC - Warehouse Southeast 2001 Courtright Road 4/2/2012 $800,000.00 225,873 Tomasco Mulciber Inc. All A Cart Manufacturing - General Southeast 521 Marion Road 6/14/2012 $650,000.00 202,402 Marion Road Partners LLC 521 Marion Road LLC $3.21 Warehouse Southeast 777 James Road 5/31/2012 $3,100,000.00 137,885 Pennsylvania Railroad Co. HGI Ohio LLC $22.48 Bulk Warehouse East 8303 Green Meadows Drive 5/3/2012 $2,066,460.00 78,400 Charles Manofsky, Receiver Xigent8303 $26.36 Light Industrial North 8333 Green Meadows Drive 4/30/2012 $1,549,846.00 78,400 Green Meadow SWS LLC Developers Seven LLC $19.77 Light Industrial North 1625 Mound Street 6/7/2012 $1,400,000.00 70,910 Mid Ohio Food Bank 590 Van Buren LLC $19.74 Freezer/Cooler Southwest 1515 Universal Road 4/2/2012 $1,600,000.00 68,334 Metal Improvement Co Inc Bodycote Thermal Inc $23.41 Light Industrial Southeast 6951 Alan Schwartzwalder 5/17/2012 $1,695,000.00 60,000 MJR Enterprises INC All State Investments LC $28.25 Warehouse Southeast LEASE ACTIVITY PROPERTY ADDRESS LEASE DATE LEASE SF LESSEE ASKING PRICE (NNN) TYPE SUBMARKET 2450 Spiegel Drive 5/31/2012 455,667 Jacobson Warehouse - Warehouse - Distribution Southeast 1675 Watkins Road 5/10/2012 289,624 Closed Loop Refining & $1.95 Warehouse - Distribution Southeast Recovery Inc 3500 Centerpoint Drive 6/25/2012 248,145 Confidential $3.25 Bulk Warehouse Southwest 5830 Green Pointe Drive 4/19/2012 194,989 Buckeye Diamond Logistics $1.00 Warehouse - Distribution Southeast 2425 Spiegel Drive 5/1/2012 135,000 NIFCO American Corporation $2.25 Warehouse - Distribution Southeast 6295 Commerce Center Drive 6/14/2012 87,000 PDSI $3.25 Warehouse - Distribution Southeast 6766 Pontius Road 6/25/2012 74,000 Confidential $3.15 Warehouse - Distribution SoutheastP. 2 | COLLIERS INTERNATIONAL
  3. 3. RESEARCH & FORECAST REPORT | Q2 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 5,507,707 756,472 13.7 (56,643) (94,911) - - - $6.63EAST 20,682,243 3,986,693 19.3 177,830 277,795 - - $2.90 $5.83FAIRFIELD 6,441,842 126,755 2.0 134,000 174,920 - - $4.00 $6.90LICKING 19,607,493 893,989 4.6 - 109,000 - 774,563 $2.97 -MADISON 8,148,397 - 0.0 - - 425,000 - - -NORTH 16,569,909 1,236,806 7.5 98,305 154,387 - - $2.73 $4.68NORTH DELAWARE 9,146,849 988,399 10.8 55,358 39,608 - - $3.10 $7.10PICKAWAY 3,550,850 84,250 2.4 (10,400) (22,750) - - $2.95 -SOUTHEAST 64,127,997 7,882,685 12.3 1,136,227 2,022,366 - 125,000 $2.61 $3.47SOUTHWEST 17,669,037 1,100,255 6.2 63,200 192,033 - - $3.05 $3.38UNION 6,333,817 359,905 5.7 4,000 2,860 - - - $4.56WEST 35,406,438 3,943,676 11.1 (171,011) (151,309) - - $2.27 $4.40TOTALS 213,192,579 21,359,885 10.0 1,430,866 2,703,999 425,000 899,563 $2.65 $4.73 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 2,856,990 14.1% (31,255) 297,144 - - $4.73GENERAL INDUSTRIAL 71,403,624 5,199,575 7.3% 280,312 355,674 - 659,563 $2.81WAREHOUSE/ 121,508,830 13,303,320 10.9% 1,181,809 2,051,181 425,000 240,000 $2.65DISTRIBUTIONTOTALS 213,192,579 21,359,885 10.0% 1,430,866 2,703,999 425,000 774,563 $2.95QUARTERLY COMPARISON AND TOTALS Net Absorption Construction Asking Rental RatesQUARTER, YEAR Total SF Vacant SF Vacancy % Current Quarter Year-to-date Current Completions ($)Q1, 2012 212,418,016 22,790,751 10.7 1,273,133 1,273,133 898,000 - $3.04Q4, 2011 212,618,117 24,067,884 11.3% 462,187 3,497,841 898,000 175,000 $3.09Q3, 2011 212,243,016 24,461,112 11.5 961,800 3,035,654 1,073,000 1,805,000 $3.02Q2, 2011 210,638,117 25,445,412 12.1% 2,447,123 2,073,854 1,910,000 (253,051) $2.84 CONSTRUCTION McGraw-Hill Construction’s most recent report showed residential and nonresidential future construction in the eight-county region combined increased by 16 percent to $143.6 million, March 2012. This up from 123.7 million in March 2011. Regional nonresidential development fell by 15 percent to $64.4 million from $75.4 million a year ago. COLLIERS INTERNATIONAL | P. 3
  4. 4. RESEARCH & FORECAST REPORT | Q2 2012 | INDUSTRIAL | GREATER COLUMBUS REGIONCENTRAL BUSINESS DISTRICT SOUTH The southern submarkets are Pickaway andThe Central Business District (CBD) recorded56,000 square feet of negative absorption in the Fairfield counties. Fairfield absorbed 134,000 522 offices insecond quarter, mostly due to a vacancy at 385 square feet and Pickaway lost a marginal 10,400 square feet. 62 countries onMount Vernon Avenue. Absorption was strongthroughout 2011, and there are still 9 spaces of 6 continents10,000 square feet vacant. Three spaces have SOUTHWEST The Southwest submarket showed absorption of United States: 147more than 100,000 square feet available. Canada: 31 63,000 square feet, bringing the vacancy rate Latin America: 19EAST down to 6.2 percent. Large leases occurred at Asia Pacific: 201 3420 Urbancrest Industrial Drive and 1641 EMEA: 118The submarkets comprising eastern Columbus Harmon Avenue.are East and Licking County. The Licking • $1.8 billion in annual revenuesubmarket absorption was flat. In the East, WEST • 1.25 billion square feet underLegacy Flooring moved out of 65,000 square managementfeet at 3445 Millenium Court. An owner/user The submarkets on the west side of Franklin • Over 12,500 professionalspurchased 2001 Courtright Road, absorbing county are West, Madison and Union. Union212,000 square feet, and Merlin Packaging county gained a marginal 4,000 square feet. UNITED STATES:leased 24,000 square feet at 861 Taylor Road. The West submarket showed 171,000 square Columbus Richard B. Schuen SIOR CCIMAll of the construction in Licking County last feet of negative absorption mainly coming from CEO | Principal | Columbusquarter has been completed. Quebec Ontario- the vacancy of a casket manufacturer at 315 Two Miranova Placebased KDC completed its 240,000-square-foot Phillipi Road Suite # 900 Columbus, Ohio 43215building. Mississauga, Canada-based AxiumPlastics completed its 110,000-square-foot Madison showed no leasing activity but TEL +1 614 410 5612facility, employing 165. Construction has been construction has begun on expanding the Targetcompleted on Pizzuti’s 303,000-square-foot Corp. distribution center by 425,000 square Leslie Hobbsspeculative building. Sonoco completed its feet. Director of Marketing | Ohio120,000-square-foot facility as well. Two Miranova Place MARKET INTEL Suite # 900 Columbus, Ohio 43215NORTH Market Activity Volume is the sum of the TEL +1 614 410 5640The submarkets comprising northern Columbus absolute value of each absorption change inare North and North Delaware. The North the market. It tells us a little more about whatsubmarket gained 98,000 square feet from exactly happened to the market behind the Jonathan Schuen absorption number. The Market Activity Volume Research Analystnumerous leases, including an owner/user Two Miranova Placepurchasing 7060 Huntley Road and Solar Planet was 2,743,340 square feet. This is average for Suite # 900leasing 24,000 square feet at 640 Dearborn second quarters in the past three years. Columbus, Ohio 43215Park Lane. North Delaware absorption was TEL +1 614 437 449555,000 square feet on the back of owner/user There are 51 buildings with vacant contiguousXcigent occupying 32,000 square feet at 8303 space equal to or greater than 100,000 squareGreen Meadows Drive. feet left in the Columbus market. 11 were built since 2000 and 10 of those are warehouse/SOUTHEAST distribution. These vacancies will keep This document/email has been prepared by Colliers International for advertising purposes. Colliers warehouse/distribution asking rates low while International statistics and data are audited annually andThe Southeast submarket drove the market for they last. may result in revisions to previously reported quarterlythe second quarter in a row with the largest and final year-end figures. Sources include Columbus Dispatch, Business First, Xceligent, CoStar, Chain Storepositive absorption of 1.1 million square feet, TENANTS IN THE MARKET Age, Wall Street Journal, Bureau of Labor Statistics,bringing the vacancy rate down to 12.3 percent. The types of tenant seen most frequently are Bureau of Economic Analysis, Gallup and the Cleveland Federal Reserve. bulk warehouse users seeking more thanJacobson, PDSI, Closed Loop, Buckeye Diamond 200,000 square feet of Class A space; thirdLogistics, NIFCO all combined for more than party logistics, auto parts distributors, healthcare,1,000,000 square feet of positive absorption. and tire users. There are currently at least 21 companies looking for 100,000 square feet orConstruction has been completed on Pizzuti’s greater in Columbus, and at least 39 companies125,000-square-foot facility for MBM in looking for 15,000 up to 99,999 square feet ofGroveport at 2240 Creekside Parkway. space. Accelerating success.www.colliers.com/columbus

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