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  • 1. Q4 2011 | INDUSTRIAL CINCINNATI, OH THE KNOWLEDGE REPORT STRONG FINISH ENDS THE YEAR ON A POSITIVE NOTE EXECUTIVE SUMMARY The Greater Cincinnati industrial market finished the year on a strong note and produced more than 1.1 million square feet of positive absorption in the fourth quarter. This was just enough to send the total year-to-date absorption into positive territory at 120,511 square feet. Most of the absorption came from general industrial properties, not distribution space or flex/R&D properties. This means MARKET INDICATORS that several midsize deals were completed, as opposed to one large deal accounting for all of the positive absorption. Q4 11 Q1 12* VACANCY For the fourth quarter, the overall vacancy rate was 9.3% and the overall weighted asking rate for industrial properties was $3.53 per square foot. Flex/R&D space slightly increased to $6.17 per NET ABSORPTION square foot, while distribution space came in at $2.88 per square foot. Comparatively, general CONSTRUCTION — — industrial space was recorded at $3.70 per square foot. RENTAL RATE — — NORTHERN KENTUCKY *Projected Change to Following Quarter The Northern Kentucky submarkets were down slightly in the fourth quarter, as all markets combined for 43,373 square feet of negative net absorption. For 2011 as a whole, the southern side of the river posted 72,458 square feet of total year-to-date absorption and ended on a positive note. Several lease signings and lease renewals were witnessed in the fourth quarter, including Valassis Inc.’s 140,000 square foot renewal at 10176 Dixie Highway, Johnson Controls’ 135,550 square foot OVERALL VACANCY RATE lease at 7575 Empire Drive and Packaging Unlimited’s 48,176 square foot lease at 7130 New Buffington Road. 9.5% 9.0% SUBURBAN OHIO SUBMARKETS 8.5% On the northern side of the river, the I-275 East Corridor submarket led the way in the fourth quarter 8.0% of 2011. This submarket posted 526,137 square feet of positive absorption, and a large portion of this growth was fueled by Global Scrap Management’s takeover of part of the former Ford Transmission 7.5% Plant in Batavia. The Blue Ash submarket also chipped in to help the cause, and added 267,319 4Q 09 1Q 10 2Q 10 3Q 10 4Q 10 1Q 11 2Q 11 3Q 11 4Q 11 square feet of positive absorption. Quarterly Net Absorption *Vacancy Rate increased in 4Q 11 due to a1,500,000 historical correction.1,000,000 500,000 865,230 SF www.colliers.com/cincinnati 0 -500,000-1,000,000 1 000 000
  • 2. THE KNOWLEDGE REPORT | Q4 2011 | INDUSTRIAL | CINCINNATI CONSTRUCTION FORECAST On the construction side, one large speculative building The strong finish of 2011 was great news for the is under contract and several smaller build-to-suit Greater Cincinnati industrial market. Having 1.1 million projects are underway. The speculative building is in square feet of positive net absorption is just what the Monroe, as IDI continues construction on its 553,338 market needed in its economic recovery. Although we square foot distribution center at 1100 Logistics Way. saw a flurry of activity during the past three months, This building is expected to be completed in May of we expect this activity to slow down for most of 2012. 2012. USUI International is still on track to finish their There is slight concern with the Tri-County/Union 127,000 square foot facility in Sharonville. Links Centre submarket, as over 2 million square feet hasLiz Claiborne Facility Unlimited is working on a 60,000 square foot facility in already surfaced and will become vacant next year. Norwood; Eurostampa is completing a 75,000 square This includes Avon Products on Progress Place, CEVA foot facility in Roselawn; and Z.F. Steering Systems Logistics on Windisch Road and the Liz Claiborne has two buildings under construction in Florence. Facility on Jacquemin Drive. We are hopeful that industrial companies will continue to expand to help Additional construction of speculative industrial space offset this expected negative absorption, making 2012 is not anticipated anytime soon, but we will continue an overall good year. to see build-to-suit projects hit our market as manufacturing continues to improve. UPDATE Recent Transactions FOURTH QUARTER ACTIVITY PROPERTY SUBMARKET TENANT/BUYER LANDLORD/SELLER SIZE TYPE 5121 Fishwick Drive Central/Midtown The State of Ohio on Behalf of UC Quality Associates Inc. 210,000 Sale West Chester Commerce Park Bldg II Tri-County/Un. Ctr. ING Clarion Partners ProLogis 205,920 Sale 9842 International Blvd Tri-County/Un. Ctr. Quality Associates RREEF Americas 204,800 Sale 9756 International Blvd Tri-County/Un. Ctr. Netrada North America RREEF Americas 192,000 Lease 10176 Dixie Highway Florence/Walton Valassis Inc. Paul Hemmer Companies 140,000 Lease Renewal 7575 Empire Drive Florence/Walton Johnson Controls Brendamour Group Realtors 135,550 Lease 1441 Western Avenue Central/Midtown Berman Printing Dyment Co. 101,920 Lease Renewal 10121 Princeton Glendale Road Tri-County/Un. Ctr. ING Clarion Partners ProLogis 90,640 Sale 3997 McMann East Woeste Investments 3M Company 83,000 Sale 7697 Innovation Way I-71 North Malhotra Family LLC Neyer Holdings 52,500 Sale 7130 New Buffington Road Florence/Walton Packaging Unlimited DCT Industrial Trust 48,176 Lease ProLogis Park Sharonville #2 Tri-County/Un. Ctr. Ferguson Enterprises Inc. ProLogis 44,800 Lease Corporate Woods Center Blue Ash Construction Software Tamarkin Co. 43,000 Lease 2909-2929 E. Crescentville Road Tri-County/Un. Ctr. Baldor Motors ProLogis 38,400 Lease Renewal 7107 Industrial Row I-71 North Healthwarehouse.com DCT Industrial Trust 34,106 Lease Expansion 419 Northland Blvd Tri-County/Un. Ctr. USA Lamp & Ballast Recycling, Inc. Haueter Properties, Inc. 32,970 Sale 7300 Industrial Road I-71 North M&M Logistics Oldcastle, Inc. 30,000 Sale 100 Commerce Blvd I-71 North Amp Electric Vehicles 100 Commerce Boulevard LLC 24,500 Lease 3143 Western Row Road I-71 North Good Health Properties Singer Contract Group 23,000 Lease 10557 Medallion Drive Lockland/Evendale Scherzinger Pest Control The National Realty Ground, Inc. 22,772 Sale 3965 Virginia Avenue Central/Midtown Tire Discounters Anchor Fluid Power 20,000 Lease 11658 Baen Road I-71 North Cahill Company Agnone-Kelly Properties LLC 17,800 Sale Union Enterprise Center Tri-County/Un. Ctr. H&Y Cabinet & Granite Depot Neyer Holdings 12,500 Lease 2647 Morgan Lane Hamilton ADPI System Marsh Larry L & Patti A 12,090 LeaseTransactions are believed to be accurate but not guaranteed.P. 2 | COLLIERS INTERNATIONAL
  • 3. THE KNOWLEDGE REPORT | Q4 2011 | INDUSTRIAL | CINCINNATI SUBMARKET DATA SUBMARKET Total Inventory Total Vacant Vacancy Rate Quarterly YTD Avg. Rate SF Absorption Absorption 275 East Corridor 7,914,976 2,213,297 28.0% 526,137 496,743 $3.59 Airport 27,928,875 2,931,474 10.5% (163,305) 42,769 $3.37 Blue Ash 13,912,070 1,212,923 8.7% 267,319 (293,760) $5.20 Campbell County 4,193,730 16,000 0.4% 0 0 N/A Central/Midtown 55,319,876 3,592,647 6.5% 21,098 (688,274) $3.60 Covington 4,902,449 266,716 5.4% (32,716) (131,716) $3.64 Eastern Outlying 3,993,267 722,076 18.1% 173,629 29,705 $4.83 Florence/Walton 20,736,944 1,107,166 5.3% 152,648 161,405 $3.17 Hamilton 9.5% 7,321,859 264,300 3.6% (600) 115,400 $3.53 9.0% I-71 North Corridor 10,114,916 1,501,734 14.8% 79,677 (66,899) $3.73 8.5% Lockland/Evendale 8.0% 19,178,561 798,530 4.2% (50,067) (235,856) $3.44 7.5% 4Q 09 1Q 10 2Q 10 3Q 10 4Q 10 1Q 11 2Q 11 3Q 11 4Q 11 Monroe/Middletown 11,076,364 1,302,880 11.8% (328,149) (98,649) $2.92 Quarterly Net Absorption Outside Metro Area 1,500,000 315,000 40,000 12.7% 0 0 $4.50 1,000,000 Tri-County/Union Centre 64,771,194 7,644,217 11.8% 189,650 619,734 $3.41 500,000 865,230 SF Western Outlying 0 6,433,297 289,300 4.5% 329,909 169,909 $3.52 -500,000 MARKET TOTALS 258,113,378 23,903,260 9.3% 1,165,230 120,511 $3.53 -1,000,000 1 000 000 4Q 09 1Q 10 2Q 10 3Q 10 4Q 10 1Q 11 2Q 11 3Q 11 4Q 11 AVG. ASKING RATES (PER SF-FULL SERVICE GROSS) QUARTERLY NET ABSORPTION General Flex Distribution Quarterly Net Absorption$8 1,500,000 The Cincinnati Industrial Market’s vacancy rate$7 1,000,000 stands at 9.3%, year-to-date net absorption totaled Square Feet$6 (120,511) SF.$5 500,000$$4 0$3$2 -500,000 4Q 09 1Q 10 2Q 10 3Q 10 4Q 10 1Q 11 2Q 11 3Q 11 4Q 11 -1,000,000 4Q 09 1Q 10 2Q 10 3Q 10 4Q 10 1Q 11 2Q 11 3Q 11 4Q 11 COLLIERS INTERNATIONAL | P. 3
  • 4. THE KNOWLEDGE REPORT | Q4 2011 | INDUSTRIAL | CINCINNATI I-75 NORTH 512 offices in HAMILTON 61 countries on 6 continents TRI-COUNTY/ UNION CENTRE United States: 125 Canada: 38 I-71 NORTH Latin America: 18 LOCKLAND/ BLUE Asia Pacific: 214 WESTERN EVENDALE ASH CORRIDOR EMEA: 117 • $1.5 billion in annual revenue CENTRAL/ EASTERN • 979 billion square feet under MIDTOWN CORRIDOR management COVINGTON • Over 12,000 professionals INT’L AIRPORT CEO | PRINCIPAL: AIRPORT Shenan P. Murphy, CCIM +1 513 721 4200 KENTON Colliers International | Greater Cincinnati FLORENCE CAMPBELL 425 Walnut Street, Suite 1200 COUNTY Cincinnati, OH 45202 Colliers International statistics are audited annuallyIndustrial Services  Greater Cincinnati | and may result in revisions to previously reported quarterly and final year-end figuresChuck A. Ackerman, CCIM, SIOR Erin M. Casey, GA-C, MICP™ Michael E. Daly, SIORBrokerage Senior Vice President Senior Brokerage Associate Brokerage Senior Vice Presidentchuck.ackerman@colliers.com erin.casey@colliers.com Principal | CincinnatiDIR +1 513 562 2266 DIR +1 513 562 2225 mike.daly@colliers.com DIR +1 513 562 2206John B. Gartner, III, SIOR William K. Keefer, SIOR Steve R. MillerBrokerage Senior Vice President Brokerage Senior Vice President Brokerage Vice PresidentPrincipal | Cincinnati Principal | Cincinnati steve.miller@colliers.comjohn.gartner@colliers.com bill.keefer@colliers.com DIR +1 513 562 2252DIR +1 513 562 2207 DIR +1 513 562 2235www.colliers.com/cincinnati