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Columbus Industrial MarketView


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"The Columbus economy, not dominated by any single industry, remains strong during times of national economic stress." Courtesy CBRE, this report shows Columbus' progress as an industrial market.

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Columbus Industrial MarketView

  1. 1. Columbus IndustrialMarketViewQ3 2012 CBRE Global Research and Consulting Q1 US GDP Q2 US GDP US RETAIL SALES Columbus Industrial SF 4.2% 3.3% 4.3% YoY July 211,678,462 SFThe Columbus Industrial Market continues tostabilize and rebound. Figure 1: Columbus Local Economy Make-Up Quick Stats 0.2% 6.0% Professional and Related 6.7% 16.8% Q3 2012 QoQ YoY Office Support Total Vacancy 12.1%  i Services 8.0% Lease Rates $2.92-$4.72 i h Production and Transportation Net Absorption 198,124 SF h h Management 15.7% Under Construction 125,000 SF i i 10.7% Sales Health Care Support Hot Topics Construction, Extraction, and Maintenance • orthington Industries bought W Business and Financial Operations 10.8% into Utica shale drilling boom with 13.5% Farming, Fishing, and Forestry the acquisition of Bremen-based 11.5% Westerman Companies, a tank and Source: U.S. Bureau of Labor Statistics pressure cylinder maker. Westerman Companies employs 220 people and The Columbus economy, not dominated and utilities, offering an exceptionally has sales of $71.8 million. by any single industry, remains strong diversified business environment in central during times of national economic stress. Ohio. • iagara Bottling, LLC is considering N Columbus is considered a center for putting a bottling plant in Gahanna banking and finance, with JPMorgan Columbus, is also home to The Ohio that would employ 73 workers. The Chase Co., Nationwide, and Huntington State University, the third largest campus proposal marked one of several tax Bancshares heading the list of local university in the US, as well as Battelle credits the state Tax Credit Authority financial institutions with a major regional Memorial Institute, The world’s largest approved for Central Ohio projects. and national presence. private research and development foundation. • olumbus was ranked No. 4 for new C Columbus is home to a diverse collection logistics projects in Site Selection of Fortune 1000 companies that are led Columbus’s strategic location continues magazine. Approximately 29 projects by Cardinal Health, Nationwide Insurance to attract new companies. Within the past were completed from January 1, Enterprise, and American Electric Power. six months, leases have been signed with 2011 to May 31, 2012. These three companies combined employ several companies new to the market over 19,000 people in the Columbus including Stella Dot,, MSC • ackman Capital, a Los Angeles real H metropolitan area. Direct, and Zulily. estate investor with ties to Columbus, purchased 12 flex office/warehouse Columbus MSA’s share of Finance, The Columbus Industrial Market continues properties, and 32 warehouse/ Insurance Real Estate employment is to stabilize and rebound. Overall the distribution centers with a combined 8.1%, while the national average is 6.1%. Industrial Occupancy has remained steady 2,744,387 square feet for $32 Franklin County’s twenty largest employers at a 12.1% vacancy rate from 2nd to 3rd million. represent government, education, trade, quarter. Net absorption this quarter was finance, manufacturing, health care, 198,124 square feet. © 2012, CBRE, Inc.
  2. 2. Industrial Market StatisticsQ1 2012 Q3 2012 Table 1: Market Statistics Average Asking Average Asking Under Lease Rate 10-100K SF Lease Rate 100K+SFRegion, Sector | MarketView COLUMBUS INDUSTRIAL | MarketView Market Rentable Area % of Total Base Gross Activity SF Construction SF NNN $/SF/YR NNN $/SF/YR Vacancy Rate Central 34,233,581 16.2% 5,016,245 $6.17 $3.68 14.7% East 23,483,894 11.1% 4,811,163 $4.90 $4.40 20.5% Northeast 15,227,522 7.2% 1,478,943 105,000 $4.97 $3.46 9.7% Northwest 1,996,266 0.9% 203,593 $6.57 $4.80 10.2% Outlying 45,871,782 21.7% 2,725,142 $3.48 $2.29 5.9% Southeast 42,440,547 20.0% 8,733,591 $3.03 $2.75 20.6% Southwest 12,874,684 6.1% 1,597,491 $4.89 $3.11 12.4% West 35,550,186 16.8% 6,747,384 20,000 $4.61 $2.31 19.0% Total 211,678,462 12.5% 31,313,552 125,000 12.1% Source: CBRE Research Figure 2: Vacancy Vacancy Third quarter 2012 vacancy remained steady at 3Q Vacancy Rate 12.1% 12.1%. Availability declined from 15.5% to 14.8%. 13.20% Leasing activity for third quarter 2012 showed an 13.00% increase with a total of 2,806,716 square feet 12.80% leased compared to last quarter’s 2,079,075 square feet. 12.60% 12.40% A few notable lease transactions include Restoration 12.20% Hardware’s expansion of 400,000 square foot lease at 100 Enterprise Parkway (for a total of 1,223,780 12.00% square feet). This was the largest new lease 11.80% transaction in the Columbus market this quarter. 11.60% Honeywell renewed 340,704 square feet at Capital Park South, Buckeye Diamond Logistics, Inc. renewed 11.40% 1Q12 2Q12 3Q12 their existing lease at 4531 Industrial Center Drive for 213,486 square feet, and Showa leased YTD Vacancy Rate 12.4% 112,000 square feet from First Industrial at 1020 16.0% Pittsburgh Drive. 14.0% Sale transactions this quarter, totalled 6,356,633 12.0% square feet. A majority of this consisted of the 2,744,387 square foot Schottenstein Portfolio 10.0% investment acquisition by Hackman Capital, and the 8.0% 2,858,355 square foot acquisition of First Industrial‘s Portfolio by Westmount Realty. The largest owner user 6.0% sale was 555 Lancaster Avenue, in Reynoldsburg, 4.0% which is 92,527 square feet, to Dynalab EMS, Inc. 2 2 2.0% 0.0% 2008 2009 2010 2011 2012 Source: CBRE Research © 2012, CBRE, Inc.
  3. 3. Figure 3: Construction Construction There are currently two buildings under construction this 3Q Construction 125,000 SF quarter. A 20,000 square foot storage facility in Hilliard, Q3 2012 Q1 2012 400,000 and a 105,000 square foot manufacturing facility in New 350,000 Albany. 300,000 1,600,000 YTD Construction COLUMBUS Ind ustrial | MarketView Region, Sector | MarketView 250,000 1,400,000 280,000 SF 200,000 1,200,000 150,000 1,000,000 800,000 100,000 600,000 50,000 400,000 0 200,000 1Q12 2Q12 3Q12 0 Source: CBRE Research 2008 2009 2010 2011 2012 Figure 4: Direct Average Asking Lease Rates Direct Average Asking Lease Rates Asking net lease rates for industrial space throughout the 3Q Lease Rate 10-100K SF $4.72 Columbus industrial market ranged from $1.00-$12.50 3Q Lease Rate 100K+ SF $2.92 per square foot per year net. The overall average for$5.00 space between 10,000-100,000 square feet was $4.72 which is up $0.62 per square foot from second quarter$4.00 2012. The overall average for space over 100,000 square feet was $2.92 per square foot. This rate is up $0.04 per square foot from second quarter 2012. 2500$3.00 $5.00 2000 YTD Lease Rate $4.00$2.00 10-100K SF 1500 $3.00 $4.53 YTD Avg Lease Rate$1.00 1000 (100K+ SF) $2.00 YTD Lease Rate 100K+ SF 500$0.00 $1.00 $3.02 1Q12 2Q12 3Q12 0 $0.00 Source: CBRE Research 2008 1 2009 2 2010 3 2011 4 2012 5 Figure 5: Absorption Net Absorption Net absorption for second quarter 2012 was 1,064,594 3Q Absorption SF 198,124 SF square feet. Net absorption for third quarter 2012 was1,500,000 198,124 square feet, for a total of 1,262,718 square feet, or .62% reduction in the vacancy rate through third quarter 2012.1,000,000 1,000,000 500,000 YTD Absorption SF 500,000 390,916 SF 0 0 -500,000 -500,000 33 -1,000,000-1,000,000 -1,500,000 1Q12 2Q12 3Q12 -2,000,000 Source: CBRE Research 2008 2009 2010 2011 2012 © 2012, CBRE, Inc.
  4. 4. Key Transactions Sale contactsQ1 2012 Q3 2012 Address Size (SF) Buyer Seller For more information about this Local 2240 Creekside Pkwy 125,000 Becknell Development Pizzuti MarketView, please contact: columbus ResearchRegion, Sector | MarketView COLUMBUS INDUSTRIAL | MarketView 555 Lancaster Ave 92,527 Dynalab EMS, Inc. James Gary W Trust 6767 Huntley Road 79,120 Atlas Industrial Contractors Atlas Realty, LLC Rob Click Senior Managing Director Lease CBRE Columbus 280 N. High Street, Address Size (SF) Tenant Landlord Market Area Seventeenth Floor Restoration Columbus, OH 43215 100 Enterprise Pkwy 1,223,780 Duke Outlying t: +1 614.430.5040 Hardware, Inc. e: Buckeye Diamond 4531 Industrial Center Drive 213,486 CIVF 1-OH 1B03, LLC Southeast Dan Askew Logistics Office Research Coordinator Investment Sale CBRE Columbus 280 N. High Street, Address Size (SF) Buyer Price Cap Rate Seventeenth Floor Columbus, OH 43215 Schottenstein Property Group Portfolio 2,744,387 Hackman Capital $11.66/SF 11.00% t: +1 614.430.5098 First Industrial Portfolio 2,858,355 Westmount Realty $13.00/SF Undisclosed e: Source: CBRE Research Christine Zember Industrial/Retail Research Coordinator CBRE Columbus 280 N. High Street, Seventeenth Floor Columbus, OH 43215 t: +1 614.430.5042 e: +FOLLOW US GOOGLE+ 13332542089478#1106404133 32542089478/posts FACEBOOK CBRE/85277065893 TWITTER @cbrecolumbus Global Research and Consulting This report was prepared by the CBRE Columbus Research Team which forms part of CBRE Global Research and Consulting – a network of preeminent researchers and consultants who collaborate to provide real estate market research, econometric forecasting and consulting solutions to real estate investors and occupiers around the globe. Acknowledgements The CBRE Columbus Research Team would like to acknowledge Michael Mullady, Jeff Lyons Matthew Lehman for their contributions to this report. 4 4 Disclaimer Information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to confirm independently its accuracy and completeness. This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written permission of the CBRE Global Chief Economist. © 2012, CBRE, Inc.