Hampton Roads, Virginia MarketView - Industrial Market CBRE Global Research and Consulting Q2 2013 Hot Topics • Noland Company absorbed an additional 40,000 SF at 663 Woodlake Drive in Greenbrier, making that building 100% occupied. • Lumber Liquidators leased 150,000 SF at Northgate Logistics Center in Suffolk. • Port of Virginia continues to post year-over-year TEU volume increases, up 7.2% in the second quarter of 2013 over second quarter of 2012. Quick Stats OVER 198,000 SQUARE FEET OF POSITIVE ABSORPTION DURING SECOND QUARTER OF 2013 Q2 2013 QoQ YoY Vacancy 9.2 % Lease Rates $3.99 NNN Net Absorption 198,900 SF Completions 0 SF Hampton Roads Industrial Market The inventory for the Norfolk region’s industrial market tracked by CBRE totals over 79 million square feet. This total includes all multi-tenant and own- er-occupied industrial facilities in the region 20,000 square feet and larger. The Norfolk region is also commonly referred to as the “Hampton Roads” area and the Virginia Beach-Norfolk-Newport News, MSA. The Hampton Roads industrial market had 198,900 square feet of positive absorption during the second quarter of 2013. CBRE research tracked 7 buildings with 25,000 square feet or more of positive absorption during the quarter. There were no deliveries and no new projects under construction during the second quarter of 2013. Average asking lease rates decreased during the second quarter, and are currently estimated at $3.99 per square foot, triple net. The overall vacancy rate in the Hampton Roads industrial market decreased to 9.2% in the second quarter of 2013. The South- side vacancy rate decreased during the second quarter by 50 basis points to 10.3%, while the Peninsula rate increased 10 basis points to 6.9%. CBRE research now tracks seventeen properties with 100,000 square feet or more of vacancy including five properties with 250,000 square feet or more of vacancy. Hampton Roads’ availability rate (which includes space available for sub- lease and future available) decreased from first quarter 2013 to 11.1%. The Southside availability rate decreased 130 basis points to 12.4%, while the Peninsula availability rate decreased 150 basis points to 8.1%. Region-wide, over 402,364 square feet of space was available for sublease, including 176,000 square feet in the Cavalier Industrial Park submarket. Additionally, over one million square feet of space is currently marketed as future available. Vacancy of 100,000 SF or More Tracking 17 Spaces Rail Containers Handled 7.7% (YoY) Manufacturing Employment 4.8% (12 months) Port of Virginia TEU Volume 7.2% (YoY) *Arrows indicate change from previous quarter.
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Hampton Roads, Virginia MarketView - Industrial Market
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Hampton Roads, Virginia MarketView - Industrial Market
CBRE Global Research and Consulting Q2 2013
Hot Topics
• Noland Company absorbed an additional 40,000 SF at 663 Woodlake Drive in Greenbrier, making that building 100% occupied.
• Lumber Liquidators leased 150,000 SF at Northgate Logistics Center in Suffolk.
• Port of Virginia continues to post year-over-year TEU volume increases, up 7.2% in the second quarter of 2013 over second quarter of 2012.
Quick Stats
OVER 198,000 SQUARE FEET OF POSITIVE ABSORPTION DURING SECOND QUARTER OF 2013
Peninsula Total 24,379,116 6.9 8.1 0 $4.64 (31,508) (8,199)
HAMPTON ROADS TOTAL 79,078,529 9.2 11.1 0 $3.99 198,900 72,461
CBRE|HAMPTON ROADS SECOND QUARTER 2013 INDUSTRIAL MARKETVIEW
CHART 1: UNEMPLOYMENT RATE
Table 1: Hampton Roads Submarket Statistics
CHART 2: EMPLOYMENT BY INDUSTRY
Source: Bureau of Labor Statistics
The Hampton Roads MSA’s civilian workforce totals approximately 829,500. The unemployment rate in Hampton Roads as of April 2013 was 5.4%, significantly lower than the national average of 7.1%.
The largest employer in the region is the government, which directly employs approximately 162,300 of the total civilian workforce.
During the second quarter of 2013, the industrial vacancy rate in Hampton Roads decreased 30 basis points to 9.2%. The availability rate, which factors in vacant space and future available space in existing buildings, decreased 130 basis points to 11.1% in the second quarter of 2013. As of quarter end, there was over 400,000 square feet of sublease space in the market and over 1 million square feet of future available space.
Quarterly net absorption was positive 198,900 square feet. The Southside experienced 230,408 square feet of positive absorption during the second quarter, while the Peninsula saw over 31,000 SF in negative absorption.
CBRE|HAMPTON ROADS SECOND QUARTER 2013 INDUSTRIAL MARKETVIEW
CONSTRUCTION AND DELIVERIES Over the past couple of years, new construction activity has been limited to a handful of small-bay product projects. Continuing in this trend, there were no projects under construction during the quarter. There also were no deliveries for the second quarter of 2013.
WEIGHTED ASKING RENT Average asking rents in Hampton Roads, quoted in triple net terms, averaged $3.99 per square foot as of second quarter 2013. The Greenwich/Cleveland Street area has the highest average rental rate at $6.57 per square foot, NNN; while the Isle of Wight/Franklin submarket has the lowest average rental rate at $2.00 per square foot, NNN.
J. Scott Adams, CCIM Managing Director & Regional President CBRE|Hampton Roads 150 West Main Street Suite 1100 Norfolk, VA 23510 t: +1 757 228 1836 e: [email protected]
Hardik Barot Senior Research Analyst CBRE|Hampton Roads 150 West Main Street Suite 1100 Norfolk, VA 23510 t: +1 757 228 1821 e: [email protected]
CONTACTS
GLOBAL RESEARCH AND CONSULTING This report was prepared by the CBRE U.S. 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.
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.
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