Current Market Overview In the first half of 2016, the Prince George’s County industrial market has continued to trend upward in all statistical factors. We continue to see rent growth as well as positive absorption. Average rent in the market as a whole has now hit an all-time high of over $6.90 per square foot NNN. Asking rental rates for new class A product are in the mid $7’s per square foot on a shell basis, thus justifying the purchase prices well over $130 per square foot on average. Absorption in 2016 has been steady with the Cheverly/Hyattsville submarket leading the pack. Cabin Branch Distribution Center saw significant absorption between leases inked with the US Government as well as Children’s Hospital and GreenDrop. We also saw a lease inked with Washington Cash and Carry on Columbia Park Road, backfilling approximately 130,000 square feet vacated by Safeway in their consolidation to their Collington headquarters. Warehouse sales continue to attract significant buyer demand. All three larger warehouse sales this year were all in the $100 per square foot range for class B facilities. Forecast We expect that the 2nd half of 2016 should see increased leasing velocity – we are anticipating at least 200,000 square feet in additional leases inked. Leasing demand is expected from continued migration by tenants in both DC and Northern Virginia, as well as new e-commerce warehouse requirements that will be coming to the market. The industrial sale market will continue to see upward movement in pricing as rental rates increase as well as supply of product for sale dwindles. The scarcity of industrial zoned land in the county for new construction should also help push pricing as we move towards 2017. Trends Overall Vacancy Construction Net Absorption Rental Rates 10100 Business Parkway | Lanham, MD 20706 | +1 301 459 4400 naimichael.com 9.0% 8.2% 8.4% 8.5% 8.1% 8.1% 6.0% 7.0% 8.0% 9.0% 10.0% Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Vacancy Available (%) $6.46 $6.72 $6.79 $6.82 $6.95 $6.90 $5.50 $6.00 $6.50 $7.00 $7.50 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Average Rental Rate ($/SF) 0 200,000 400,000 600,000 800,000 1,000,000 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Net Absorption (SF) 2016 Mid-Year | Prince George’s County, MD Industrial Market Report
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Current Market OverviewIn the first half of 2016, the Prince George’s County industrial market has continued to trend upward in all statistical factors. We continue to see rent growth as well as positive absorption. Average rent in the market as a whole has now hit an all-time high of over $6.90 per square foot NNN. Asking rental rates for new class A product are in the mid $7’s per square foot on a shell basis, thus justifying the purchase prices well over $130 per square foot on average.
Absorption in 2016 has been steady with the Cheverly/Hyattsville submarket leading the pack. Cabin Branch Distribution Center saw significant absorption between leases inked with the US Government as well as Children’s Hospital and GreenDrop. We also saw a lease inked with Washington Cash and Carry on Columbia Park Road, backfilling approximately 130,000 square feet vacated by Safeway in their consolidation to their Collington headquarters.
Warehouse sales continue to attract significant buyer demand. All three larger warehouse sales this year were all in the $100 per square foot range for class B facilities.
ForecastWe expect that the 2nd half of 2016 should see increased leasing velocity – we are anticipating at least 200,000 square feet in additional leases inked. Leasing demand is expected from continued migration by tenants in both DC and Northern Virginia, as well as new e-commerce warehouse requirements that will be coming to the market.
The industrial sale market will continue to see upward movement in pricing as rental rates increase as well as supply of product for sale dwindles. The scarcity of industrial zoned land in the county for new construction should also help push pricing as we move towards 2017.
Tren
ds Overall Vacancy Construction
Net Absorption Rental Rates
10100 Business Parkway | Lanham, MD 20706 | +1 301 459 4400
naimichael.com
9.0%
8.2%8.4% 8.5%
8.1% 8.1%
6.0%
7.0%
8.0%
9.0%
10.0%
Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016
Vacancy Available (%)
$6.46
$6.72$6.79
$6.82
$6.95
$6.90
$5.50
$6.00
$6.50
$7.00
$7.50
Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016
Average Rental Rate ($/SF)
0
200,000
400,000
600,000
800,000
1,000,000
Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016
Net Absorption (SF)
2016 Mid-Year | Prince George’s County, MDIndustrial Market Report
Industrial MarketMid-Year | 2016
Bui
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Tota
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F)
Tota
l Ava
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F)
Vaca
nt
Ava
il. (S
F)
Vaca
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%
Tota
l Net
A
bso
rptio
n (S
F)
Tota
l Avg
Rat
e ($
/SF
/Yr)
Und
er
Co
nstr
uctio
n (S
F)
Prince George's County
1,507 52,103,700 6,315,938 4,208,399 8.1% 172,029 $6.90 647,421
Northern Submarkets
354 11,553,878 1,342,059 961,381 8.3% 50,412 $6.95 236,421
Central Submarkets
965 36,040,975 4,606,667 3,032,097 8.4% 103,035 $7.04 411,000
Southern Submarkets
188 4,508,847 367,212 214,921 4.8% 18,582 $5.70 0
Report Prepared by:
Lance SchwarzSenior Vice President+1 301 918 [email protected]
Peter BurleighAssociate+1 301 918 2913 [email protected]
The information contained herein was obtained by sources deemed reliable; however we make no representation as to its accuracy or completeness.
Major Lease Transactions
Building Submarket Tenant Size (SF)
6300 Columbia Park Road Landover/LargoWashington Food & Supply of MD
136,860
1505 Cabin Branch Drive Landover/Largo GSA 50,530
1511 Cabin Branch Drive Landover/Largo Children’s Hospital 40,178
Major Sales Transactions
Building Submarket Sales Price Size (SF)
8400 Westphalia Road Landover/Largo $14,000,000 101,000
10201 Good Luck Road Greenbelt $12,852,000 142,810
8800 Lottsford Road Landover/Largo $10,100,000 102,000
SALES & LEASING | PROPERTY MANAGEMENT | DEVELOPMENT CONSULTING
Cabin Branch Distribution Center - 1511 Cabin Branch Drive
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