1Q 2011 2Q 2011 VACANCY NET ABSORPTION CONSTRUCTION RENTAL RATE MARKET REPORT NASHVILLE www.colliers.com/Nashville Industrial Market Stabilizes As the economy strengthens, the industrial market is starting to stabilize. The past year was a difficult one, with little growth in any area of the commercial real estate market. With the second quarter of 2011, we’re seeing some improvement. The length of time required to complete transactions continues to remain long as tenants maintain a cautious approach. Many of the transaction posted during this quarter originated in August of 2010. Despite this cautious approach, transactions are being completed and tenants are more receptive to investing in larger spaces. Absorption posted negative 115,000 SF despite several 100,000+ SF leases being signed during the quarter, a dramatic change from last quarter’s positive absorption of 479,828 square feet. Vacancy rates remained stable since the first quarter at 12.3%, an increase from the second quarter of last year. The highest rates were recorded in the Southwest Corridor with an average of $7.86. MARKET INDICATORS 2Q 2011 | INDUSTRIAL Nashville Industrial Market Summary of Statistics, Q2 2011 Vacancy Rate: 12.3% Absorption: -111,324 SF Under Construction: 589,000 SF Asking Rents Per Square Feet: Overall Rental Rates: $5.44 Warehouse - Distribution: $3.95 Light Industrial: $6.99 Heavy - Mfg: $0.00 Bulk Warehouse: $4.10 Flex/R&D: $4.81 Quarterly Comparisons and Totals QUARTER BUILDINGS TOTAL INVENTORY SF DIRECT VACANT DIRECT VACANCY RATE SUBLEASE VACANCY RATE NET ABSORPTION CURRENT QTR NET ABSORPTION YTD SF UNDER CONSTRUCTION SF AVG ASKING RATE Q2.11 1,944 159,138,430 19,577,486 12.3% 1.4% (115,610) (111,324) 589,000 $5.44 Q1.11 1,946 158,970,444 19,153,453 12.3% 1.6% 479,828 479,828 2,032,000 $4.27 Q4.10 1,950 158,292,862 19,349,141 12.2% 1.7% (478,523) (1,450,577) 2,032,000 $4.18 Q3.10 1,950 158,329,421 19,201,016 12.1% 1.6% (1,231,090) (1,448,503) 186,809 $4.27 Q2.10 1,950 158,328,561 17,328,561 11.3% 1.6% (683,239) (217,387) 186,809 $4.31 By Property Type BUILDING TYPE BUILDINGS TOTAL INVENTORY SF DIRECT VACANT DIRECT VACANCY RATE SUBLEASE VACANCY RATE NET ABSORPTION CURRENT QTR NET ABSORPTION YTD SF AVG ASKING RATE Warehouse - Distribution 1,054 49,142,084 5,529,285 11.3% 0.4% 137,937 269,157 $3.95 Light Industrial 560 58,154,049 2,480,244 4.3% 0.8% (70,745) 161,771 $6.99 Heavy - Mfg 6 779,289 0 0.0% 0.0% 0 0 $0.00 Bulk Warehouse 99 39,050,101 9,364,133 25.0% 3.5% (97,090) 455,578 $4.10 Flex/R&D 225 12,012,907 2,203,824 18.3% 1.4% (85,712) 135,974 $4.81 - - 2011
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
1Q
2011
2Q
2011
VACANCY
NET ABSORPTION
CONSTRUCTION
RENTAL RATE
MARKET REPORTNASHVILLE
www.colliers.com/Nashville
Industrial Market Stabilizes
As the economy strengthens, the industrial market is starting to stabilize. The past year was a difficult one, with little growth in any area of the commercial real estate market. With the second quarter of 2011, we’re seeing some improvement. The length of time required to complete transactions continues to remain long as tenants maintain a cautious approach. Many of the transaction posted during this quarter originated in August of 2010. Despite this cautious approach, transactions are being completed and tenants are more receptive to investing in larger spaces.
Absorption posted negative 115,000 SF despite several 100,000+ SF leases being signed during the quarter, a dramatic change from last quarter’s positive absorption of 479,828 square feet. Vacancy rates remained stable since the first quarter at 12.3%, an increase from the second quarter of last year. The highest rates were recorded in the Southwest Corridor with an average of $7.86.
MARKET INDICATORS
2Q 2011 | INDUSTRIAL
Nashville Industrial MarketSummary of Statistics, Q2 2011
The automotive supplier industry has begun further development in the area the relocations of Valeo, Carlex, and Tottser-Iroquois Industries. In addition to these companies, GM is planning on producing two midsize cars and adding over 1,000 jobs to the Williamson County area. Nissan has also decided to relocate their North American headquarters to Nashville. Both of these moves predict positive growth in the automotive industry for the Nashville MSA.
Though this quarter showed little improvement, experts feel positive about growth for the industrial market as the national and local economies strengthen.
Flex/R&D
Bulk Warehouse
Heavy - Mfg
Light Industrial
Warehouse - Distribution
2Q 2011 | Vacancy Space By Type
-400000
-350000
-300000
-250000
-200000
-150000
-100000
-50000
0
50000
100000
150000
Nort
h
Airp
ort S
outh
wes
t
Wes
t
Sout
heas
t
East
IBD
2Q 2011 | Net Absorption By Submarket
RECENT SALES TRANSACTIONSSALES ACTIVITY
PROPERTY BUYER/SELLER SALE PRICE SIZE SF SUBMARKET
7200 Centennial Blvd Carlex/Zeledyne $7,500,000 1,607,630 West
2225 Madison St Space for Lease/NCP 2007 Clarksville, LLC $2,600,000 303,899 North
Beckwith Farms Building 4A Jupiter Band/Panattoni $6,200,000 100,000 East
186 First St North TBA Investments/Noland Co $1,122,000 54,474 IBD
118 Wheeler Tottser-Iroquois Industries/KHS America $1,129,000 28,105 Southeast
RECENT LEASING TRANSACTIONSLEASING ACTIVITY
PROPERTY ADDRESS TENANT SIZE SF TYPE SUBMARKET
Midsouth Logistic IV HP 300,000 Renewal Southeast
Midsouth Logistic IV Sims Recycling Group 200,000 Renewal Southeast
211 Nesbitt Ln US Lumber 150,926 New North
611 Enon Springs Rd East Valeo 129,493 New Southeast
Interstate 24 Distribution Ctr #1 Xpedx 117,000 New Southeast
DEFINITIONS
Absorption - The net change in occupied space between the current quarter and the previous quarter, calculated by summing all the positive changes in occupancy and subtracting all the negative changes in occupancy.
Available SF - Space currently being marketed for lease or sublease.
Total Building SF - All single & multi tenant office buildings above 20,000 SF excluding medical, government and owner occupied.
Vacancy Rate - Percentage rate of the total amount of physically vacant space divided by the total amount of existing inventory.
P. 2 | COLLIERS INTERNATIONAL
MARKET REPORT | Q2 2011 | INDUSTRIAL | NASHVILLE
UPDATE Market Comparisons
INDUSTRIAL MARKET
SUBMARKET BLDGSTOTAL
INVENTORY SF
DIRECT VACANT
SF
DIRECT VACANCY
RATE
DIRECT VACANCY
RATE PRIOR QTR
SUBLEASE VACANCY
RATE
NETABSORPTION CURRENT QTR
ST
NET ABSORPTION
YTD SF
AVG ASKING RATE
EAST 306 26,285,394 5,147,120 19.6% 20.1% 0.4% 142,893 (109,778) $5.09
The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it.
www.colliers.com/Nashville
Accelerating success.
Jerry MieleDIR +1 615 850 2735
Affiliate Broker
Bill BuckleyDIR +1 615 850 2705
Affiliate Broker
Max SmithDIR +1 615 850 2722
Affiliate Broker
Terry Smith, CCIMDIR +1 615 850 2724
Partner
Tom Davis, SIORDIR +1 615 850 2730
Partner
ABOUT COLLIERS INTERNATIONAL – NASHVILLE Collier International Nashville is one of the largest full service commercial real
estate firms in the region. Its brokers provide a myriad of services to owners
and tenants with a commitment to excellence that has won them the respect
of local, national and international clients for many years. With more than 25
employees, the firm serves clients ranging from Fortune 500 corporations,
major banks and insurance companies to investors, private institutions and small
businesses.
Figure 1: Nashville Industrial Submarkets include North, East, Southest, Southwest, West and IBD.