THE KNOWLEDGE REPORT CINCINNATI, OH www.colliers.com/cincinnati MARKET INDICATORS *Projected Change to Following Quarter *Vacancy Rate increased in 4Q 11 due to a historical correction. Q4 11 Q1 12* VACANCY NET ABSORPTION CONSTRUCTION — — RENTAL RATE — — Q4 2011 | INDUSTRIAL OVERALL VACANCY RATE 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 that several midsize deals were completed, as opposed to one large deal accounting for all of the positive absorption. 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 square foot, while distribution space came in at $2.88 per square foot. Comparatively, general industrial space was recorded at $3.70 per square foot. NORTHERN KENTUCKY 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 lease at 7575 Empire Drive and Packaging Unlimited’s 48,176 square foot lease at 7130 New Buffington Road. SUBURBAN OHIO SUBMARKETS On the northern side of the river, the I-275 East Corridor submarket led the way in the fourth quarter 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 Plant in Batavia. The Blue Ash submarket also chipped in to help the cause, and added 267,319 square feet of positive absorption. 7.5% 8.0% 8.5% 9.0% 9.5% 4Q 09 1Q 10 2Q 10 3Q 10 4Q 10 1Q 11 2Q 11 3Q 11 4Q 11 7.5% 8.0% 8.5% 9.0% 9.5% 4Q 09 1Q 10 2Q 10 3Q 10 4Q 10 1Q 11 2Q 11 3Q 11 4Q 11 7.5% 8.0% 8.5% 9.0% 9.5% 4Q 09 1Q 10 2Q 10 3Q 10 4Q 10 1Q 11 2Q 11 3Q 11 4Q 11 7.5% 8.0% 8.5% 9.0% 9.5% 4Q 09 1Q 10 2Q 10 3Q 10 4Q 10 1Q 11 2Q 11 3Q 11 4Q 11
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
THE KNOWLEDGE REPORTCINCINNATI, OH
www.colliers.com/cincinnati
MARKET INDICATORS
*Projected Change to Following Quarter
*Vacancy Rate increased in 4Q 11 due to a historical correction.
Q4 11 Q1 12*
VACANCY
NET ABSORPTION
CONSTRUCTION — —
RENTAL RATE — —
Q4 2011 | INDUSTRIAL
OVERALL VACANCY RATE
STRONG FINISH ENDS THE YEAR ON A POSITIVE NOTE
EXECUTIVE SUMMARYThe 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 that several midsize deals were completed, as opposed to one large deal accounting for all of the positive absorption.
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 square foot, while distribution space came in at $2.88 per square foot. Comparatively, general industrial space was recorded at $3.70 per square foot.
NORTHERN KENTUCKYThe 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 lease at 7575 Empire Drive and Packaging Unlimited’s 48,176 square foot lease at 7130 New Buffington Road.
SUBURBAN OHIO SUBMARKETSOn the northern side of the river, the I-275 East Corridor submarket led the way in the fourth quarter 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 Plant in Batavia. The Blue Ash submarket also chipped in to help the cause, and added 267,319 square feet of positive absorption.
8.5%
9.0%
9.5%
7.5%
8.0%
8.5%
9.0%
9.5%
4Q 0
9
1Q 1
0
2Q 1
0
3Q 1
0
4Q 1
0
1Q 1
1
2Q 1
1
3Q 1
1
4Q 1
1
7.5%
8.0%
8.5%
9.0%
9.5%
4Q 0
9
1Q 1
0
2Q 1
0
3Q 1
0
4Q 1
0
1Q 1
1
2Q 1
1
3Q 1
1
4Q 1
1
500,000
1,000,000
1,500,000Quarterly Net Absorption
7.5%
8.0%
8.5%
9.0%
9.5%
4Q 0
9
1Q 1
0
2Q 1
0
3Q 1
0
4Q 1
0
1Q 1
1
2Q 1
1
3Q 1
1
4Q 1
1
1 000 000
-500,000
0
500,000
1,000,000
1,500,000Quarterly Net Absorption
865,230 SF
7.5%
8.0%
8.5%
9.0%
9.5%
4Q 0
9
1Q 1
0
2Q 1
0
3Q 1
0
4Q 1
0
1Q 1
1
2Q 1
1
3Q 1
1
4Q 1
1
$8General Flex Distribution
-1,000,000
-500,000
0
500,000
1,000,000
1,500,000
4Q 0
9
1Q 1
0
2Q 1
0
3Q 1
0
4Q 1
0
1Q 1
1
2Q 1
1
3Q 1
1
4Q 1
1
Quarterly Net Absorption
865,230 SF
7.5%
8.0%
8.5%
9.0%
9.5%
4Q 0
9
1Q 1
0
2Q 1
0
3Q 1
0
4Q 1
0
1Q 1
1
2Q 1
1
3Q 1
1
4Q 1
1
$
$5
$6
$7
$8General Flex Distribution
-1,000,000
-500,000
0
500,000
1,000,000
1,500,000
4Q 0
9
1Q 1
0
2Q 1
0
3Q 1
0
4Q 1
0
1Q 1
1
2Q 1
1
3Q 1
1
4Q 1
1
Quarterly Net Absorption
865,230 SF
7.5%
8.0%
8.5%
9.0%
9.5%
4Q 0
9
1Q 1
0
2Q 1
0
3Q 1
0
4Q 1
0
1Q 1
1
2Q 1
1
3Q 1
1
4Q 1
1
$2
$3
$4
$5
$6
$7
$8
4Q 0
9
1Q 1
0
2Q 1
0
3Q 1
0
4Q 1
0
1Q 1
1
2Q 1
1
3Q 1
1
4Q 1
1
General Flex Distribution
-1,000,000
-500,000
0
500,000
1,000,000
1,500,000
4Q 0
9
1Q 1
0
2Q 1
0
3Q 1
0
4Q 1
0
1Q 1
1
2Q 1
1
3Q 1
1
4Q 1
1
Quarterly Net Absorption
865,230 SF
7.5%
8.0%
8.5%
9.0%
9.5%
4Q 0
9
1Q 1
0
2Q 1
0
3Q 1
0
4Q 1
0
1Q 1
1
2Q 1
1
3Q 1
1
4Q 1
1
$2
$3
$4
$5
$6
$7
$8
4Q 0
9
1Q 1
0
2Q 1
0
3Q 1
0
4Q 1
0
1Q 1
1
2Q 1
1
3Q 1
1
4Q 1
1
General Flex Distribution
-1,000,000
-500,000
0
500,000
1,000,000
1,500,000
4Q 0
9
1Q 1
0
2Q 1
0
3Q 1
0
4Q 1
0
1Q 1
1
2Q 1
1
3Q 1
1
4Q 1
1
Quarterly Net Absorption
865,230 SF
Transactions are believed to be accurate but not guaranteed.
CONSTRUCTIONOn the construction side, one large speculative building is under contract and several smaller build-to-suit projects are underway. The speculative building is in Monroe, as IDI continues construction on its 553,338 square foot distribution center at 1100 Logistics Way.This building is expected to be completed in May of 2012. USUI International is still on track to finish their 127,000 square foot facility in Sharonville. Links Unlimited is working on a 60,000 square foot facility in Norwood; Eurostampa is completing a 75,000 square foot facility in Roselawn; and Z.F. Steering Systems has two buildings under construction in Florence.
Additional construction of speculative industrial space is not anticipated anytime soon, but we will continue to see build-to-suit projects hit our market as manufacturing continues to improve.
FORECASTThe strong finish of 2011 was great news for the Greater Cincinnati industrial market. Having 1.1 million square feet of positive net absorption is just what the market needed in its economic recovery. Although we saw a flurry of activity during the past three months, we expect this activity to slow down for most of 2012. There is slight concern with the Tri-County/Union Centre submarket, as over 2 million square feet has already surfaced and will become vacant next year. This includes Avon Products on Progress Place, CEVA Logistics on Windisch Road and the Liz Claiborne Facility on Jacquemin Drive. We are hopeful that industrial companies will continue to expand to help offset this expected negative absorption, making 2012 an overall good year.
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