1. Q2 2012 | INDUSTRIAL
GREATER COLUMBUS REGION
INDUSTRIAL TRENDS REPORT
Leasing and Construction Continue
INDUSTRIAL MARKET OVERVIEW
The Columbus industrial market recorded its fifth consecutive quarter of strong positive absorption.
More than 1.4 million square feet were absorbed this quarter. More than 750,000 square feet of
construction projects were completed, while another 425,000 square feet of construction began.
Major leases were signed by Jacobson Warehouse at 2450 Spiegel Drive for more than 455,000
square feet and Closed Loop Refining & Recovery leasing at 1675 Wakins Road for 289,000 square
feet.
MARKET INDICATORS
Q2 Q3
2012* 2012**
FORECASTS AND REFLECTION
VACANCY • Blackstone purchased a 65 property portfolio 227,480-square-foot 4401-4419 Equity Drive
from DEXUS Property Group which included were sold together in the same portfolio sale
NET ABSORPTION
six properties in the Columbus MSA. The for $19.6 million. The 156,641-square-foot
CONSTRUCTION — former 1,628,640-square-foot Whirlpool 2626 Port Road was sold for $2.3 million in
Warehouse at 6241 Shook Road in Lockbourne, this sale as well.
RENTAL RATES — — Ohio sold for $57.7 million. The 116,000-square- • Target began construction to expand its food
*Actual change from previous quarter foot 4343 Equity Drive, 144,850-square-foot distribution center in West Jefferson by
1901-1919 Dividend Drive, 227,480-square-foot 425,000 square feet. When completed, the
**Projected change from previous quarter
1614-1634 Westbelt Drive, and the facility will employ an additional 100 to 150
RENTAL RATES
PROPERTY TYPE VACANCY RATES OVER COMPLETIONS
WEIGHTED AVERAGE RENTAL RATES
Asking rental rates have
Rates for the Major Product Types
$7.00 17.0 2,500,000 generally been stable. Build-
$6.00
2.5 $2.20
16.0 2,000,000 to-suit construction has
$5.00
$2.15 added more than 2.2 million
2.0
$4.00 $2.10 15.0 1,500,000 square feet of space to the
$3.00 $2.05
1.5
14.0 1,000,000 market since third quarter
$2.00 $2.00
1.0 $1.95
2011. There are only 30
$1.00
13.0 500,000 spaces of 20,000 square feet
$0.00 $1.90
0.5
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 $1.85 Q2
Q1 12.0 0 or greater in R&D/Flex,
0 08 08 09 09 09 09 10 10 10 10 11 11 11 11 $1.80 12
12 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q Q2 Q3 Q4 Q1 Q2 mostly occurring in the
3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q10 4Q10
General Industrial R&D/Flex Warehouse/Dist. 11.0 08 08 09 09 09 09 10 10 10 10 11 11 11 11 12 12 (500,000) Southwest, Southeast, Union,
10.0 (1,000,000) and West submarkets. This
will start to affect price soon
9.0 (1,500,000) if leasing remains strong. The
1
8.0 5 10 15 20 25 30
(2,000,000) change in general asking
rates over the past year has
Completions Absorptions Total Market Vacancy Rate
been negligible.
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2. RESEARCH & FORECAST REPORT | Q2 2012 | INDUSTRIAL | GREATER COLUMBUS REGION
Delaware REGIONAL INDUSTRIAL ECONOMICS housing. Financing has become more readily
County
Union The Federal Reserve Bank of Cleveland reports available, except for speculative projects.
County
at least once a quarter in the Federal Reserve’s
North
Beige Book about the economic activity of the Freight volume was flat or moved slightly slower
Licking
Madison
County County fourth district, which includes the Columbus during May. Sectors driving demand included
Metropolitan Statistical Area (MSA). In June, the energy and transportation as well as seasonal
West East
Beige Book reported that economic activity had products. The outlook for the remainder of 2012
CBD grown at a moderate pace. Manufacturers remains positive, but most do not expect growth
reported that production was stable. Capacity will be as strong as predicted earlier in the year.
Southwest Southeast
Fairfield
utilization was flat as was new orders.
County
EMPLOYMENT
Pickaway County Freight transport volume had moved higher. The The Bureau of Labor Statistics reported
industries driving transport demand are energy manufacturing employment of 61,500 employees
The Columbus industrial market consists and metals. Volume is expected to continue in May which was an decrease of 1,400
of 10 suburban submarkets and the
growing at a moderate pace for the remainder of employees since January 2012. Year over year
Central Business District. The total
inventory for the region is 213 million the year. manufacturing is down by 4.4 percent. Trade,
square feet of space. transportation and utilities employment grew by
The Beige Book from July 2012 reported that 4,200 employees in May since January 2012,
economic activity continued to expand since the with 2.7 percent year over year employment.
April 2012 report. Manufacturers reported a Mining, logging and construction decreased by
slight rise in production. Nonresidential builders 1,100 employees in May from January 2012 but
saw stronger inquiries, especially from education, is down 2.4 percent year over year.
healthcare, manufacturing, and multi-family
MARKET ACTIVITY
SALES ACTIVITY
PROPERTY ADDRESS SALES DATE SALE PRICE SIZE SF GRANTOR GRANTEE PRICE / SF TYPE SUBMARKET
6241 Shook Road 06/27/2012 $57,700,000.00 1,628,640 D/P Rickenbacker LLC BRE/DP Columbus LLC $35.43 Warehouse Southeast
4343 Equity Drive 6/27/2012 $19,600.000.00 116,000 RPH Industrial LLC BRE/DP OH LLC - Flex/R&D West
for Porfolio
1901-1919 Dividend Drive 6/27/2012 Portfolio 144,850 RPH Industrial LLC BRE/DP OH LLC - Freezer/Cooler West
4401-4419 Equity Drive 6/27/2012 Portfolio 227,480 RPH Industrial LLC BRE/DP OH LLC - Warehouse West
1614-1634 Westbelt Drive 6/27/2012 Portfolio 227,480 RPH Industrial LLC BRE/DP OH LLC - Warehouse West
2626 Port Road 6/27/2012 $2,300.000.00 156,641 RPH Industrial LLC BRE/DP OH LLC - Warehouse Southeast
2001 Courtright Road 4/2/2012 $800,000.00 225,873 Tomasco Mulciber Inc. All A Cart Manufacturing - General Southeast
521 Marion Road 6/14/2012 $650,000.00 202,402 Marion Road Partners LLC 521 Marion Road LLC $3.21 Warehouse Southeast
777 James Road 5/31/2012 $3,100,000.00 137,885 Pennsylvania Railroad Co. HGI Ohio LLC $22.48 Bulk Warehouse East
8303 Green Meadows Drive 5/3/2012 $2,066,460.00 78,400 Charles Manofsky, Receiver Xigent8303 $26.36 Light Industrial North
8333 Green Meadows Drive 4/30/2012 $1,549,846.00 78,400 Green Meadow SWS LLC Developers Seven LLC $19.77 Light Industrial North
1625 Mound Street 6/7/2012 $1,400,000.00 70,910 Mid Ohio Food Bank 590 Van Buren LLC $19.74 Freezer/Cooler Southwest
1515 Universal Road 4/2/2012 $1,600,000.00 68,334 Metal Improvement Co Inc Bodycote Thermal Inc $23.41 Light Industrial Southeast
6951 Alan Schwartzwalder 5/17/2012 $1,695,000.00 60,000 MJR Enterprises INC All State Investments LC $28.25 Warehouse Southeast
LEASE ACTIVITY
PROPERTY ADDRESS LEASE DATE LEASE SF LESSEE ASKING PRICE (NNN) TYPE SUBMARKET
2450 Spiegel Drive 5/31/2012 455,667 Jacobson Warehouse - Warehouse - Distribution Southeast
1675 Watkins Road 5/10/2012 289,624 Closed Loop Refining & $1.95 Warehouse - Distribution Southeast
Recovery Inc
3500 Centerpoint Drive 6/25/2012 248,145 Confidential $3.25 Bulk Warehouse Southwest
5830 Green Pointe Drive 4/19/2012 194,989 Buckeye Diamond Logistics $1.00 Warehouse - Distribution Southeast
2425 Spiegel Drive 5/1/2012 135,000 NIFCO American Corporation $2.25 Warehouse - Distribution Southeast
6295 Commerce Center Drive 6/14/2012 87,000 PDSI $3.25 Warehouse - Distribution Southeast
6766 Pontius Road 6/25/2012 74,000 Confidential $3.15 Warehouse - Distribution Southeast
P. 2 | COLLIERS INTERNATIONAL
3. RESEARCH & FORECAST REPORT | Q2 2012 | INDUSTRIAL | GREATER COLUMBUS REGION
UPDATE Market Comparisons
INDUSTRIAL MARKET
Net Absorption Construction Asking Rental Rates
SUBMARKET Total SF Vacant SF Vacancy % Current Quarter Year-to-date Current Completions WH/Dist R&D/Flex
CBD 5,507,707 756,472 13.7 (56,643) (94,911) - - - $6.63
EAST 20,682,243 3,986,693 19.3 177,830 277,795 - - $2.90 $5.83
FAIRFIELD 6,441,842 126,755 2.0 134,000 174,920 - - $4.00 $6.90
LICKING 19,607,493 893,989 4.6 - 109,000 - 774,563 $2.97 -
MADISON 8,148,397 - 0.0 - - 425,000 - - -
NORTH 16,569,909 1,236,806 7.5 98,305 154,387 - - $2.73 $4.68
NORTH DELAWARE 9,146,849 988,399 10.8 55,358 39,608 - - $3.10 $7.10
PICKAWAY 3,550,850 84,250 2.4 (10,400) (22,750) - - $2.95 -
SOUTHEAST 64,127,997 7,882,685 12.3 1,136,227 2,022,366 - 125,000 $2.61 $3.47
SOUTHWEST 17,669,037 1,100,255 6.2 63,200 192,033 - - $3.05 $3.38
UNION 6,333,817 359,905 5.7 4,000 2,860 - - - $4.56
WEST 35,406,438 3,943,676 11.1 (171,011) (151,309) - - $2.27 $4.40
TOTALS 213,192,579 21,359,885 10.0 1,430,866 2,703,999 425,000 899,563 $2.65 $4.73
Net Absorption Construction Asking Rental Rates
SUBMARKET Total SF Vacant SF Vacancy % Current Quarter Year-to-date Current Completions By Product Type
R&D/FLEX 20,280,125 2,856,990 14.1% (31,255) 297,144 - - $4.73
GENERAL INDUSTRIAL 71,403,624 5,199,575 7.3% 280,312 355,674 - 659,563 $2.81
WAREHOUSE/ 121,508,830 13,303,320 10.9% 1,181,809 2,051,181 425,000 240,000 $2.65
DISTRIBUTION
TOTALS 213,192,579 21,359,885 10.0% 1,430,866 2,703,999 425,000 774,563 $2.95
QUARTERLY COMPARISON AND TOTALS
Net Absorption Construction Asking Rental Rates
QUARTER, YEAR Total SF Vacant SF Vacancy % Current Quarter Year-to-date Current Completions ($)
Q1, 2012 212,418,016 22,790,751 10.7 1,273,133 1,273,133 898,000 - $3.04
Q4, 2011 212,618,117 24,067,884 11.3% 462,187 3,497,841 898,000 175,000 $3.09
Q3, 2011 212,243,016 24,461,112 11.5 961,800 3,035,654 1,073,000 1,805,000 $3.02
Q2, 2011 210,638,117 25,445,412 12.1% 2,447,123 2,073,854 1,910,000 (253,051) $2.84
CONSTRUCTION
McGraw-Hill Construction’s most
recent report showed residential and
nonresidential future construction in the
eight-county region combined increased
by 16 percent to $143.6 million, March
2012. This up from 123.7 million in
March 2011. Regional nonresidential
development fell by 15 percent to $64.4
million from $75.4 million a year ago.
COLLIERS INTERNATIONAL | P. 3
4. RESEARCH & FORECAST REPORT | Q2 2012 | INDUSTRIAL | GREATER COLUMBUS REGION
CENTRAL BUSINESS DISTRICT SOUTH
The southern submarkets are Pickaway and
The Central Business District (CBD) recorded
56,000 square feet of negative absorption in the Fairfield counties. Fairfield absorbed 134,000 522 offices in
second quarter, mostly due to a vacancy at 385 square feet and Pickaway lost a marginal 10,400
square feet.
62 countries on
Mount Vernon Avenue. Absorption was strong
throughout 2011, and there are still 9 spaces of 6 continents
10,000 square feet vacant. Three spaces have SOUTHWEST
The Southwest submarket showed absorption of United States: 147
more than 100,000 square feet available. Canada: 31
63,000 square feet, bringing the vacancy rate Latin America: 19
EAST down to 6.2 percent. Large leases occurred at Asia Pacific: 201
3420 Urbancrest Industrial Drive and 1641 EMEA: 118
The submarkets comprising eastern Columbus Harmon Avenue.
are East and Licking County. The Licking • $1.8 billion in annual revenue
submarket absorption was flat. In the East, WEST
• 1.25 billion square feet under
Legacy Flooring moved out of 65,000 square management
feet at 3445 Millenium Court. An owner/user The submarkets on the west side of Franklin • Over 12,500 professionals
purchased 2001 Courtright Road, absorbing county are West, Madison and Union. Union
212,000 square feet, and Merlin Packaging county gained a marginal 4,000 square feet.
UNITED STATES:
leased 24,000 square feet at 861 Taylor Road.
The West submarket showed 171,000 square Columbus
Richard B. Schuen SIOR CCIM
All of the construction in Licking County last feet of negative absorption mainly coming from
CEO | Principal | Columbus
quarter has been completed. Quebec Ontario- the vacancy of a casket manufacturer at 315 Two Miranova Place
based KDC completed its 240,000-square-foot Phillipi Road Suite # 900
Columbus, Ohio 43215
building. Mississauga, Canada-based Axium
Plastics completed its 110,000-square-foot Madison showed no leasing activity but TEL +1 614 410 5612
facility, employing 165. Construction has been construction has begun on expanding the Target
completed on Pizzuti’s 303,000-square-foot Corp. distribution center by 425,000 square
Leslie Hobbs
speculative building. Sonoco completed its feet.
Director of Marketing | Ohio
120,000-square-foot facility as well. Two Miranova Place
MARKET INTEL Suite # 900
Columbus, Ohio 43215
NORTH Market Activity Volume is the sum of the
TEL +1 614 410 5640
The submarkets comprising northern Columbus absolute value of each absorption change in
are North and North Delaware. The North the market. It tells us a little more about what
submarket gained 98,000 square feet from exactly happened to the market behind the Jonathan Schuen
absorption number. The Market Activity Volume Research Analyst
numerous leases, including an owner/user Two Miranova Place
purchasing 7060 Huntley Road and Solar Planet was 2,743,340 square feet. This is average for
Suite # 900
leasing 24,000 square feet at 640 Dearborn second quarters in the past three years. Columbus, Ohio 43215
Park Lane. North Delaware absorption was TEL +1 614 437 4495
55,000 square feet on the back of owner/user There are 51 buildings with vacant contiguous
Xcigent occupying 32,000 square feet at 8303 space equal to or greater than 100,000 square
Green Meadows Drive. feet left in the Columbus market. 11 were built
since 2000 and 10 of those are warehouse/
SOUTHEAST distribution. These vacancies will keep This document/email has been prepared by Colliers
International for advertising purposes. Colliers
warehouse/distribution asking rates low while International statistics and data are audited annually and
The Southeast submarket drove the market for they last. may result in revisions to previously reported quarterly
the second quarter in a row with the largest and final year-end figures. Sources include Columbus
Dispatch, Business First, Xceligent, CoStar, Chain Store
positive absorption of 1.1 million square feet, TENANTS IN THE MARKET Age, Wall Street Journal, Bureau of Labor Statistics,
bringing the vacancy rate down to 12.3 percent. The types of tenant seen most frequently are
Bureau of Economic Analysis, Gallup and the Cleveland
Federal Reserve.
bulk warehouse users seeking more than
Jacobson, PDSI, Closed Loop, Buckeye Diamond 200,000 square feet of Class A space; third
Logistics, NIFCO all combined for more than party logistics, auto parts distributors, healthcare,
1,000,000 square feet of positive absorption. and tire users. There are currently at least 21
companies looking for 100,000 square feet or
Construction has been completed on Pizzuti’s greater in Columbus, and at least 39 companies
125,000-square-foot facility for MBM in looking for 15,000 up to 99,999 square feet of
Groveport at 2240 Creekside Parkway. space.
Accelerating success.
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