Q1 2012 - Cincinnati Industrial

the knowledge reportcincinnati, oh

www.colliers.com/cincinnati

market indicators

*Projected change to Following Quarter

Q1 12 Q2 12*

VacancY

net aBsorPtion

construction — —

rental rate — —

Q1 2012 | industrial

oVerall VacancY rate

ABSORPTION UP AS INDUSTRIAL MARKET CONTINUES TO MOVE IN THE RIGHT DIRECTION

executiVe summarYthe greater Cincinnati industrial market started the year on a strong note, producing 706,211 square feet of positive net absorption for the first quarter of 2012. this positive momentum was carried over from 2011, as the fourth quarter finished on an upswing. the overall vacancy rate stands at 9.2% and the overall weighted asking rate for industrial properties in the first quarter was $3.31 per square foot.

northern kentuckYthe northern kentucky submarkets showed an impressive 438,011 square feet of net absorption. Most of this activity was tied to the Airport submarket, as this area posted 509,805 square feet of positive absorption. larger deals of note that contributed to this activity include Schwarz paper leasing 316,000 square feet of space at Airpark International distribution Center #1; Verst group logistics leasing 290,521 square feet of space at 1100 Burlington pike; and leanCor Supply Chain leasing 106,920 square feet of space at 2265 progress drive. rental rates at the Airport averaged $3.07 per square foot, while the Florence market was slightly higher at $3.26 per square foot.

suBurBan ohio suBmarketson the northern side of the river, tri-County/Union Centre led the way with 497,710 square feet of positive absorption. general Motors was the largest transaction of note in this submarket, as the company purchased a 394,480-square-foot building at 8752 Jacquemin drive that they were currently occupying. Most other submarkets on the ohio side showed modest gains, with the exception of lockland/evendale giving back 196,057 square feet of space. rental rates in the ohio submarkets ranged from $2.27 per square foot in hamilton to $4.76 per square foot in the western Corridor.

constructionon the construction side, one large speculative building is still under construction and several smaller build-to-suit projects are continuing to move forward. 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. 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.

9 5%

10.0%

10.5%

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

1Q 1

2

transactions are believed to be accurate but not guaranteed.

emPloYmentthe Bureau of labor Statistics announced good news for the market, as the U.S. unemployment rate continued to fall. while the validity of these government numbers can be debatable, it’s a good sign that companies are beginning to hire employees and put people back to work. the overall U-3 unemployment rate came in at 8.2% for March, down from 8.3% in January and February. In comparison, in october of 2010, the rate stood at 10.0%. ohio’s unemployment rate is at 7.6%, a nice sign that our state is a little healthier than the other 49 states across the country. As commercial real estate is tied directly to job growth, we hope these numbers continue to push us in a positive direction.

Forecastwhile the first quarter started strong, we expect the industrial market to level off again for the remainder of 2012. As mentioned in previous quarters, there are still large blocks of space in tri-County that have yet to hit the market. these spaces are listed as available for lease/sale, but are still occupied to some degree. the spaces includes Avon products on progress place, CeVA logistics on windisch road and the liz Claiborne Facility on Jacquemin drive. we should start to see those spaces become vacant in the next three quarters, which will increase the overall vacancy rate several basis points.

uPdate recent transactions

First Quarter actiVitY

ProPertY suBmarket tenant/BuYer size tYPe

8752 Jacquemin drive tri-County general Motors 394,480 Sale

11520 Mosteller road tri-County trident Capital 358,386 Investment Sale

Airpark International dC #1 nkY Schwarz paper 316,000 lease renewal

1100 Burlington pike nkY Verst group logistics 290,521 lease

3720 langley drive nkY levi Strauss & Co. 151,444 lease renewal

7585 empire drive nkY trident Capital 148,365 Investment Sale

7910-7920 kentucky drive nkY Corken Steel 131,329 Sale

375 northpointe drive hamilton/Fairfield prestige display & packing 123,524 lease renewal

2265 progress drive nkY leanCor Supply Chain 106,920 lease

1499 Jamike Avenue nkY Close the loop 81,200 lease

4115 thunderbird lane northwest trident Capital 70,000 Investment Sale

world park Building 8 tri-County rite rug 60,000 lease

9525 glades drive tri-County pivotek 51,070 lease

Covington Capital Building dayton general pet Supply ohio Valley 50,000 lease

106 Circle Freeway drive tri-County Mh equipment 43,805 Sale

1320 russell Street nkY Scott randall Systems, llC 35,000 lease renewal

300 distribution Circle hamilton/Fairfield Cincinnati grinding technologies 34,334 lease

9750 Crescent park tri-County k&w development 30,000 Sale

world park Building 1 tri-County target 19,200 lease

9422 Meridian way tri-County port logistics 19,200 lease

9431 Sutton place tri-County Cincinnati Abrasives 18,468 Sale

world park @ Union Centre 4 tri-County rockwell Automation 16,940 lease renewal

Crescent point Commerce Center tri-County wheels pro 16,000 lease renewal

7.00%

7.50%

8.00%

8.50%

9.00%

9.50%

10.00%

10.50%

11.00%

Jan-

09

Mar

-09

May

-09

Jul-0

9

Sep-

09

Nov-

09

Jan-

10

Mar

-10

May

-10

Jul-1

0

Sep-

10

Nov-

10

Jan-

11

Mar

-11

May

-11

Jul-1

1

Sep-

11

Nov-

11

Jan-

12

Ohio Unemployment Rate

US Unemployment Rate

unemPloYment

the knowledge report | Q1 2012 | industrial | cincinnati

P. 2 | colliers international

SUBMARKET Total Inventory Total Vacant SF Vacancy Rate Quarterly Absorption YTD Absorption Avg. Rate

Airport 27,221,161 2,445,013 9.0% 509,805 509,805 $3.07

Blue Ash 12,787,682 1,086,545 8.5% 68,667 68,667 $3.75

Kenton/Campbell County 5,845,329 100,900 1.7% 0 0 $3.90

Central/Midtown 47,423,206 4,051,790 8.5% (6,192) (6,192) $2.85

Covington 8,338,550 400,477 4.8% 33,773 33,773 $3.64

Eastern Corridor 12,650,115 2,823,082 22.3% (44,005) (44,005) $3.30

Florence 24,447,909 1,059,130 4.3% (105,567) (105,567) $3.26

Hamilton 7,972,378 648,296 8.1% (106,927) (106,927) $2.27

I-71 North Corridor 10,980,157 1,535,149 14.0% 76,343 76,343 $3.90

Lockland/Evendale 20,650,536 1,097,590 5.3% (196,057) (196,057) $2.85

I-75 North Corridor 21,991,003 1,965,268 8.9% (16,339) (16,339) $3.65

Tri-County/Union Centre 66,964,416 7,692,188 11.5% 497,710 497,710 $3.41

Western Corridor 7,126,143 324,516 4.6% (5,000) (5,000) $4.76

MARKET TOTALS 274,398,585 25,229,944 9.2% 706,211 706,211 $3.31

INDUSTRIAL SUBMARKET DATA

aVg. asking rates (Per sF-Full serVice gross)

$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

1Q 1

2

General Rate Flex Rate Distribution Rate

QuarterlY net aBsorPtion

squa

re F

eet

-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

1Q 1

2


colliers international | P. 3

ceo | PrinciPal: Shenan p. Murphy, CCIM+1 513 721 4200

Colliers International statistics are audited annually and may result in revisions to previously reported quarterly and final year-end figures

Colliers International | greater Cincinnati 425 walnut Street, Suite 1200Cincinnati, oh 45202

Industrial Services | Greater Cincinnati

INT’LAIRPORT

I-75 NORTH

TRI-COUNTY/UNION CENTRE

I-71 NORTHBLUEASHLOCKLAND/

EVENDALE

CENTRAL/MIDTOWN EASTERN

CORRIDOR

WESTERNCORRIDOR

KENTONCAMPBELLCOUNTY

COVINGTON

AIRPORT

FLORENCE

HAMILTON

www.colliers.com/cincinnati

Chuck A. Ackerman, CCIM, SIorBrokerage Senior Vice president

[email protected] +1 513 562 2266

John B. gartner, III, SIorBrokerage Senior Vice president

principal | Cincinnati


william k. keefer, SIorBrokerage Senior Vice president



Steve r. MillerBrokerage Vice president


erin M. Casey, gA-C, MICp™Senior Brokerage Associate


Michael e. daly, SIorBrokerage Senior Vice president



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• Over 12,300 professionals


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Q1 2012 - Cincinnati Industrial