MARKETBEAT
INDUSTRIAL SNAPSHOT
SAVANNAH, GA
Q4 2012
A Cushman & Wakefield Alliance Research Publication
Gilbert & Ezelle
104 West State Street, Suite 220
Savannah, Georgia 31401
www.cushmanwakefield.com/knowledge
For more information, contact:
Stephen Ezelle, Partner
912 236 8992
[email protected]
Q4 2012
Y-O-Y
CHANGE
Overall Vacancy
12.5%
11.6%
-0.9pp
Direct Asking Rents (psf/yr)
$3.85
$3.73
-3.1%
1,029,876 1,297,040
25.9%
YTD Leasing Activity (sf)
12 MONTH
FORECAST
OVERALL RENTAL VS. VACANCY RATES
$4.20
25.0%
$4.10
20.0%
$4.00
15.0%
$3.90
10.0%
$3.80
5.0%
$3.70
$3.60
0.0%
Q4 09 Q2 10 Q4 10 Q2 11 Q4 11 Q2 12 Q4 12
OVERALL NET RENTAL RATE
OVERALL VACANCY RATE
2009
2010
LEASING ACTIVITY
2011
0.43
1.29
1.4
1.2
1.0
0.8
0.6
0.4
0.2
0.0
0.44
OVERALL OCCUPIER ACTIVITY
1.03
The bulk of the vacancy in the Savannah market continues to be
attributable to the speculative construction of large
distribution/warehouse space from 2003 to 2008 which resulted in a
total inventory in buildings of greater than 100,000 sf of 25.9 million
square feet (msf). This sector is predominantly non-owner occupied
Q4 2011
0.69
VACANCY IN BIG BOX WAREHOUSES
STATS ON THE GO
0.77
Savannah’s distribution warehouse sector continues to recover since
the exponential increase in speculative construction of large
distribution warehouse space resulted in a peak vacancy rate of 19%
in Q2 2009. The current overall vacancy rate of 11.6% represents a
0.9 percentage point decrease since Q4 2011 as we have seen a slight
increase in overall leasing activity mainly from 3PL users in the
market. Asking rents are expected to level off in 2013 after several
years of decline. Notable activity in the market includes several cold
storage facilities to include Nordic’s pending completion of a 400,000square foot (sf) facility and Georgia Cold Storage nearing completion
of the redevelopment of a 176,000-sf warehouse in SPA Industrial
Park.
The outlook for 2013 is favorable as Savannah’s location, dynamic rail
and road infrastructure and the availability of quality land for
development within close proximity to the Port should continue to
attract major manufacturers and warehouse users to the market. We
expect the majority of leasing activity in 2013 to be attributed to 3PL
related users finalizing leases in the 100,000 to 200,000-sf range.
0.15
RECENT ACTIVITY
OUTLOOK
0.51
Throughout 2012, the Georgia Ports Authority has continued its third
consecutive year of double digit growth, reporting record cargo
volumes in 2012 and gaining market share faster than any other port
in the nation for the last eight years. The Georgia Ports Authority
moved a record 2.98 million TEU’s in fiscal year 2012 and was ranked
second behind the Port of Los Angeles in container export volume,
making it one of the most balanced ports in the country. The long
term dynamics of the Ports of Savannah and Brunswick are projected
to be very favorable as a result of the improvements underway at the
Panama Canal and pending Savannah Harbor Deepening Project which
received its Record of Decision from the U.S. Corps of Engineers in
October. The Record of Decision provides final approval for the
project to deepen the harbor from 42 to 47 feet, allowing Post
Panamax Vessels to call on the port at all stages of the tide.
space and consists of 17.1 msf constructed since 2003 which is
currently 16.2% vacant and includes 1.03 msf currently available for
sublease.
psf/yr
Savannah’s overall economy continues to
improve for the second consecutive quarter
with gains in employment, port activity and
tourism growth. The metro region’s stability
and growth can be attributed to its economic
diversity including the nation’s fourth busiest container port, a strong
manufacturing and distribution employment base, the military
complexes at Fort Stewart and Hunter Army Airfield, tourism, two
regional hospitals and the 40,000 plus area college students and
continued influx of retirees and pre-retirees.
msf
ECONOMIC OVERVIEW
2012
USER SALES ACTIVITY
The market terms and definitions in this report are based on NAIOP standards. No
warranty or representation, express or implied, is made to the accuracy or completeness
of the information contained herein, and same is submitted subject to errors, omissions,
change of price, rental or other conditions, withdrawal without notice, and to any special
listing conditions imposed by our principals.
© 2013 Cushman & Wakefield, Inc. All rights reserved.
1
SAVANNAH, GA
SUBMARKET
INVENTORY
Downtown/Eastside
OVERALL
VACANCY
RATE
YTD LEASING
ACTIVITY
YTD USER
SALES
ACTIVITY
UNDER
CONSTRUCTION
YTD
CONSTRUCTION
COMPLETIONS
DIRECT WEIGHTED
YTD OVERALL
NET ABSORPTION
AVERAGE NET
RENTAL RATE
MF
OS
W/D
3,302,474
1.6%
22,800
0
0
0
22,800
$0.00
$6.56
$0.00
Port Corridor
14,077,074
9.1%
221,680
0
0
0
(206,856)
$0.00
$6.76
$3.76
Crossroads/Dean Forest
23,838,509
14.4%
338,780
446,629
450,000
278,700
189,480
$3.50
$7.87
$3.46
Southside/Highway 17
2,327,432
9.8%
503,780
0
0
0
316,030
$0.00
$6.95
$4.08
Westside
2,107,785
16.9%
210,000
0
400,000
0
226,000
$0.00
$8.88
$3.50
45,653,274
11.7%
1,297,040 446,629
850,000
278,700
547,454
$3.50
$7.50
$3.57
TOTALS
* RENTAL RATES REFLECT ASKING $PSF/YEAR
MF = MANUFACTURING OS = OFFICE SERVICE W/D = WAREHOUSE/DISTRIBUTION
MARKET HIGHLIGHTS
Significant 2012 Lease Transactions
SUBMARKET
TENANT
PROPERTY TYPE
SQUARE FEET
2385 Tremont Road
Southside/Highway 17
Ameriwood/Dorel
Warehouse/Distribution
338,000
151 Portside Court
Crossroads/Dean Forest
Distribution Services International
Warehouse/Distribution
250,000
104 Norwest Court
Westside
APC
Warehouse/Distribution
210,000
175 Brampton Road
Port Corridor
Distribution Services International
Warehouse/Distribution
190,000
2385 Tremont Road
Southside/Highway 17
Osburn Hessy Logistics (OHL)
Warehouse/Distribution
137,280
75 Ross Road
Downtown/Eastside
M&A Supply
Warehouse/Distribution
22,800
176 Pine Barren Road
Crossroads/Dean Forest
Snider Fleet Solutions
Warehouse/Distribution
22,500
Significant 2012 Sale Transactions
SUBMARKET
BUYER
PURCHASE PRICE / $PSF
SQUARE FEET
102 & 106 Eli Whitney Boulevard
Crossroads/Dean Forest
Georgia Cold Storage
$5,000,000 / $28
180,129
80 Coleman Boulevard
Crossroads/Dean Forest
80 Coleman, LLC
$4,605,000 / $36
129,000
242 Jimmy Deloach Parkway
Crossroads/Dean Forest
KPC Management
$3,511,200 / $28
125,400
Significant 2012 Construction Completions
SUBMARKET
MAJOR TENANT
COMPLETION DATE
40 Sonny Perdue Boulevard
Crossroads/Dean Forest
The Judge Organization
Q2 2012
Significant Projects Under Construction
SUBMARKET
MAJOR TENANT
COMPLETION DATE
Gulfstream Road
Crossroads/Dean Forest
Gulfstream Aerospace
Q4 2013
450,000
500 Jimmy Deloach Parkway
Westside
Nordic
Q2 2013
400,000
SQUARE FEET
266,700
SQUARE FEET
* RENEWAL - NOT INCLUDED IN LEASING ACTIVITY STATISTICS
Gilbert & Ezelle
104 West State Street, Suite 220
Savannah, Georgia 31401
www.cushmanwakefield.com/knowledge
For more information, contact:
Stephen Ezelle, Partner
912 236 8992
[email protected]
The market terms and definitions in this report are based on NAIOP standards. No
warranty or representation, express or implied, is made to the accuracy or completeness
of the information contained herein, and same is submitted subject to errors, omissions,
change of price, rental or other conditions, withdrawal without notice, and to any special
listing conditions imposed by our principals.
© 2013 Cushman & Wakefield, Inc. All rights reserved.
2