Q3 2013 | Industrial
Greater Columbus Region
Industrial Trends Report
A Rising Tide Of Construction
Industrial Market Overview
The Columbus industrial market has recorded positive net absorption ten of the past eleven quarters, as
1,732,858 square feet were absorbed this quarter. The vacancy rate now stands at a historical low of 6.4
percent. Central Ohio has not seen construction volumes this high in over five years (since the third quarter
of 2008), as the market has over 3.2 million square feet of warehouse distribution space under construction.
Significant leases were signed by a confidential group for a 580,000 square foot build-to-suit at 5330
Centerpoint Parkway, and CTDI at 6100 Opus Road for 122,000 square feet. Exel expanded into 109,148 of
warehouse distribution space at 2120 Creekside Parkway. Hackman Capital purchased three buildings off
Roberts Road and two on Gantz Road in Grove City (611,573 square feet) from CALSTR’s for $20.8 million
($34 per square foot). Buckeye Diamond Logistics purchased 4300 Janitrol Road (491,971 square feet)
from Miller Investments Co. for $4.9 million ($10 per square foot).
market indicators
Q3
Q4
2013*
2013**
Forecasts and Reflection
• Sales continue to be a big storyline throughout 2013, and the third quarter showed no signs of a slowdown.
Loeb Electric purchased a 261,812-square-foot building at 1800 East Fifth Avenue in Grandview for $1.95
million. Northbrooke Corporate Center located at 8220-8270 Green Meadows Drive in Lewis Center, sold
to Rage Corporation for $3.7 million ($43 per square foot).
Vacancy
Net absorption
• Due
to historically low vacancy rates, speculative construction projects continue to gain momentum.
Pizzuti Cos. broke ground on 253,664 square feet of warehouse space at Creekside XI in Obetz. One-third
of the distribution center is already filled. The Creekside X tenant, CME Wire and Cable, leased 85,616
square feet. The Class A property will seek additional tenants in the 50,000 to 100,000 square foot range
to fill the remaining 168,000 square feet. Exxcel Project Management delivered 478,053 square feet of
speculative warehouse space this quarter on Centerpoint Parkway at Rickenbacker.
construction
Rental Rates
*Actual change from previous quarter
**Projected change from previous quarter
Weighted Average REntal Rates
Rates for the Major Product Types
$7.00
•
In the third quarter, the market saw over 1,549,936 square feet of warehouse space completed. Deliveries
of this magnitude have been seen only one other quarter since the financial meltdown in 2008. Prologis
completed a 766,633 square foot distribution center in Etna Township for Navarre, and FedEx completed
its 305,250 square foot distribution center on Pontius Road at Rickenbacker.
Rental rates
Vacancy Rates Over Completions and Absorptions
16.0
2,500,000
15.0
2,000,000
$6.00
14.0
$5.00
$4.00
1,500,000
13.0
$3.00
$2.00
1,000,000
12.0
$1.00
500,000
11.0
$0.00
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
08 08 09 09 09 09 10 10 10 10 11 11 11 11 12 12 12 12 13 13 13
General Industrial
R&D/Flex
Warehouse/Dist.
10.0
9.0
0
3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
08 08 09 09 09 09 10 10 10 10 11 11 11 11 12 12 12 12 13 13 13
(1,000,000)
8.0
(1,500,000)
7.0
(2,000,000)
6.0
Completions
www.colliers.com/columbus
(500,000)
Absorptions
Total Market Vacancy Rate
Asking rental rates have
remained stable during most of
2013.
A slight uptick in
warehouse/distribution rates,
and modest increases in general
industrial
rates,
can
be
attributed to a tightening market,
as vacancy rates are at
historical lows. Buyers and
tenants are pressured with
wanting to grow cautiously, and
ways to achieve that, without
losing out on
prime
opportunities that are hard to
come by as supply for
investments dwindles. Overall,
concessions
continue
to
decrease as larger distribution
centers are in short supply.
research & forecast report | Q3 2013 | industrial | Greater Columbus Region
Regional industrial economics
Delaware
County
Union
County
North
Licking
County
Madison
County
East
West
CBD
Southwest
Southeast
Fairfield
County
Pickaway County
The Columbus industrial market consists
of 10 suburban submarkets and the Central
Business District. The total inventory for the
region is 213 million square feet of space.
The types of tenant seen most frequently are
40,000-70,000 square foot light warehouse
and Flex/R&D users. Demand from bulk
warehouse and distribution users seeking
more than 200,000 square feet is beginning
to subside, but will continue to drive the
market. Auto suppliers, technology companies
(e-commerce distributors, internet based
retailers and third party logistic firms) are also
active in the region.
The Federal Reserve Bank of Cleveland reports at least
once a quarter in the Federal Reserve’s Beige Book
about the economic activity of the fourth district, which
includes the Columbus Metropolitan Statistical Area
(MSA). At the beginning of August, the Beige Book
reported that economic activity had grown at a modest
pace. Manufacturing orders and production were
steady or higher. In nonresidential construction, sales
of new and existing homes were above last years
levels, and builders saw an overall pick-up in business.
Manufacturing showed that demand in the housing,
motor-vehicle, and oil and gas industries was growing
at a robust pace. Compared to a year ago, manufacturing
production levels are similar or higher. However,
many are cautiously optimistic and uneasy about fiscal
issues and implications of the Affordable Care Act on
their businesses. Steel producers and service centers
reported that shipping volume is increasing, but at a
very slow rate. Auto production recovered in August
on a month-over-month basis as motor-vehicle
assembly plants returned to normal production
schedules. Compared to a year ago, motor-vehicle
production figures revealed a sizeable increase. Only a
few manufacturers reported that they are moving
forward with capacity expansion plans, while others
feel the need to expand capacity, but they will not
proceed because of uncertainty about the economy.
Shale-gas activity is showing signs of moderating due
to low natural gas prices; still, production is at historic
highs. Output at coal mines trended lower. The rate of
growth in freight volume has slowed. Applications for
business credit were flat, while consumer credit
demand rose slightly.
Employment
According to the 2013 McGladrey Manufacturing and
Distribution Monitor, nearly 85 percent of Ohio’s
middle market manufacturers surveyed are optimistic
about business in 2013, up from 67 percent last year.
Meanwhile 78 percent anticipate net income to
increase in the next 12 months and 65 percent expect
to hire.
The region reported manufacturing
employment of 66,800 employees in August which
was an increase of nearly 200 employees from the
past quarter. Over the last 12 months, the hottest
manufacturing sectors for jobs were transportation
equipment, food manufacturing, and plastics and
polymers. Trade, transportation, and utilities
employment increased by 2,200 employees in August
since May. Over the past year, the industry has
effectively seen a increase of 1,100 employees with a
60 basis point employment upturn. Mining, logging,
and construction increased by 900 employees in
August since May.
Market Activity
sales activity
Property Address
sales date
sale price
Hackman Capital Affiliate
7/3/2013
$20,807,800
(Former CALSTR'S Porfolio)
4300 Janitrol Road
size SF
Grantor
Grantee
Price / Sf
type
submarket
610,698
Firstcal Industrial
Hackman Capital Affiliate
$34.07
Investment
West/SW
Miller Investments Co
Buckeye Diamond Logistics
$10.08
Owner/User
West
(5 buildings)
9/10/2013
$4,990,000
491,971
2035 Innis Road
9/13/2013
$1,575,000
355,760
Columbus Industrial
Calypso Logistics
$4.42
Owner/User
East
1800 East Fifth Avenue
7/11/2013
$2,375,000
215,260
1800 Fifth Avenue Holdings
Loeb Electric
$11.03
Owner/Invest
CBD
2120-2138 New World Drive
9/6/2013
$2,325,000
121,200
Prologis Trust
Weston Inc.
$19.18
Investment
Southeast
8220-8270 Green Meadows Dr
9/12/2013
$3,730,000
87,457
SUG S Revenge Ltd
Rage Corporation
$42.64
Owner/Invest
North Delaware
7465 Worthington Galena Road
9/26/2013
$1,545,000
53,871
Tess Miranda and Associates
Martin Gross Family Ltd
$28.67
Owner/Invest
North
6845 Commerce Court Drive
7/1/2013
$1,525,000
30,182
RDT Partnership
Comfy Couch
$50.43
Owner/User
East
3830 Lacon Road
9/25/2013
$735,000
25,546
Dennis Enterprises Ltd
APO Real Estate II LLC
$28.77
Owner/User
West
Lease activity
Property Address
Lease Date
Lease sf
Lessee
Asking price (NNN)
type
Submarket
175 Heritage Drive
9/1/2013
766,633
Navarre
Build to Suit
Warehouse-Distribution
Licking
5330 Centerpoint Parkway
9/1/2013
580,000
Confidential
Build to Suit
Warehouse-Distribution
Southeast
6100 Opus Road
9/1/2013
122,000
CTDI
$3.25
Warehouse-Distribution
Southeast
2120 Creekside Parkway
9/17/2013
109,148
Exel
$3.25
Warehouse-Distribution
Southeast
3180-3880 Urbancrest Industrial Parkway
8/21/2013
85,310
Crane Logistics
$2.75
Warehouse-Distribution
Southwest
520 Industrial Mile Road
7/10/2013
64,574
Special Design Products
$2.00
Warehouse-Distribution
Southwest
1001 Distribution Drive
8/26/2013
61,500
Furniture Warehouse
$1.50
Warehouse-Distribution
Southwest
1798 Frebis Avenue
8/27/2013
51,926
Star Packaging
$1.75
Warehouse-Distribution
Southeast
2177-2255 Westbelt Drive
7/25/2013
36,658
Advanced Industry Supplies
$2.75
Warehouse-Distribution
West
2249 Westbrooke Drive
9/5/2013
29,797
Coinmach
$2.85
Warehouse-Distribution
West
p. 2
| Colliers International
research & forecast report | Q3 2013 | Industrial | Greater Columbus Region
update
Market Comparisons
Industrial market
Net Absorption
Submarket
Total SF
Vacant SF
Vacancy %
Current Quarter
Year-to-date
CBD
5,335,716
126,070
2.3%
249,742
301,926
Construction
Current
Asking Rental Rates
Completions
WH/Dist
-
R&D/Flex
$4.75
East
20,442,133
1,608,751
7.8%
57,727
11,642
-
$2.51
$5.86
Fairfield
6,114,387
132,931
2.1%
(66,176)
(68,431)
30,000
-
$4.00
$6.50
Licking
19,928,945
1,502,939
7.5%
816,633
168,767
550,000
766,633
$2.76
Madison
8,576,748
-
0.0%
-
-
985,000
-
North
16,839,944
768,333
4.5%
161,879
524,908
125,000
-
$3.77
$5.50
$2.98
$7.00
783,303
$2.71
$3.44
$2.80
North Delaware
8,796,109
510,186
5.8%
29,796
52,380
-
Pickaway
3,602,146
17,006
0.4%
66,350
67,244
-
Southeast
65,019,842
5,857,354
9.0%
13,251
1,424,347
835,000
SOUTHWEST
17,512,083
921,010
5.2%
240,684
190,207
400,000
-
Union
6,299,770
287,920
4.5%
4,500
122,060
300,000
-
$3.74
$6.65
West
34,873,110
1,828,874
5.2%
158,472
488,196
12,000
-
$2.46
$4.90
TOTALS
213,543,178
13,561,374
6.4%
1,732,858
3,283,246
3,237,000
1,549,936
$2.70
$4.86
Property Type
Total SF
Vacant SF
Vacancy %
Current Quarter
Net Absorption
Year-to-date
Construction
Asking Rental Rates
Current
Completions
By Product Type
r&D/Flex
20,234,273
1,922,065
9.5%
364,201
694,304
-
$4.90
General industrial
70,071,075
3,462,034
4.9%
136,167
(267,979)
30,000
-
$3.22
Warehouse/
123,237,830
8,177,275
6.6%
1,232,490
2,856,921
3,207,000
1,549,936
$2.70
213,543,178
13,561,374
6.4%
1,732,858
3,283,246
3,237,000
1,549,936
$3.05
distribution
Totals
quarterly comparison and totals
Net Absorption
Construction
Asking Rental Rates
Quarter, year
Total SF
Vacant SF
Vacancy %
Current Quarter Year-to-date
Current
Completions
($)
Q2, 2013
212,366,316
14,474,876
6.8%
1,444,523
1,204,722
2,579,936
-
$3.12
Q1, 2013
212,282,591
16,810,752
7.9%
(309,001)
(309,001)
1,233,303
90,800
$2.92
Q4, 2012
211,821,516
16,517,649
7.8%
1,455,132
4,938,885
924,103
448,655
$2.99
Q3, 2012
211,027,622
19,227,318
9.1%
757,254
3,461,253
1,259,655
-
$2.87
Development
Cyclone Power Technologies Inc. has
secured a facility at 1858 Cedar Hill
Road in Lancaster where it will
manufacturer its new Waste Heat
Engine. The Florida-based company
landed in Central Ohio after partnering
with Ohio State University’s Center for
Automotive Research. The renovation
is expected to be completed by October
with full production of 1,500 engines
per month starting in 2014. The
$500,000 investment will create more
than 80 new jobs over the next three
years.
Colliers International |
p. 3
research & forecast report | Q3 2013 | industrial | Greater Columbus Region
Central Business District
The Central Business District (CBD) experienced strong
positive absorption of 249,742 square feet in the second
quarter. A $1.95 million owner/user sale by Loeb Electric
of a 261,812 square foot warehouse building at 1800 E.
Fifth Ave. kept the downtown submarket from
experiencing negative absorption after a 8,000 square
foot vacancy at 1239 Stimmel Road. Absorption as a
whole has been strong for ten consecutive quarters in the
CBD, with just two spaces of 10,000 square feet vacant,
one of which has more than 100,000 square feet
available.
East
The submarkets comprising eastern Columbus are East
and Licking County. The Licking submarket recorded
816,633 square feet of positive absorption after Navarre
moved into its new 766,633 square foot facility at 175
Heritage Drive, and Goodyear Tire leased 50,000 square
feet at 94 Integrity Drive. Over 550,000 square feet of
construction is still underway in the Etna Corporate Park.
Ascena Retail Group recently broke ground on a $72
million expansion project that will add 225 jobs by 2017.
The East submarket performed well for the second
straight quarter after posting 57,727 square feet of
positive absorption in the third quarter. Numerous owner
user sales are responsible for the turn around. The East’s
vacancy rate has decreased 200 basis points since the
beginning of the year to 7.8 percent. The submarket is
still significantly better off than previous years, when
vacancy rates were lingering in the 20 percent range.
Comfy Couch purchased and now occupies the 30,182square-foot warehouse building at 6845 Commerce
Court Drive for $1.6 million ($51 per square foot).
Batesville Casket leased 24,000 square feet of prime
warehouse space at 915 Taylor Road.
North
The submarkets comprising northern Columbus are
North and North Delaware. The North submarket
recorded a significant 161,879 square feet of positive
absorption as Projector Supercenter absorbed 14,710
square feet of warehouse space at 7465 Worthington
Galena Road, while Kitchen Craft and Stone City leased
19,402 square feet of flex space at 7029 Huntley Road.
The Martin Gross Family Ltd purchased a 53,871 square
foot building at 7465 Worthington Galena Road for $1.5
million ($29 per square foot).
The North Delaware
submarket recorded 29,796 square feet of positive
absorption.
Southeast
The Southeast drove the market for most of 2012, and the
trend continued throughout the first half of 2013. This
quarter however the Southeast recorded an insignificant
13,251 square feet of positive absorption, after posting
nearly 1.5 million square feet of positive absorption in the
first two quarters. The vacancy rate now stands at 9
percent.
www.colliers.com/columbus
The highlight of the quarter was Prologis’ sale of a
121,200 square foot warehouse building at 2120-2138
New World Drive to Weston Inc. for $2.3 million ($20 per
square foot). Major leases signed include confidential
build-to-suit (580,000 square feet), CTDI (122,000
square feet), Exel (109,148 square foot expansion), Star
Packaging (51,926 square feet). (See Lease Activity on
Page 2). Major vacancies include Rumpke at 2221 John
Glenn (58,056 square feet), and Faro Logistics at 2000
Corvair Boulevard (49,619 square feet of temporary
space).
Southwest
The Southwest submarket experienced relatively
significant positive absorption of 240,684 square feet,
and boasts an impressive 5.2 percent vacancy rate.
Major leases signed include Crane Logistics at 3180-3880
Urbancrest Industrial Parkway (85,310 square feet),
Special Design Products at 520 Industrial Mile Road
(64,574 square feet), and Furniture Warehouse at 1001
Distribution Drive (61,500 square feet). MSC Hardware
broke ground on its 400,000 square foot warehouse.
West
The submarkets on the west side of Central Ohio are
West, Madison and Union. The West submarket continues
its impressive run recording 158,472 square feet of
positive absorption. This created an astonishing 100
basis point drop in vacancy to 5 percent. Advanced
Industry Supplies signed a 36,658-square-foot lease at
2177-2255 Westbelt Drive, and Coinmach signed a 29,797
square foot lease at 2249 Westbrooke Drive. Madison
County showed no leasing activity, and construction
continues on the 450,000 square foot Target distribution
center that should be completed March of 2014. Ace
Hardware broke ground on its 535,000 square foot
warehouse in West Jefferson. Union County is seeing a
high volume of activity as NEX Transport began
construction on its 300,000 square foot warehouse
expansion. Honda of America announced plans to expand
and build a new 160,000 square foot building at its
Marysville facility. The expansion is part of a statewide
plan to reinvest $215 million into upgrades and new
construction. The new building is slated to open in the
third quarter of 2014.
Market intel
Market Activity Volume is the sum of the absolute value
of each absorption change in the market. It tells us a
little more about what exactly happened to the market
behind the absorption number. The Market Activity
Volume was 1,877,698 square feet. This is slightly above
the average (2,450,360 square feet) for third quarters
over the past four years. There are only 40 buildings
with vacant contiguous space equal to or greater than
100,000 square feet left in the Columbus market. Five
were built since 2000 and four of those are warehousedistribution.
482 offices in
62 countries on
6 continents
United States: 140
Canada: 42
Latin America: 20
Asia Pacific: 195
EMEA: 85
•$1.9
billion in annual revenue
•1.1 billion square feet under
management
•Over 13,500 professionals
united states:
Greater Columbus Region
Richard B. Schuen SIOR CCIM
CEO | Principal | Columbus
Two Miranova Place
Suite # 900
Columbus, Ohio 43215
tel +1 614 410 5612
Leslie Hobbs
Director of Marketing | Ohio
Two Miranova Place
Suite # 900
Columbus, Ohio 43215
tel +1 614 410 5640
Jonathan Schuen
Research Analyst
Two Miranova Place
Suite # 900
Columbus, Ohio 43215
tel +1 614 437 4495
This document/email has been prepared by Colliers
International for advertising purposes. Colliers
International statistics and data are audited annually and
may result in revisions to previously reported quarterly
and final year-end figures. Sources include Columbus
Dispatch, Business First, Xceligent, CoStar, Chain Store
Age, Wall Street Journal, Bureau of Labor Statistics,
Bureau of Economic Analysis, Gallup and the Cleveland
Federal Reserve.
Accelerating success.