chicago metropolitan industrial market overview november 16 2010 prepared by: george cutro colliers...
TRANSCRIPT
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Chicago Metropolitan Industrial Market Overview
November 16 2010
Prepared by:
George Cutro
Colliers International
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Industrial Market Presentation Outline
Chicago’s Industrial Market Statistics
Chicago’s “Core” Markets
Central DuPage Fox Valley I-55 Lake County North Suburbs O’Hare
Largest Transactions of 2010
Changes and Industry Trends
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Chicago Industrial Market Area
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Metro Chicago Gross Absorption
31.68
Sq.
Ft.
Mill
ions
46.88 49.72 46.87 59.78 57.20 53.3843.37 46.06 45.5 38.56
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Metro Chicago Construction Deliveries
2.08
Sq.
Ft.
Mill
ions
19.85 12.27 13.36 15.22 17.54 20.90 20.86 21.84 19.10 6.80
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Metro Chicago Net AbsorptionS
q. F
t. M
illio
ns
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Metro Chicago Vacancy Rates
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Central DuPage
Inventory 83.97 msfAvailable SF 9.93 msfVacancy Rate 11.83 %
YTD Leasing Volume (sf) 1.44 msf YTD Sales Volume (sf) 197,300 sfYTD Net Absorption (sf) -683,000 sf
Central DuPage Notes
• Vacancy rate climbs!
• 2010 leasing volume down.
• Demand up for buildings for sale.
• Rents higher for “Core” product near I-355 expressway.
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Fox Valley
Inventory 89.10 msfAvailable SF 12.06 msfVacancy Rate 13.54 %
YTD Leasing Volume (sf) 1.56 msf YTD Sales Volume (sf) 1.40 msfYTD Net Absorption (sf) 1.34 msf
Fox Valley Notes
• Available supply dropping
• Sale volume spikes
• Positive absorption!
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I-55 Corridor
Inventory 72.94 msfAvailable SF 12.87 msfVacancy Rate 17.64 %
YTD Leasing Volume (sf) 2.33 msf YTD Sales Volume (sf) 666,700 sfYTD Net Absorption (sf) -1.39 msf
I-55 Corridor Notes
• YTD leasing volume down.
• Net absorption negative!
• Speculate development non-existent
• 17.64 % highest vacancy rate ever!
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Lake County
Inventory 69.95 msfAvailable SF 10.15 msfVacancy Rate 14.51 %
YTD Leasing Volume (sf) 1.20 msf YTD Sales Volume (sf) 401,000 sf YTD Net Absorption (sf) -640,500 sf
Lake County
• Vacancy rate falls!
• Third quarter net absorption posts positive
results!
• Local company expands presence in
market.
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North Suburbs
Inventory 57.65 msfAvailable SF 5.90 msfVacancy Rate 10.23 %
YTD Leasing Volume (sf) 255,700 sf YTD Sales Volume (sf) 172,700 sf YTD Net Absorption (sf) -2.33 msf
North Suburbs
• Vacancy rate at all-time high.
• Inventory continues to shrink.
• Sale activity Anemic!
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O’Hare
Inventory 140.18 msfAvailable SF 17.50 msfVacancy Rate 12.48 %
YTD Leasing Volume (sf) 3.91 msf YTD Sales Volume (sf) 524,200 sfYTD Net Absorption (sf) -644,100 sf
O’Hare Notes
• Vacancy rate hits all time high.
• Leasing activity up.
• 6B Tax program still obtainable.
• Freight forwarders in play
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Top Lease Transactions 2010
Clorox 1,350,000 sf Far South
World Kitchen, LLC 700,200 sf Far South
3M 650,000 sf DeKalb Co.
Sony Music Entertainment 579,900 sf I-55
BP North American 574,300 sf NW Ind.
Jacobson Companies “Fonterra Milk Prdts” 507,200 sf I-80
AGL Direct 499,200 sf I-55
Midwest Custom Case, Inc. 455,900 sf Far South
NACA Logistics USA, Inc. 440,200 sf Central DuPage
Hosely International Trading Company 376,000 sf NW Ind.
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Top User Sale Transactions
Uline 1,000,000 sf SE Wis.
Freudenberg Household Products 525,000 sf I-88
R. R. Donnelley 514,000 sf I-88
MAT Holdings 506,800 sf I-55
Ionian, LLC 492,800 sf Chicago
Gordon Food Service 480,000 sf SE Wis.
The Jel Sert Company 304,500 sf I-88
GRM Information Management Svc’s 296,100 sf South Subs.
Ascent Corporation 284,200 sf I-290 North
EMCO Chemical Distributors 259,600 sf SE Wis.
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Metro Chicago Trends
• Speculative development dead, however BTS construction volume up
• Institution/REIT Landlords compete hard for deals
• Land prices falling???
• Cap rates for “Core Product” falling
• Some landlords not competing for high TI transactions
• Ownership stability