market update 2016 - carw€¦ · result of low vacancy •centerpoint and wispark planning large...
TRANSCRIPT
Market Update 2016Presented by:
INDUSTRIAL MARKET
Jim YoungThe Barry Company
Total Industrial Market
• Total Universe: 135,797,343 sq ft
• Occupied Space: 128,249,300 sq ft
• Vacant Space: 7,548,043 sq ft
• Vacancy Rate: 5.6%
• Absorption: 2,903,434 sq ft
Central North West South Kenosha
Total Universe 21,467,633 41,290,498 32,896,515 17,822,433 22,320,264
Vacant Space 3,569,865 1,233,204 1,247,367 660,880 1,752,526
Vacancy Rate 12.4% 3.0% 3.8% 3.7% 7.9%
Absorption 340,463 545,275 895,894 671,247 450,555
2016 Industrial Market Statistics
• Artificially high vacancy rate in Central Market• Occupied space is being marketed as vacant
Property Vacant Space
445 W. Oklahoma Ave. 361,000 SF
944 N. 45th Street 146,000 SF
714 E. Keefe Ave. 132,000 SF
2748 N. 32nd Street 379,800 SF
1982 S. Hilbert Street 194,300 SF
3201-3257 S. 20th Street 145,700 SF
TOTAL 1,358,800 SF
2016 Industrial Market Statistics
2016 Industrial Market Statistics
Historical Industrial Vacancy Rates
0
2
4
6
8
10
12
14
16
18
2011 2012 2013 2014 2015 2016
Central North West South Kenosha
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
2012 2013 2014 2015 2016 YTD
Absorption is outpacing construction and new inventory!
Deliveries (SF) Annual Absorption (SF)
Why the Low Vacancy Rate?
Short Supply of developable sites
• Lack of land in right location to build product prospects want
• Cost of developing the land/reluctance of some communities to use TIF Financing on new parks
• Fear of bringing a site to market and gets limited interest• This is slowly fading as recent speculative deals have been met
favorably
Large TransactionsAcceleration of large transactions compressing already low rates
Ariens – First Park 94 (Kenosha)8448 38th Street, Kenosha601,439 SF Lease
KemKrest (Kenosha)9801 80th Avenue, Pleasant Prairie277,454 SF Lease
Lindner Logistics (West)W229N1492 Westwood Drive, Pewaukee190,000 SF Sale
Large TransactionsAcceleration of large transactions compressing already low rates
Pieper Electric (West)5475 S. Westridge Court, New Berlin100,000 SF Lease
Large Transactions
Jason Industries (North)9009 N. 51st Street, Brown Deer154,800 SF Sale
Phoenix Inv. to Briggs & Stratton (North)4143 N. 27th Street, Milwaukee170,000 SF Lease
Oilgear (Central)2300 S. 51st Street, Milwaukee250,000 SF Sale
0
50
100
150
200
250
300
2012 2013 2014 2015 2016 YTD
10-50K Building Sales
10-50K Building Sales
Smaller Transaction VolumeHas been fantastic over the last 5 years, averaging 200 sales.
• Glenroy sale to
MacLean-Fogg (North)
N92W14555 Anthony Avenue
71,044 SF, 4/2016
$3,425,000 - $48.21/SF
Creative/Off-Market Transactions
• STAG Industrial Sale to
Crown Lift Truck (West)
5150 Towne Drive
81,500 SF, 5/2016
$5,925,000 - $72.69 /SF
A more even Playing Fieldbetween buyers and sellers
• Higher Sales Prices and “firming” of price points across all categories and market segments
• Reduced time on market
$50.96/SF - Central
Strong Sale Prices Across All Markets
$60.32/SF - West
$61.15/SF - West
$79.57/SF - Kenosha
$62.48/SF - South
$56.05/SF - North $58.40/SF - North
$70.52/SF - West
$75.83/SF - West
Increase in Infill Development/New Construction for End Users
Oberlin Filter (West)827 Silvernail Road, Pewaukee92,340 SF Sale
Mortara Instrument (North)8585 N. Bradley Road, Milwaukee62,000 SF new construction
Result of Low Vacancy
• CenterPoint and Wispark planning large
spec building in Pleasant PrairieBizTimes 03/14/16
• Construction begins on another spec
industrial building in Kenosha CountyBizTimes, 09/01/16
• Border deal clears path for more
development along I-94 in Kenosha CountyThe Business Journal, 10/26/16
• Dairyland property in Kenosha lined up for
sale, manufacturing developmentThe Business Journal, 11/1/16
• Franklin approves large industrial buildingMilwaukee Journal Sentinel, 11/18/16
• Large truck terminal planned for Oak CreekMilwaukee Journal Sentinel, 11/21/16
• Zilber plans speculative industrial building
in Pleasant PrairieBizTimes 11/29/16
• Industrial park planned for BrookfieldBizTimes 11/30/16
• OakView Business Park in Oak Creek lands
second spec building with 2017 openingThe Business Journal, 12/7/16
Increased Speculative Developmentas is playing out in Kenosha
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2,000,000
2012 2013 2014 2015 2016
Kenosha County Deliveries and Vacancy
Deliveries (SF) Vacancy Rate
• Newly announced Marriot development (South)
Oak Creek - 120,000 SF Proposed
• Dickman Co. (South)
OakView Business Park
Oak Creek
133,056 SF Under Construction
• 2000 Development (West)
Watertown Road & Commerce Cir.
Pewaukee
127,700 SF, October 2016
Increased Speculative Development
Increased Speculative Development
• Burnham Business Center (Central)
4915 W. Burnham Street
West Milwaukee
82,500 SF Under Construction
• Interstate Partners (West)
22755 Green Road
Pewaukee
140,000 SF Proposed
• Rizzo (West)
21290 Gumina Road
Brookfield
333,000 SF Proposed
• Century City (Central)
3945 N. 31st Street
Milwaukee
53,160 SF, Late 2015
Increased Speculative Development
Where do we go from here?
• Vacancy rates should rise as much of the pending/proposed construction gets delivered
• Uptick in Build-to-Suit Projects• A function of developers controlling key sites
• Potential slow down in 2017 of speculative development in the South market on the heels of recent announcements, but potential uptick in speculative activity in the North market