INDUSTRIAL

INDUSTRIAL

The industrial market finished 2013 with statistics very similar to 2012. The overall vacancy rate dropped slightly from 19.5% to 18.6% and the overall asking rate was $4.03 per square foot compared to $3.97. Activity across the market was flat with no major movement in any area.

The most active leasing activity was seen in the smaller properties under 10,000 square feet which are primarily attractive to local tenants, especially those in the service industries. There wasn’t a great deal of absorption, however, because there were also several businesses that closed or consolidated their operations into fewer facilities. The smaller property categories also had the highest level of sales activity.

Activity in the larger properties slowed considerably during the year.  Several factors contributed to the drop in leasing activity:

  • There is still a limited amount of quality inventory available for high tech manufacturers and large warehouse users.
  • Many manufacturers are opting to run multiple shifts before considering expansion.
  • New technologies continue to reduce the amount of space required for manufacturers.
  • It is very expensive for manufacturers to move.

New construction continues to be minimal as the high cost makes rental rates significantly higher than can be found at existing properties.   A new 90,000 square foot industrial building, on south West Street, opened for tenants in 2013 and was able to lease approximately one-third of the vacant space.

A few of the older functionally obsolete properties were sold during the year.  The buyers are typically businesses like roofing companies and other types of contractors who don’t have a problem with the lower ceiling heights and lack of modern amenities.

FORECAST

The area industrial market is expected to remain flat in 2014 with overall activity similar to 2013.   The market isn’t expected to see great improvement until conditions improve for the local general aviation manufacturers.

10 Year Vacancy Rates vs. Lease Rates Industrial

Year Vacancy Rate % Lease Rate Price $
2004 25.3% 3.21 $
2005 16.6% 4.10 $
2006 10.2% 4.13 $
2007 6.7% 4.80 $
2008 9.9% 4.80 $
2009 21.5% 3.99 $
2010 22.5% 4.03 $
2011 20.5% 3.99 $
2012 19.5% 3.97 $
2013 18.6% 4.03 $

Properties Up to 5,000 sf

Market #Bldgs Total RBA Direct SF VAC% Quoted Rates
CBD 4 13,898 0 0.0% N/A
Northeast 18 92,438 25,372 27.4% $6.08
Northwest 6 41,532 0 0.0 N/A
Southeast 12 63,962 13,200 20.6% $4.75
Southwest 13 48,420 10,700 22.1% $5.70
Totals 53 260,250 49,272 18.9% $5.64

Properties 5,000 to 15,000 sf

Market #Bldgs Total RBA Direct SF VAC% Quoted Rates
CBD 21 194,478 28,640 14.7% $3.08
Northeast 37 361,065 54,784 15.1% $5.80
Northwest 4 47,882 9,404 19.6% $5.04
Southeast 31 283,934 26,460 9.3% $7.20
Southwest 75 760,762 73,355 9.6% $5.56
Totals 168 1,648,121 192,543 11.6% $5.46

Properties 15,000 to 30,000 sf

Market #Bldgs Total RBA Direct SF VAC% Quoted Rates
CBD 8 151,096 72,108 47.7% $3.53
Northeast 24 476,082 145,627 30.5% $4.86
Northwest 3 60,850 1,200 1.9% $5.70
Southeast 23 480,257 30,300 6.3% $6.08
Southwest 33 710,827 125,635 17.6% $4.48
Totals 91 1,879,112 374,870 19.9% $4.58

Properties 30,000 to 50,000 sf

M #Bldgs Total RBA Direct SF VAC% Quoted Rates
CBD 1 38,784 38,784 100% $1.75
Northeast 8 335,773 150,000 44.6% $3.61
Northwest N/A N/A N/A N/A N/A
Southeast 14 522,760 60,920 11.6% $4.05
Southwest 13 505,400 148,500 29.3%% $4.48
Totals 36 1,402,717 398,204 28.3% $3.82

Properties over 50,000 sf

Market #Bldgs Total RBA Direct SF VAC% Quoted Rates
CBD N/A N/A N/A N/A N/A
Northeast 18 2,038,976 266,815 13% $3.35
Northwest 2 653,061 N/A N/A N/A
Southeast 14 1,092,341 427,478 39.1% $3.62
Southwest 14 1,167,003 179,000 15.3% $5.33
Totals 44 4,951,381 873,293 17.6% $3.89
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