CharlotteWEB AMERICAS MarketBeat Industrial 3page Q22012

7/31/2019 CharlotteWEB AMERICAS MarketBeat Industrial 3page Q22012

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Thalhimer 1111 Metropolitan Avenue, Suite 315

Charlotte, NC 28204 www.thalhimer.com

The market terms and definitions in this report are based on NAIOP standards. No warranty orrepresentation, express or implied, is made to the accuracy or completeness of the information containedherein, 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.

© 2012 Cushman & Wakefield, Inc. All rights reserved.

ECONOMIC OVERVIEW

The Charlotte region continues to gain the

attention of national and international firms by

offering a very accessible market with a low

cost of operation, skilled workforce, and pro-

business climate. The U.S. Census Bureau’s

latest estimates indicated that between April 1, 2012 and July 1, 2012,

Charlotte added 19,662 residents, placing it ninth in population

growth on a numerical basis. The Charlotte region’s unemployment

rate is 9.8%, in-line with the state-wide average, but down from

10.4% a year earlier. The decrease was driven by professional andbusiness services sectors along with trade, transportation and utilities.

CONTINUED MOMENTUMFor the greater Charlotte region, which includes Mecklenburg County

and the surrounding sixteen counties, the second quarter of 2012

recorded leasing activity of 794,511 square feet (sf) in the second

quarter versus 1,212,000 sf in the first quarter 2012.

In our first quarter 2012 Marketbeat Report, we talked about

expecting to see build-to-suits and our first speculative development,

both of which occurred this quarter. Childress Klein properties

broke ground this month on Ridge Creek IV, a 270,000-sf building

with only 25% pre-leased to Averitt Express and the Keith

Corporation announced a built-to-suit project for child-safetymanufacturer, Britax, which will consolidate their operations from

three locations into one 500,000-sf facility.

The Blackstone Group closed on their acquisition of Dexus Property

Group’s $770.0-million industrial portfolio, which included two

Charlotte properties: 9900 Brookford Street and Transwest Business

Park.

OCCUPANCY TO INCREASE IN 2012With rising energy costs, it is our expectation the region will see

increased demand for quality distribution and manufacturing facilities

in an attempt to shorten supply chains and locate closer to the end

user. We are seeing the return of the 20,000 to 50,000-sf regional

users who have been on the sidelines for the past 18 months as well

as a marked increase in manufacturing interest.

OUTLOOK

We expect to see additional build-to-suits announced in 2012 as cap

rates compress, pushing values of modern distribution facilities closer

to replacement value. There will continue to be some level of

disconnect between construction pricing and lease rates for quality

distribution and manufacturing facilities.

Furthermore, we believe after speaking with developers and

contractors alike that we may see another speculative industrial

building started in late 2012 or 2013.

STATS ON THE GO

Q2 2011 Q2 2012 Y-O-Y

CHANGE

12 MONTH

FORECAST

Overall Vacancy 16.4% 16.9% 0.5pp

Direct Asking Rents (psf/yr) $3.47 $3.50 0.9%

YTD Leasing Activity (sf) 2,689,645 1,915,341 -28.8%

DIRECT RENTAL VS. VACANCY RATES

LEASING ACTIVITY VS. OVERALL NET ABSORPTION

*THIS INFORMATION IS ACROSS ALL PRODUCT TYPES.

10.0%12.0%

14.0%

16.0%

18.0%

20.0%

$0.00$2.00

$4.00

$6.00

$8.00

$10.00

2008 2009 2010 2011 Q2 12

p s f / y r

DIRECT GROSS RENTAL RATE DIRECT VACANCY RATE

7 . 2

5

9 . 3

6

1 1 . 0

3

6 . 5

7

0 . 5

1 . 7

4

- 6

. 2 3

- 0

. 9 9

3 . 0

4

0 . 3

9

-10.0-5.0

0.0

5.0

10.0

15.0

2008 2009 2010 2011 2012 YTD

m s f

LEASING ACTIVITY OVERALL NET ABSORPTION

Q2 2012CHARLOTTE, NC

INDUSTRIAL SNAPSHOT MARKETBEAT

A Cushman & Wakefield Alliance Research Publication




Charlotte, NC 28204 www.cushmanwakefield.com/knowledge



CHARLOTTE, NC

SUBMARKET INVENTORY OVERALL

VACANCY

RATE

YTD LEASING

ACTIVITY

UNDER

CONSTRUCTION

YTD

CONSTRUCTION

COMPLETIONS

YTD DIRECT

NET

ABSORPTION

YTD OVERALL

NET

ABSORPTION

DIRECT WEIG

AVERAGE

RENTAL

HT MF OS

Airport 10,498,290 10.4% 42,600 156,000 0 (49,106) (87,677) $7.00 $2.89 $9.00 $4

Alexander County 233,043 26.4% 0 0 0 0 0 $0.00 $0.00 $0.00 $

Anson County 1,805,825 50.8% 0 0 0 16,600 16,600 $0.00 $1.95 $9.33 $2

Burke County 2,783,028 24.9% 0 0 0 (406,125) (406,125) $0.00 $4.05 $10.00 $2

Cabarrus County 10,265,186 9.8% 42,365 75,476 0 (127,583) (127,583) $0.00 $3.75 $8.50 $5

Caldwell County 4,772,589 31.9% 0 0 0 (500,322) (500,322) $0.00 $.89 $4.00 $

Catawba County 13,989,904 22.5% 36,760 0 0 79,091 79,091 $0.00 $1.91 $5.43 $2

CBD 675,243 23.5% 0 0 0 (610) (610) $0.00 $0.00 $18.00 $0

Chester County 2,881,453 69.3% 32,400 0 0 (59,038) (59,038) $0.00 $1.85 $0.00 $

Cleveland County 6,266,133 7.8% 0 0 50,000 50,000 $0.00 $6.79 $0.00 $2

East 4,794,113 10.7% 32,065 0 123,000 52,812 52,812 $0.00 $5.54 $6.30 $5

Freedom Dr. 1,263,725 18.1% 0 0 0 63,505 43,505 $0.00 $2.75 $8.00 $3

Gaston County 14,130,352 15.6% 54,000 179,000 57,392 445,265 445,265 $0.00 $2.32 $0.00 $2

I-277/ 30th St. 2,401,343 13.2% 0 0 50,000 (93,744) (93,744) $0.00 $2.25 $0.00 $3

I-277/ Remount Rd. 1,445,579 14.8% 32,980 0 0 (5,271) (5,271) $0.00 $0.000 $0.00 $5

I-85 Beatties Ford 8,607,949 13.9% 143,280 0 0 3,152 (26,848) $0.00 $2.30 $0.00 $2

Iredell County 13,781,333 27.4% 264,943 0 305,300 249,562 240,032 $7.95 $2.51 $9.55 $2

Lancaster County 2,139,208 20.3% 3,750 0 0 21,295 21,295 $0.00 $2.70 $0.00 $2

Lincoln County 4,836,235 22.0% 47,778 0 0 64,650 64,650 $0.00 $2.23 $0.00 $2

Mecklenburg Line 4,118,387 10.0% 0 0 0 (6,721) (6,721) $21.50 $15.00 $0.00 $5

North 16,167,547 14.1% 232,420 46,237 102,421 501,086 462,566 $10.00 $11.94 $0.00 $3

Rowan County 7,137,232 25.7% 0 0 0 418,037 418,037 $0.00 $2.75 $0.00 $2

South Industrial 528,810 3.6% 10,063 0 0 (2,477) (2,477) $0.00 $0.00 $0.00 $0

Stanley 2,237,799 24.5% 0 0 0 (23,850) (23,850) $0.00 $0.00 $0.00 $2

State Line 32,828,067 13.5% 549,820 334,456 0 (282,532) (303,410) $7.22 $6.28 $7.74 $4

Sugar Creek 6,086,631 12.7% 87,675 0 (42,082) (42,082) $0.00 $3.34 $6.53 $3

Tyvola Rd. 5,910,198 22.8% 129,761 0 0 78,551 80,535 $0.00 $4.01 $6.53 $3

Union County 8,725,653 9.3% 68,450 0 0 (13,459) (13,459) $0.00 $5.44 $0.00 $3

University 277,360 22.6% 62,589 0 0 0 0 $6.00 $0.00 $0.00 $0

York County 10,816,742 13.2% 41,642 500,000 0 83,139 119,139 $0.00 $1.95 $4.50 $3

TOTALS 202,404,957 16.9% 1,915,341 1,291,169 638,113 513,825 394,310 $6.59 $2.56 $7.26 $3

* RENTAL RATES REFLECT ASKING $PSF/YEAR HT= HIGH TECH MF = MANUFACTURING OS = OFFICE SERVICE W/D = WAREHOUSE/DISTRIBUTION




Charlotte, NC 28204 www.cushmanwakefield.com/knowledge



MARKET HIGHLIGHTS

Significant Q2 2012 Lease Transactions SUBMARKET TENANT BUILDING CLASS SQUARE

2301 Nevada Boulevard Stateline Forward Air Solutions B 150,

5039 Sirona Road Stateline Gift Tree A 112,

11435 Granite Street Stateline DesignLine A 72,

10325 Ridge Creek Drive Stateline Averitt Express A 67,

6901 Northpark Blvd North Hitachi A 40,

7606 Whitehall Ex. Dr. Stateline Vermop A 27,

3600 Westinghouse Blvd. Stateline Sunlord Furniture A 23,

Significant Q2 2012 Sale Transactions SUBMARKET TENANT BUILDING CLASS SQUARE

Transwest Business Center Stateline The Blackstone Group TBD 568,

10000 Twin Lakes Parkway North The Silverman Group $9,625,000 560,

9900 Brookford St. Stateline The Blackstone Group TBD 122,

5417 Wyoming Avenue Stateline Data Chambers $3,340,000 80,

12301 Moores Chapel Rd. Airport 3F North America, Inc $1,670,000 65,

467 Lakeshore Parkway York County Stantine Lakeshore Properties, LLC $2,100,000 54,

11140 Rivers Edge Road Stateline Hay Distributing $995,000 20,

Significant Q2 2012 Construction Completions SUBMARKET TENANT COMPLETION DATE SQUARE

100 Mooresville Boulevard Iredell County Niagara Bottling Q2 2012 305,

*6280 Glen Afton Blvd Cabarrus County S. P. Richards Q2 2012 200,

*14045 S. Lakes Stateline Groninger Q2 2012 64,

2825 Repi Ct. - Gastonia Technology Park Gaston County Repi Q2 2012 57,

Significant Projects Under Construction SUBMARKET TENANT COMPLETION DATE SQUARE

Pleasant Rd York County Britax Q3 2013 500,

10325 Ridge Creek Drive Stateline Averitt Express Q4 2012 270,

4050 Perimeter Drive Airport American Tire Q4 2012 156,

1055 Gastonia Technology Park Gaston County CLT Packaging Q4 2012 126,

8721 Sidney Circle North Flex – Multi Tenant Q3 2012 46,

*NOT INCLUDED IN STATISTICS ON PAGE 2

Documents

CharlotteWEB AMERICAS MarketBeat Industrial 3page Q22012