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Hampton Roads, Virginia MarketView - Industrial Market
CBRE Global Research and Consulting Q2 2013
Hot Topics
• Noland Company absorbed an additional 40,000 SF at 663 Woodlake Drive in Greenbrier, making that building 100% occupied.
• Lumber Liquidators leased 150,000 SF at Northgate Logistics Center in Suffolk.
• Port of Virginia continues to post year-over-year TEU volume increases, up 7.2% in the second quarter of 2013 over second quarter of 2012.
Quick Stats
OVER 198,000 SQUARE FEET OF POSITIVE ABSORPTION DURING SECOND QUARTER OF 2013
Q2 2013 QoQ YoYVacancy 9.2 %
Lease Rates $3.99 NNN
Net Absorption 198,900 SF
Completions 0 SF
Hampton Roads Industrial Market
The inventory for the Norfolk region’s
industrial market tracked by CBRE
totals over 79 million square feet. This
total includes all multi-tenant and own-
er-occupied industrial facilities in the
region 20,000 square feet and larger. The
Norfolk region is also
commonly referred to as the
“Hampton Roads” area and the Virginia
Beach-Norfolk-Newport News, MSA.
The Hampton Roads industrial market
had 198,900 square feet of positive
absorption during the second
quarter of 2013. CBRE research tracked 7
buildings with 25,000 square feet or more
of positive absorption during the quarter.
There were no deliveries and no
new projects under construction
during the second quarter of 2013.
Average asking lease rates
decreased during the second
quarter, and are currently estimated
at $3.99 per square foot, triple net.
The overall vacancy rate in the
Hampton Roads industrial
market decreased to 9.2% in the
second quarter of 2013. The South-
side vacancy rate decreased during
the second quarter by 50 basis points
to 10.3%, while the Peninsula rate
increased 10 basis points to 6.9%.
CBRE research now tracks seventeen
properties with 100,000 square feet or
more of vacancy including
five properties with 250,000
square feet or more of vacancy.
Hampton Roads’ availability rate (which
includes space available for sub-
lease and future available) decreased
from first quarter 2013 to 11.1%. The
Southside availability rate decreased
130 basis points to 12.4%, while the
Peninsula availability rate decreased
150 basis points to 8.1%. Region-wide,
over 402,364 square feet of space
was available for sublease, including
176,000 square feet in the Cavalier
Industrial Park submarket. Additionally,
over one million square feet of space is
currently marketed as future available.
Vacancy of 100,000 SF or MoreTracking 17 Spaces
Rail Containers Handled7.7% (YoY)
Manufacturing Employment4.8% (12 months)
Port of Virginia TEU Volume7.2% (YoY)
*Arrows indicate change from previous quarter.
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Submarket Building SFTotal Vacancy
Rate (%)
Total Availability
Rate (%)
Under Construction
(SF)
Average Asking Rent/SF
($/SF/YR)
Quarterly Absorption
(SF)
YTD Absorption
(SF)
Greenbrier 5,757,963 2.4 3.6 0 $5.29 27,909 20,921
Bainbridge/S. Elizabeth River 4,585,114 3.4 4.4 0 $4.72 20,000 133,425
Cavalier Industrial Park 4,899,472 16 19.9 0 $4.72 53,500 (24,971)
Norfolk Commerce Park/ Central Norfolk Area
3,264,713 15.3 15.7 0 $3.77 (39,500) (144,142)
Norfolk Industrial Park 7,749,023 7.1 8.3 0 $5.46 99,707 5,117
West Side/Midtown Norfolk 2,004,203 9.5 11.7 0 $5.68 29,800 (50,200)
Lynnhaven 4,604,239 37.1 38.6 0 $4.47 (81,716) (59,433)
Greenwich/Cleveland Street 1,557,929 6.6 6.6 0 $6.57 1,354 (85,106)
Airport Industrial Park 3,332,445 6 9.4 0 $5.40 (30,685) 87,602
City of Portsmouth 2,939,634 10.8 13.4 0 $4.23 (15,657) (8,249)
City of Suffolk 11,191,916 7.3 11.4 0 $4.22 165,696 205,696
Isle of Wright/Franklin 2,812,762 5.5 5.5 0 $2.00 0 0
Southside Total 54,699,413 10.3 12.4 0 $3.80 230,408 80,660
Copeland/Lower Peninsula 8,279,039 9.4 10.8 0 $5.90 (7,743) 28,219
Oyster Point/Middle Peninsula 3,493,319 1.8 1.8 0 $5.02 (5,220) 6,525
Oakland/Upper Peninsula 4,099,991 11.3 11.9 0 $5.72 9,223 11,367
Williamsburg Extended 8,506,767 4.4 6.3 0 $5.97 (27,768) (54,310)
Peninsula Total 24,379,116 6.9 8.1 0 $4.64 (31,508) (8,199)
HAMPTON ROADS TOTAL 79,078,529 9.2 11.1 0 $3.99 198,900 72,461
CBRE|HAMPTON ROADS SECOND QUARTER 2013 INDUSTRIAL MARKETVIEW
CHART 1: UNEMPLOYMENT RATE
Table 1: Hampton Roads Submarket Statistics
CHART 2: EMPLOYMENT BY INDUSTRY
Source: Bureau of Labor Statistics
The Hampton Roads MSA’s civilian workforce totals approximately 829,500. The unemployment rate in Hampton Roads as of April 2013 was 5.4%, significantly lower than the national average of 7.1%.
The largest employer in the region is the government, which directly employs approximately 162,300 of the total civilian workforce.
Source: CBRE|Hampton Roads Research, Q2 2013.
© 2013, CB Richard Ellis of Virginia, Inc.
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VACANCY AND ABSORPTION
During the second quarter of 2013, the industrial vacancy rate in Hampton Roads decreased 30 basis points to 9.2%. The availability rate, which factors in vacant space and future available space in existing buildings, decreased 130 basis points to 11.1% in the second quarter of 2013. As of quarter end, there was over 400,000 square feet of sublease space in the market and over 1 million square feet of future available space.
Quarterly net absorption was positive 198,900 square feet. The Southside experienced 230,408 square feet of positive absorption during the second quarter, while the Peninsula saw over 31,000 SF in negative absorption.
CBRE|HAMPTON ROADS SECOND QUARTER 2013 INDUSTRIAL MARKETVIEW
CONSTRUCTION AND DELIVERIES Over the past couple of years, new construction activity has been limited to a handful of small-bay product projects. Continuing in this trend, there were no projects under construction during the quarter. There also were no deliveries for the second quarter of 2013.
WEIGHTED ASKING RENT Average asking rents in Hampton Roads, quoted in triple net terms, averaged $3.99 per square foot as of second quarter 2013. The Greenwich/Cleveland Street area has the highest average rental rate at $6.57 per square foot, NNN; while the Isle of Wight/Franklin submarket has the lowest average rental rate at $2.00 per square foot, NNN.
Chart 4: Construction and Deliveries
Chart 3: Vacancy and Absorption
Chart 5: Weighted Asking Rent
Source: CBRE|Hampton Roads Research, Q2 2013.
Source: CBRE|Hampton Roads Research, Q2 2013.
Source: CBRE|Hampton Roads Research, Q2 2013.
AvailabilityAbsorption
11.4%198,900 SF
Vacancy 9.2%
Deliveries 0 SFConstruction 0 SF
AvailabilityAbsorption
11.1%198,900 SF
Vacancy 9.2%
Average Rate $3.99
© 2013, CB Richard Ellis of Virginia, Inc.
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HAMPTON ROADS RESEARCH
J. Scott Adams, CCIM Managing Director & Regional President CBRE|Hampton Roads 150 West Main Street Suite 1100 Norfolk, VA 23510 t: +1 757 228 1836 e: [email protected]
Hardik Barot Senior Research Analyst CBRE|Hampton Roads 150 West Main Street Suite 1100 Norfolk, VA 23510 t: +1 757 228 1821 e: [email protected]
CONTACTS
GLOBAL RESEARCH AND CONSULTING This report was prepared by the CBRE U.S. Research Team which forms part of CBRE Global Research and Consulting – a network of preeminent researchers and consultants who collaborate to provide real estate market research, econometric forecasting and consulting solutions to real estate investors and occupiers around the globe.
DISCLAIMER Information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we have not verified it and make no guarantee, warranty or representation about it. It is your responsibility to confirm independently its accuracy and completeness. This information is presented exclusively for use by CBRE clients and professionals and all rights to the material are reserved and cannot be reproduced without prior written permission of the CBRE Global Chief Economist.
For more information about this Hampton Roads MarketView, please contact:
© 2013, CB Richard Ellis of Virginia, Inc.
