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    Charlotte Web AMERICAS Market Beat Industrial 3page Q12012

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    The Charlotte region continues to gain the attention of national and international firms offering a very accessible market with a low cost of operation, skilled workforce, and probusiness climate. Between April 2010 and July 2011, North Carolina added over 120,000 new residents, the fourth highest growth rate in the US. The first quarter of 2012 showed increased leasing velocity over the fourth quarter 2011.

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    Charlotte Web AMERICAS Market Beat Industrial 3page Q12012

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    Anonymous Feglbx5
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    The Charlotte region continues to gain the attention of national and international firms offering a very accessible market with a low cost of operation, skilled workforce, and probusiness climate. Between April 2010 and July 2011, North Carolina added over 120,000 new residents, the fourth highest growth rate in the US. The first quarter of 2012 showed increased leasing velocity over the fourth quarter 2011.

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    The Charlotte region continues to gain the attention of national and international firms offering a very accessible market with a low cost of operation, skilled workforce, and probusiness climate. Between April 2010 and July 2011, North Carolina added over 120,000 new residents, the fourth highest growth rate in the US. The first quarter of 2012 showed increased leasing velocity over the fourth quarter 2011.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    166 views3 pages

    Charlotte Web AMERICAS Market Beat Industrial 3page Q12012

    Uploaded by

    Anonymous Feglbx5
    The Charlotte region continues to gain the attention of national and international firms offering a very accessible market with a low cost of operation, skilled workforce, and probusiness climate. Between April 2010 and July 2011, North Carolina added over 120,000 new residents, the fourth highest growth rate in the US. The first quarter of 2012 showed increased leasing velocity over the fourth quarter 2011.

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    of 3

    MARKETBEAT

    INDUSTRIAL SNAPSHOT
    CHARLOTTE, NC
    A Cushman & Wakefield Alliance Research Publication

    Q1 2012

    ECONOMIC OVERVIEW
    The Charlotte region continues to gain the attention of national and international firms offering a very accessible market with a low cost of operation, skilled workforce, and probusiness climate. Charlotte Douglas International Airport is the economic driver for growth in the region and was ranked the 6th busiest airport in the world in terms of takeoffs and landings (539,842) in 2011. Between April 2010 and July 2011, North Carolina added over 120,000 new residents, the fourth highest growth rate in the US. The North Carolina unemployment rate decreased in February to 9.9%, down from 10.2% in January. Total non-farm jobs grew by 8,300 in February led by the public sector hiring nearly 5,600 jobs. CONTINUED MOMENTUM For the greater Charlotte region which includes Mecklenburg County and the surrounding sixteen counties, the first quarter of 2012 showed increased leasing velocity over the fourth quarter 2011. Despite a slowing in fourth quarter leasing activity, the Charlotte region industrial market posted positive net absorption for the fourth quarter of 574,587 square feet (sf) and nearly 3,037,454 sf for the year. In March, the City of Charlotte executed the long awaited lease with Norfolk Southern to begin development of the intermodal on land adjacent to the Charlotte Douglas International Airport. It is expected to create nearly 5,000 jobs as Charlotte positions itself as in inland hub reducing the drayage costs from the ports of Charleston and Savanna with an initial estimate of 200,000 lifts annually. The North submarket leads the region overall absorption in demand year-to-date, recording 462,571 square feet in positive overall absorption including a 185,570 square foot lease to Positec in Huntersville Business Park. CLT Packaging Corporation announced a new 226,000-sf building at Gastonia Technology Park. OCCUPANCY TO INCREASE IN 2012 With 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 build-to-suit discussions pick up 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 the first new speculative industrial building since 2009 in our region started late in 2012 or 2013. STATS ON THE GO
    1Q11 Overall Vacancy Direct Asking Rents (psf/yr) YTD Leasing Activity (sf) 13.5% $3.51 1,428,232 1Q12 16.4% $3.42 767,858 Y-O-Y 12 MONTH CHANGE FORECAST 2.9pp -2.6% -46.2%

    DIRECT RENTAL VS. VACANCY RATES


    $8.00 $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $0.00 2008 2009 2010 2011 1Q12 20.0% 15.0% 10.0% 5.0% 0.0%

    psf/yr

    DIRECT GROSS RENTAL RATE

    DIRECT VACANCY RATE

    LEASING ACTIVITY VS. OVERALL NET ABSORPTION


    15.0 10.0
    7.25 1.74 9.36 6.57 3.04 0.75

    msf

    0.0
    -6.23

    -5.0 -10.0 2008

    2009

    2010

    -0.99

    2011

    2012 YTD

    LEASING ACTIVITY

    OVERALL NET ABSORPTION

    Thalhimer 1111 Metropolitan Ave., Suite 315 Charlotte, NC 28204 www.cushmanwakefield.com/knowledge

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

    1.12

    5.0

    11.03

    CHARLOTTE, NC
    SUBMARKET INVENTORY OVERALL VACANCY RATE YTD LEASING UNDER ACTIVITY CONSTRUCTION YTD CONSTRUCTION COMPLETIONS YTD DIRECT NET ABSORPTION YTD OVERALL NET ABSORPTION HT Airport Alexander County Anson County Burke County Cabarrus County Caldwell County Catawba County CBD Chester County Cleveland County East Freedom Dr. Gaston County I-277/ 30 St. I-277/ Remount Rd. I-85 Beatties Ford Iredell County Lancaster County Lincoln County Mecklenburg Line North Rowan County South Industrial Stanley State Line Sugar Creek Tyvola Rd. Union County University York County
    th

    DIRECT WEIGHTED AVERAGE NET RENTAL RATE MF $2.80 0 $1.95 $4.05 $2.10 $2.10 $2.04 0 $4.35 $2.82 $5.54 $2.75 $2.19 $2.75 0 $2.29 $2.51 0 $2.23 $16.90 $7.89 $2.40 0 $3.00 $3.40 $3.37 $4.35 $2.28 0 $3.92 OS $9.00 0 0 0 $3.00 0 $ $18.00 0 0 0 0 0 0 0 0 $8.26 $8.50 $2.95 0 0 0 0 0 $2.75 $9.59 $8.57 0 0 $10.00 W/D $4.08 $1.50 $2.50 $2.14 $5.22 $2.08 $2.28 0 $.99 $2.75 0 $2.81 $2.53 $4.45 $5.39 $2.98 $2.95 $2.25 $3.10 $4.94 2.84 $2.32 0 $2.50 $3.69 $3.59 $3.10 $3.50 0 $3.09 $8.00 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 $6.41 0 0 0 $10.00 0 0 0 $7.48 0 0 0 $6.00 $6.00

    10,578,821 233,043 1,959,844 2,952,426 10,226,875 4,812525 13,749,577 675,243 2,854,815 6,790,681 4,854,257 1,263,725 14,450,887 2,469,804 1,464,847 8,172,172 13,496,972 2,183,048 4,764,804 4,199,893 16,137,774 6,735,232 543,442 2,220,030 32,766,050 6,121,275 6,005,255 9,099,712 277,360 10,816,575

    8.9% 26.4% 44.1% 7.5% 10.4% 29.4% 22.6% 23.5% 67.8% 7.8% 11.8% 20.9% 16.6% 12.9% 16.5% 14.1% 26.4% 20.5% 27.7% 10.0% 14.1% 19.1% 4.2% 22.2% 13.0% 13.3% 21.8% 9.2% 22.6% 13.9%

    20,600 0 0 0 27,614 0 18,000 0 0 0 22,666 0 0 0 19,650 18,000 16,280 0 0 0 162,219 0 8,615 0 235,913 23,568 72,614 48,100 62,589 11,430

    156,000 0 0 0 0 0 0 0 0 0 0 0 236,392 0 0 0 305,300 0 0 0 0 0 0 0 64,456 0 0 0 0 0

    0 0 0 0 0 0 0 0 0

    110,914 0 (18,400) 66,070 (164,750) (115,410) 55,024 (610) 0 10,000

    61,143 0 (18,400) 66,070 (164,750) (115,410) 55,024 (610) 0 10,000 (2,626) 8,400 257,433 (108,804) (30,126) 15,646 141,800 17,545 19,350 (4,414) 462,571 417,037 (5,755) 0 (64,745) (84,495) 79,357 (32,569) 0 89,637

    123,000 0 0 50,000 0 0 0 0 0 0 102,421 0 0 0 0

    (2,626) 8,400 257,433 (108,804) (30,126) 15,646 142,050 17,545 19,350 (4,414) 467,371 417,037 (5,755) 0 (63,867) (84,495)

    0 0 0 0

    77,373 (32,569) 0 89,637

    TOTALS

    202,552,475 16.4%

    767,858 762,148

    275,421

    1,122,024

    1,068,309

    $6.88

    $2.60

    $7.34

    $3.10

    * RENTAL RATES REFLECT ASKING $PSF/YEAR

    HT= HIGH TECH MF = MANUFACTURING OS = OFFICE SERVICE W/D = WAREHOUSE/DISTRIBUTION

    Thalhimer 1111 Metropolitan Ave., Suite 315 Charlotte, NC 28204 www.cushmanwakefield.com/knowledge

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

    MARKET HIGHLIGHTS Significant 1Q12 Lease Transactions


    5235 David Cox Road. SUBMARKET North Industrial SUBMARKET York State Line Industrial State Line Industrial State Line Industrial SUBMARKET North Industrial I-277/ 30 St. North Industrial East SUBMARKET Stateline Gaston County Airport Iredell County
    th

    TENANT Preferred Pump BUYER Keller USA B&L ,LLC First Industrial The Box Building MAJOR TENANT N/A Texas Pipe N/A N/A MAJOR TENANT N/A CLT Packaging American Tire Niagara

    BUILDING CLASS A PURCHASE PRICE / $PSF $825,000 / $51.56 psf N/A N/A 3,985,900 / $23.36 psf COMPLETION DATE 1Q12 1Q12 1Q12 1Q12 COMPLETION DATE 2Q12 4Q12 4Q12 2Q12

    SQUARE FEET 15,000 SQUARE FEET 16,000 25,000 53,744 170,650 SQUARE FEET 15,000 50,000 87,421 123,000 SQUARE FEET 64,456 126,000 156,000 305,300

    Significant 1Q12 Sale Transactions


    2168 Carolina Place Drive 1500 N. Graham Street 11601 Fruehauf Drive 1201 Westinghouse Blvd.

    Significant 1Q12 Construction Completions


    5235 David Cox Road Sam Neely Road 11101 Hambright Road 200 Wadworth Place

    Significant Projects Under Construction


    14045 S. Lakes 1055 Gastonia Technology Park 4050 Perimeter Drive 100 Mooresville Boulevard

    * RENEWAL - NOT INCLUDED IN LEASING ACTIVITY STATISTICS

    Thalhimer 1111 Metropolitan Ave., Suite 315 Charlotte, NC 28204 www.cushmanwakefield.com/knowledge

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

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