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INDUSTRIAL MARKET KEEPS AVERAGE LEASE RATE … Fort Wayne... · INDUSTRIAL MARKET KEEPS UPWARD...

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MARKET AT A GLANCE Research 2Q16 (Current Quarter) 1Q16 (Previous Quarter) 1Q15 (Previous Year) 12 Month Forecast Total Inventory (Local Profile) 69M SF 69M SF 52M SF Vacancy Rate 6.4% 5.9% 7.2% Quarterly Net Absorption 83,365 -200,749 -389,060 Average Lease Rate $3.90 $3.91 $3.80 Under Construction 885,000 SF 120,000 16,440 Completed Construction 0 0 275,000 FORT WAYNE 2Q16 INDUSTRIAL MARKET INDUSTRIAL MARKET KEEPS UPWARD TRAJECTORY Northeast Indiana continues its upward trajectory as sale prices and lease rates increased during the first half of 2016. Key indicators suggest the industrial market will continue on a strong growth path that will positively impact the Fort Wayne industrial sector. Availability of industrial space continues to tighten, and companies looking to expand are finding fewer acceptable/desirable existing buildings for sale or lease. In the coming months, look for more build-to-suit developments to occur as expanding users are unable to fulfill their requirements with existing buildings. Expect sale prices and lease rates to continue to increase as landlords and sellers will have leverage over tenants and buyers. Economic Conditions The U.S. Bureau of Labor Statistics reported an unemployment rate of 4.0% for Fort Wayne in May 2016. According to the CES survey of employers, there were 200 jobs added in May for a total of 222,400 jobs. The CPS survey of households showed 208,162 employed persons for the month. Overall, the United States gained 38,000 jobs since last month and has a 4.7% unemployment rate. 69M SF 6.4% 83,365 SF $3.90 Total Inventory Vacancy Rate Net Absorption Average Lease Rate Under Construction Unemployment Rate 4.0% 900K SF 2% 4% 6% 8% 10% $1 $2 $3 $4 $5 2Q10 2Q11 2Q12 2Q13 2Q14 2Q15 2Q16 Average Lease Rate (Price/SF) Vacancy (%) MARKET PERFORMANCE www.cressyandeverett.com New Fort Wayne Office! We celebrate the opening of our new office located in the beautifully appointed 1st Source Bank building in downtown Fort Wayne, Indiana. Managing Director, Bill Drinkall, and brokers Zach Meyer and Gary Buschman, will oversee and actively market the strategic expansion of our firm’s territory into the Greater Fort Wayne area and the outlying northeast Indiana counties. Newmark Grubb Cressy & Everett 200 E. Main Street, Suite 540 Fort Wayne, Indiana AVERAGE LEASE RATE & VACANCY
Transcript
Page 1: INDUSTRIAL MARKET KEEPS AVERAGE LEASE RATE … Fort Wayne... · INDUSTRIAL MARKET KEEPS UPWARD TRAJECTORY Northeast Indiana continues its upward trajectory as sale prices and ...

MARKET AT A GLANCE

Research

2Q16

(Current Quarter)

1Q16

(Previous Quarter)

1Q15

(Previous Year)

12 Month

Forecast

Total Inventory

(Local Profile)69M SF 69M SF 52M SF

Vacancy Rate 6.4% 5.9% 7.2%

Quarterly Net Absorption 83,365 -200,749 -389,060

Average Lease Rate $3.90 $3.91 $3.80

Under Construction 885,000 SF 120,000 16,440

Completed Construction 0 0 275,000

FORT WAYNE2Q16 INDUSTRIAL MARKET

INDUSTRIAL MARKET KEEPS

UPWARD TRAJECTORY

Northeast Indiana continues its upward trajectory as sale prices and

lease rates increased during the first half of 2016. Key indicators

suggest the industrial market will continue on a strong growth path

that will positively impact the Fort Wayne industrial sector. Availability

of industrial space continues to tighten, and companies looking to

expand are finding fewer acceptable/desirable existing buildings for

sale or lease. In the coming months, look for more build-to-suit

developments to occur as expanding users are unable to fulfill their

requirements with existing buildings. Expect sale prices and lease

rates to continue to increase as landlords and sellers will have

leverage over tenants and buyers.

Economic ConditionsThe U.S. Bureau of Labor Statistics reported an unemployment rate of

4.0% for Fort Wayne in May 2016. According to the CES survey of

employers, there were 200 jobs added in May for a total of 222,400 jobs.

The CPS survey of households showed 208,162 employed persons for

the month. Overall, the United States gained 38,000 jobs since last

month and has a 4.7% unemployment rate.

69M SF 6.4% 83,365

SF$3.90

Total

Inventory

Vacancy

Rate

Net

Absorption

Average

Lease Rate

Under

Construction

Unemployment

Rate

4.0%900K

SF

2%

4%

6%

8%

10%

$1

$2

$3

$4

$5

2Q10 2Q11 2Q12 2Q13 2Q14 2Q15 2Q16

Average Lease Rate (Price/SF) Vacancy (%)

MARKET PERFORMANCE

www.cressyandeverett.com

New Fort Wayne Office!We celebrate the opening of our new

office located in the beautifully appointed

1st Source Bank building in downtown

Fort Wayne, Indiana. Managing Director,

Bill Drinkall, and brokers Zach Meyer

and Gary Buschman, will oversee and

actively market the strategic expansion

of our firm’s territory into the Greater

Fort Wayne area and the outlying

northeast Indiana counties.

Newmark Grubb Cressy & Everett

200 E. Main Street, Suite 540

Fort Wayne, Indiana

AVERAGE LEASE RATE & VACANCY

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2

Research

GE To Redevelop 1.2M Square-Foot Fort Wayne Campus

General Electric (GE), in collaboration with Greater Fort Wayne (GFW)

Inc., is searching for a developer and/or investor to redevelop the 1.2

million-square-foot GE Broadway Street campus. This campus has

been unoccupied since January 2015. Proposed development projects

like the $100 million riverfront, $30 million redevelopment of The Landing,

and $85 million downtown arena have played a role in GE’s choice to

begin the potential redevelopment process.

Fastener Manufacturer Invests $12M To Double Capacity

Cold Heading Co., a Michigan-based fastener manufacturer, announced.

plans to invest $12 million to double the size of its Fremont facilities, and

add up to 30 jobs by 2019. Plans include the construction of a 148,000

square-foot facility, allowing for additional production capacity.

Automotive Manufacturer Breaks Ground On $33.5M Facility

Michigan-based Continental Structural Plastics Inc. is expanding in

Huntington. The automotive manufacturer is planning to invest $33.5

million into a new facility next to its current Huntington operations. The

new 130,000-square-foot plant project is expected to add up to 80

workers by 2020.

Construction Begins On Multi-Million Cargo Transfer Facility

A $13.5 million cargo transfer facility going up on Fort Wayne’s southeast

side is going to make the transportation of goods more efficient and

competitive in the tri-state region. Indianapolis-based Transpoint

Intermodal — which already operates rail-fed container terminals in

Mexico — began construction June 28 on its first U.S. facility on 74 acres

near the northeast corner of Adams Center and E. Paulding Roads.

Walmart To Build Nation’s Largest Milk Processing Plant

Walmart, the nation’s largest grocer, will build a more than 250,000-

square-foot, $165 million milk processing plant in Fort Wayne, which is

expected to be one of the largest in the industry. The plant will provide

new opportunities for Indiana’s dairy industry, creating more than 200

good-paying jobs ranging from milk processing to transportation by the

end of 2017. “Today, Indiana’s agriculture industry contributes $31 billion

to the state’s economy and supports more than 100,000 Hoosier jobs,”

said Governor Mike Pence.

$650M In High-Profile Projects Planned For Downtown

Greater Fort Wayne, Inc. unveiled their grand agenda for the next

decade, including approximately $650 million in high-profile projects in

and near downtown Fort Wayne. Five main projects include a downtown

arena, redevelopment of The Landing, the north Riverfront project,

redevelopment of the old GE campus, and a STEAM park.

Future GE Campus | Fort Wayne, Indiana

FORT WAYNE2Q16 INDUSTRIAL MARKET

OUR MARKET IN MOTION

www.cressyandeverett.com

Cold Heading | Freemont, Indiana

Transpoint Intermodal | SE Fort Wayne, Indiana

Walmart Milk Processing Plant | South Fort Wayne, Indiana

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3

Research

FORT WAYNE2Q16 INDUSTRIAL MARKET

NOTABLE LEASE TRANSACTIONS

Tenant Building Submarket Type Square Feet

Mullinix Packages, Inc. 3405 Meyer Road Fort Wayne East Direct 321,600

Tradition Transportation Co. 300 Growth Parkway Fort Wayne Northeast Direct 73,000

Hunar Sakri Duesenburg, Inc. 3328-3330 Congressional Parkway Fort Wayne Northwest Direct 25,000

Newcomed FW, LLC 8414 Clinton Park Drive Fort Wayne Northwest Direct 19,500

NOTABLE SALE TRANSACTIONS

Building Submarket Sale Price Price/SF Square Feet

201 RE Jones Road Fort Wayne Northeast $5,100,000 $22.24 229,225

1400 N Detroit Street Fort Wayne Northwest $452,500 $20.67 21,885

2650 Congressional Parkway Fort Wayne Northwest $900,000 $69.44 12,960

2907 American Way Fort Wayne South (Airport Area) $530,000 $72.70 7,290

SUBMARKET STATISTICS

Submarket

Area

Total

Inventory

(SF)

Under

Construction

(SF)

Total

Vacancy

Rate (%)

Quarter

Absorption

(SF)

Warehouse/

Distribution

Lease Rates

(Price/SF)

R&D Flex

Lease Rates

(Price/SF)

Total Lease

Rates

(Price/SF)

Fort Wayne

Northeast13,525,504 60,000 4.4 -40,682 $3.70 $4.91 $4.30

Fort Wayne

Northwest4,491,944 N/A 6.2 278,222 $2.92 $4.62 $3.77

Fort Wayne

Southeast11,038,024 N/A 4.0 -155,500 $3.25 $4.80 $4.02

Fort Wayne

Southwest11,435,024 825,000 3.3 30,000 $3.65 $4.61 $4.13

Fort Wayne East 6,267,962 N/A 13.6 -125,356 $2.48 $4.60 $3.54

Fort Wayne CBD 1,556,123 N/A 1.6 20,012 $3.46 $4.51 $3.98

Fort Wayne South

(Airport Area)20,742,756 N/A 5.2 76,669 $2.87 $4.30 $3.58

TOTALS 69,057,337 885,000 6.4% 83,365 $3.19 $4.62 $3.90

www.cressyandeverett.com

Newmark Grubb Cressy & Everett (NGCE) quarterly market reports are a compilation of data from multiple sources. The data is reviewed quarterly and adjusted due to circumstances in the market, such as new construction and demolition.

The vacancy square footage is compiled from a combination of online data from multiple major listing services, broker provided listing information and industry knowledge. NGCE has created this report to provide the most accurate

information possible. We do not assume responsibility, however, for errors, omissions, prior sale, lease or withdrawal from the market.

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4

Research

FORT WAYNE2Q16 INDUSTRIAL MARKET

www.cressyandeverett.com

TOTAL

INVENTORY

UNITED STATES STATE LOCAL

TOTALINVENTORY

(SF) 15.1B 624.5M 69M

VACANCYRATE

6.2% 6.9% 6.4%

NETABSORPTION(% OF INVENTORY) 0.31% 0.26% 0.12%

AVERAGELEASE RATE

(PSF) $6.36 $3.55 $3.90

UNDERCONSTRUCTION

(SF) 153.8M 2.1M 885,000

UNEMPLOYMENTRATE

4.7% 5.0% 4.0%

HOW DO WE

COMPARE?

“Vacancy levels are expected to decline over the next 12 months which should boost developer

confidence levels enough to catalyze the construction of new speculative buildings. The City of

Fort Wayne is offering incentives to help with the carrying cost of assets built in their development

areas as a means of growing local businesses and attracting new business to the area.”

Bill Drinkall, Managing Director

Fort Wayne Office

Market Perspective

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All information contained in this publication is derived from sources that are deemed to be reliable. However, Newmark Grubb Cressy & Everett (NGCE) has not verified any such information, and the same constitutes the statements and representations only of the source thereof, and not of NGCE. Any recipient of this publication should independently verify such information and all other information that may be material to any decision that recipient may make in response to this publication, and should consult with professionals of the recipient’s choice with regard to all aspects of that decision, including its legal, financial, and tax aspects and implications. Any recipient of this publication may not, without the prior written approval of NGCE, distribute, disseminate, publish, transmit, copy, broadcast, upload, download, or in any other way reproduce this publication or any of the information it contains.

©2016. Newmark Grubb Cressy & Everett has implemented a proprietary database and our tracking methodology has been revised. With this expansion and refinement in

our data, there may be adjustments in historical statistics including availability, asking rents, absorption and effective rents.

Research

Bill DrinkallManaging Director

260.399.4057 (o)

260.715.3408 (c)

[email protected]

Years of Experience

15

Areas of Specialization

Medical

Office

Retail

Investment (All Segments)

Zach MeyerAssociate Broker

260.399.4057 (o)

260.417.2185 (c)

[email protected]

Years of Experience

4

Areas of Specialization

Industrial

Medical

Office

Retail

Meet Our Team

FORT WAYNE2Q16 INDUSTRIAL MARKET

www.cressyandeverett.com

Corporate Headquarters

4100 Edison Lakes Parkway

Suite 350

Mishawaka, IN 46545

574.271.4060

NEW!Fort Wayne Office

200 E. Main Street

Suite 540

Fort Wayne, IN 46802

260.399.4057

Grand Rapids Office

32 Market Street

Suite 302

Grand Rapids, MI 49503

616.456.6400

www.cressyandeverett.com

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