Research 3Q16 (Current Quarter) 2Q16 (Previous Quarter) 2Q15 (Previous Year) 12 Month Forecast Total Inventory (Local Profile) 85.8M SF 85.5M SF 45.1M SF Vacancy Rate 2.0% 1.8% 3.7% Quarterly Net Absorption -251,815 270,140 105,844 Average Lease Rate $2.64 $2.59 $2.51 Under Construction 478,000 810,500 0 Completed Construction 332,500 0 0 ELKHART COUNTY 3Q16 INDUSTRIAL MARKET LEASE RATES TICK UPWARD AS INVENTORY CONTINUES TO TIGHTEN The overall Elkhart/Goshen industrial market recorded a 2.0 vacancy rate for the third quarter of 2016, an increase of 20 basis points from second quarter 2016. The market has kept an upward but steady pace with approximately -251,815 square feet of absorption. Average asking rental rates inched a few cents per square foot, rounding out the quarter with an average rate of $2.64 per square foot. There remains a total of 478,000 square feet under construction, keeping with the trend of the area’s demand for newer and larger owner/occupied buildings that can accommodate Elkhart County’s booming manufacturing economy. Leading the county into the epicenter of successful growth is the recreational vehicle (RV) industry. According to a recent survey conducted by the Reston, VA-based Recreation Vehicle Industry Association, the RV industry had an overall contribution of $49.7 billion to the U.S. economy in 2015 and accounted for 289,852 American jobs. Of that economic impact, $4.6 billion occurred in Elkhart County, and the study went on to find that more than 80 percent of the nation’s RVs are made in northern Indiana. Economic Conditions The U.S. Bureau of Labor Statistics reported an unemployment rate of 4.0% for Elkhart County in August 2016. According to the CES survey of employers, there were 1,900 jobs added in August for a total of 125,400 jobs. The CPS survey of households showed 100,702 employed persons for the month. Overall, the United States gained 255,000 jobs since last month and has a 4.9% unemployment rate. .. MARKET PERFORMANCE www.cressyandeverett.com 0% 3% 6% 9% 12% $1 $2 $3 $4 $5 3Q11 3Q12 3Q13 3Q14 3Q15 3Q16 Average Lease Rate (Price/SF) Vacancy (%) ASKING LEASE RATE & VACANCY 85.8M 2.0% -251,815 SF $2.64 Total Inventory Vacancy Rate Net Absorption Average Lease Rate Under Construction Unemployment Rate 4.0% 478K SF MARKET AT A GLANCE
Transcript
Research
3Q16
(Current Quarter)
2Q16
(Previous Quarter)
2Q15
(Previous Year)
12 Month
Forecast
Total Inventory
(Local Profile)85.8M SF 85.5M SF 45.1M SF
Vacancy Rate 2.0% 1.8% 3.7%
Quarterly Net Absorption -251,815 270,140 105,844
Average Lease Rate $2.64 $2.59 $2.51
Under Construction 478,000 810,500 0
Completed Construction 332,500 0 0
ELKHART COUNTY3Q16 INDUSTRIAL MARKET
LEASE RATES TICK UPWARD
AS INVENTORY CONTINUES
TO TIGHTEN
The overall Elkhart/Goshen industrial market recorded a 2.0 vacancy rate
for the third quarter of 2016, an increase of 20 basis points from second
quarter 2016. The market has kept an upward but steady pace with
approximately -251,815 square feet of absorption. Average asking rental
rates inched a few cents per square foot, rounding out the quarter with an
average rate of $2.64 per square foot.
There remains a total of 478,000 square feet under construction, keeping
with the trend of the area’s demand for newer and larger owner/occupied
buildings that can accommodate Elkhart County’s booming
manufacturing economy. Leading the county into the epicenter of
successful growth is the recreational vehicle (RV) industry. According to a
recent survey conducted by the Reston, VA-based Recreation Vehicle
Industry Association, the RV industry had an overall contribution of $49.7
billion to the U.S. economy in 2015 and accounted for 289,852 American
jobs. Of that economic impact, $4.6 billion occurred in Elkhart County,
and the study went on to find that more than 80 percent of the nation’s
RVs are made in northern Indiana.
Economic ConditionsThe U.S. Bureau of Labor Statistics reported an unemployment rate of
4.0% for Elkhart County in August 2016. According to the CES survey of
employers, there were 1,900 jobs added in August for a total of 125,400
jobs. The CPS survey of households showed 100,702 employed persons
for the month. Overall, the United States gained 255,000 jobs since last
month and has a 4.9% unemployment rate.
..
MARKET PERFORMANCE
www.cressyandeverett.com
0%
3%
6%
9%
12%
$1
$2
$3
$4
$5
3Q11 3Q12 3Q13 3Q14 3Q15 3Q16
Average Lease Rate (Price/SF) Vacancy (%)
ASKING LEASE RATE & VACANCY
85.8M 2.0% -251,815
SF$2.64
Total
Inventory
Vacancy
Rate
Net
Absorption
Average
Lease Rate
Under
Construction
Unemployment
Rate
4.0%478K
SF
MARKET AT A GLANCE
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OUR MARKET IN MOTION
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ELKHART COUNTY3Q16 INDUSTRIAL MARKET
Winnebago Inks $500M Purchase Of Grand Design
Winnebago recently acquired privately held towable recreation vehicle
producer, Grand Design Recreational Vehicle Company, for $500 million.
Per the deal, Winnebago will own Grand Design’s tax assets valued at
$75 million. Excluding the cost of assets, Winnebago’s purchase price
implies paying 7.1 times Grand Design’s prior 12 month earnings before
interest, taxes, depreciation and amortization (EBITDA) of $60 million.
The combined company will generate roughly $1.4 billion in revenue, in
addition to enhancing Winnebago’s growth, profit margins and earnings.
Three RV industry veterans launched Grand Design in 2012. The
company has grown quickly to be fourth largest manufacturer of towable
recreational vehicles, employing about 800 people.
RV Manufacturer Opens New $5.7M Plant
Shipshewana-based Highland Ridge RV recently opened a new
manufacturing facility. The $5.7 million facility is expected to create up to
65 jobs by 2019. The company said the 92,000 square-foot facility will
allow for production of its light and ultra-light trailers to double.
Food Processor Announces $5.3M Bristol Expansion
A Tennessee company has announced its second Elkhart County
Expansion in a year. Monogram Food Solutions, LLC is planning to
invest $5.3 million into improvements to its Bristol facility and add up to 74
more jobs by the end of 2016. In 2015, the food product manufacturer
announced a $13 million investment and 75 jobs at the northern Indiana
plant, an employment target Monogram Foods has already exceeded.
*Wanee submarket has been added to Elkhart South submarket.**Middlebury submarket has been added to Goshen submarket.
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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“Vacancy for advertised industrial space is hovering around the historically low rate of 2.0% for the
second straight quarter. This trend is largely attributable to the thriving recreational vehicle industry in
Elkhart County and is expected to continue through the fourth quarter of 2016. Few existing
manufacturing and warehouse buildings larger than 30,000 square-feet are available for sale or for lease
at this time, and the strong demand for these buildings should lead to future land sales and more new
construction.”
Ryan Gableman, Senior Broker
Elkhart Office
Market Perspective
ELKHART COUNTY3Q16 INDUSTRIAL MARKET
TOTAL
INVENTORY
UNITED STATES STATE LOCAL
TOTALINVENTORY
(SF) 14.3B 737.9M 85.8M
VACANCYRATE
5.8% 5.6% 2.0%
NETABSORPTION(% OF INVENTORY) 0.53% -0.1% -0.29%
AVERAGELEASE RATE
(PSF) $5.96 $3.31 $2.64
UNDERCONSTRUCTION
(SF) 191.8M 6.7M 478,000
UNEMPLOYMENTRATE
4.9% 4.5% 4.0%
HOW DO WE COMPARE?
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ELKHART COUNTY3Q16 INDUSTRIAL MARKET
OUR FEATURED LISTINGS
3002 Coast Court | Elkhart, Indiana
Size: 114,900 SF
Lease Rate: $3.50 PSF NNNNew to the market, this high-ceiling 114,900 square-foot warehouse/
distribution facility on 6.42 acres is ready for lease. The building consists
of 104,000 square-foot of warehouse space with a mezzanine area, and a
10,500 square-foot two-story air conditioned office space. Clear ceiling
heights in the warehouse range form 22’ to 26’ and bay spacing of 48’ x
24’. There are 17 recessed loading docks, two grade-level overhead
doors, air rotation heat systems, T-5 lighting and 600 Amp/240 Volt/3-
phase electric.
Located on the north side of Elkhart, the property is adjacent to the I-
80/90 Toll Road at Exit 92. The property’s close proximity to the
Interstate makes it an ideal location for a distribution facility.
Additionally the property is one-quarter mile from one of Elkhart’s main
commercial corridors, which also serves as a major thoroughfare
Minimum/Maximum Contiguous: 25,200 SF to 118,387 SFEstablished four building warehouse/manufacturing industrial complex
totaling 197,267 square feet on approximately 20.5 +/- acres. The campus
offers a number of amenities ideal for both a single or multi-tenant user.
The buildings range from 16’ to 28’ ceiling height, all buildings have T-8
lighting, heavy power, wet or dry sprinkled, and include a total of 54
overhead doors. Buildings are supplied by municipal sewer and water,
electric and natural gas. The utility infrastructure is ideal for
manufacturing uses and the land-to-building ratio is good with
adequate access around the existing facilities, and the excess land to
the north for outside storage or for constructing additional
improvements. Located within a TIF district, the property is situated on
E. Kercher Road just west of US 33 in the heart of vehicle
manufacturing. The property features excellent trucking access to US
33, US 6, US 20 and the I-80/90 Toll Road.
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.
