Industrial Outlook
Columbus | Q4 2016
Deliveries vs net absorption (m.s.f.)
Source: JLL Research
Q4 2016 transactions in Southeast submarket
Source: JLL Research
Deliveries by product type (s.f.)
Source: JLL Research
Demand hits record levels in 2016
In 2016, the Columbus market hit a record low with respect to vacancy, in addition
to record high net absorption. Deliveries outpaced the previous year, providing a
bump in demand for a record-setting year. New product was responsible for 4.0
million square feet of net absorption in 2016, while leasing activity was also driven
by existing inventory and accounted for 52.4 percent of overall net absorption.
Availability is as narrow as it’s ever been, providing an enticing landscape for new
construction throughout the Columbus region. While new construction
announcements for 2017 have yet to hit the market, rapid absorption of recently
completed speculative development, as well as a lack of availability of modern
inventory, indicate more projects are likely to break ground next year.
Rickenbacker availability continues to tighten
The Southeast submarket saw 1.4 million square feet of net absorption in the final
quarter of 2016, slashing warehouse availability to 11.3 percent and pushing
average total asking rents up $0.30 year-over-year, further tilting the balance of
the market in favor of landlords. This has emerged as a common trend for the
Columbus region, and with minimal space available, the Southeast submarket is
in a prime position for speculative construction. Meanwhile, with limited land
available for development in the submarket, Northpoint continued its advance in
Columbus with an additional land purchase just south of the Rickenbacker Inland
Port in Pickaway County, which may signal the emergence of another submarket
option for new development.
Tenant demand for modern space driving development
Logistics and e-commerce operations spurred warehouse development
throughout the Columbus market with over 4.0 million square feet of deliveries in
2016. Demand for modern, customizable space is impelling investment and
shaping the size and type of new construction; of the eight warehouse
completions, seven are over 400,000 square feet. With that said, the market is
also seeing an unprecedented amount of investment from manufacturers. Only
578,000 square feet of manufacturing space was built from 2013 to 2015, and
over 800,000 square feet was built in 2016 alone, with a 1.4 million square-foot
BTS project in Pickaway County currently under construction.
Warehouse demand soars to close out record year
Industrial Insight
Columbus | Q4 2016
$3.73Average total asking rent
2,424,975Total under construction (s.f.)
1,642,869Quarterly completions (s.f.)
8,415,888YTD net absorption (s.f.)
5.3%Total vacancy
1,503,196Planned construction (s.f.)
2,914,802Quarterly net absorption (s.f.)
246,603,780Market size (s.f.)
JLL | Columbus | Industrial Outlook | Q4 2016
Tenant Building Type Size (s.f.)
DHL Creekside IX New lease 426,408
West-Ward Pharmaceuticals 2130 Rohr Rd BTS delivered 275,869
3PL for Hankook Tire Rickenbacker 8 New lease 255,070
Schoola 1655 Watkins Rd Expansion 115,920
3.0%
4.0%
5.0%
6.0%
7.0%
-
2
4
6
8
10
2014 2015 2016
Speculative BTS Net Absorption Vacancy
834,284
100,000
4,668,206
Manufacturing R&D/Flex Warehouse
Projects under construction by submarket (s.f.) Average total asking rent ($ p.s.f.)
Source: JLL Research
Notable sales in 2016 Notable leases signed in the fourth quarter
Source: JLL Research
Large block availabilities Net absorption & overall vacancy rate
Source: JLL Research
Industrial property clock New construction deliveries (s.f.)
Source: JLL Research Source: JLL Research
$3.33
$3.42 $3.43
$3.52
$3.61
$3.73
$3.00
$3.30
$3.60
$3.90
2011 2012 2013 2014 2015 2016
1,183,000
2,096,000
5,660,000
2,818,000
5,602,490
0
2,000,000
4,000,000
6,000,000
2012 2013 2014 2015 2016
Property Submarket Tenant Leased s.f.
Creekside IX Southeast DHL 426,408
Prologis Capital Park South 11 Southwest Staples 340,704
Rickenbacker 8 Southeast 3PL for Hankook Tire 255,070
1655 Watkins Rd Southeast Schoola 115,920
5830 Green Pointe Dr Southeast Shiseido 114,239
6150 Huntley Ave North STC 73,000
0.0%
4.0%
8.0%
12.0%
0
2,500,000
5,000,000
7,500,000
10,000,000
2011 2012 2013 2014 2015 2016
Net absorption Total vacancyExisting Under Construction
Size range Class A Class B Class C Class A Class B
100-249 k.s.f. 12 6 2 0 0
250-499 k.s.f. 10 2 0 2 0
500-749 k.s.f. 2 1 0 0 0
Property Buyer Bldg s.f. $ p.s.f
Amazon at Prologis Park 70 GC Essential Asset REIT II 855,000 $103.97
SouthPark VIII Exeter Property Group 393,696 $31.35
SouthPark VII Exeter Property Group 393,232 $31.35
2652 Fisher Road Diamond Properties 391,000 $21.71
5920 Green Pointe Drive South Clarion Partners 354,000 $53.56
Alum Creek Distribution Center 1 Ares Capital Corporation 306,000 $30.23
Land
lord
leve
rage
Tenant leverage
Peaking
market
Falling
market
Bottoming
marketRising
market
Source: JLL Research
Source: JLL Research
Source: JLL Research
Columbus Q4 ‘15
Columbus Q4 ‘14
JLL | Columbus | Industrial Outlook | Q4 2016
1,400,000
322,000 264,000 200,000 178,97560,000
0
400,000
800,000
1,200,000
1,600,000
PickawayCounty
Southwest LickingCounty
West Southeast DelawareCounty
Columbus Q4 ‘16
Industrial Statistics
Columbus | Q4 2016
JLL | Columbus | Industrial Outlook | Q4 2016
Inventory
(s.f.)
Quarterly
total net
absorption
(s.f.)
YTD
total net
absorption
(s.f.)
YTD
total net
absorption
(% of stock)
Total
vacancy
(%)
Total
availability
(%)
Average
total asking
rent
($ p.s.f.)
Quarterly
completions
(s.f.)
YTD
completions
(s.f.)
Under
construction
(s.f.)
Columbus Totals
Warehouse & Distribution 191,394,884 2,087,827 7,366,909 3.8% 5.6% 8.4% $3.74 842,869 4,668,206 1,024,975
Manufacturing 33,474,555 826,975 1,048,979 3.1% 3.7% 7.2% $3.64 700,000 834,284 1,400,000
Total Industrial 224,869,439 2,914,802 8,415,888 3.7% 5.3% 8.2% $3.73 1,542,869 5,502,490 2,424,975
Flex / R&D 21,734,341 -40,231 313,271 1.4% 4.1% 7.7% $6.05 100,000 100,000 72,000
CBD
Warehouse & Distribution 1,663,135 0 0 0.0% 0.0% 0.0% $4.25 0 0 0
Manufacturing 573,948 0 0 0.0% 0.0% 0.0% $4.15 0 0 0
Total Industrial 2,237,083 0 0 0.0% 0.0% 0.0% $4.15 0 0 0
Flex / R&D 134,453 0 3,355 2.5% 0.0% 0.0% $5.00 0 0 0
North
Warehouse & Distribution 12,572,097 34,765 464,215 3.7% 1.4% 3.0% $5.15 0 0 0
Manufacturing 1,075,041 0 0 0.0% 1.2% 1.2% $5.25 0 0 0
Total Industrial 13,647,138 34,765 464,215 3.4% 1.4% 2.8% $5.15 0 0 0
Flex / R&D 4,817,688 -28,451 -53,277 -1.1% 4.7% 7.5% $7.42 0 0 0
East
Warehouse & Distribution 18,963,743 63,020 170,434 0.9% 1.7% 2.7% $4.73 0 140,000 0
Manufacturing 3,566,879 582,885 599,885 16.8% 7.5% 13.4% $4.05 600,000 600,000 0
Total Industrial 22,530,622 645,905 770,319 3.4% 2.6% 4.4% $4.40 600,000 740,000 0
Flex / R&D 4,051,335 -15,612 120,814 3.0% 3.6% 7.1% $6.43 100,000 100,000 0
Southeast
Warehouse & Distribution 71,645,291 1,246,448 4,440,895 6.2% 9.1% 11.3% $3.72 842,869 3,673,206 178,975
Manufacturing 5,921,348 197,600 260,600 4.4% 2.6% 9.5% $3.00 100,000 100,000 0
Total Industrial 77,566,639 1,444,048 4,701,495 6.1% 8.6% 11.2% $3.67 942,869 3,773,206 178,975
Flex / R&D 2,699,188 -5,984 27,223 1.0% 2.0% 5.2% $5.39 0 0 0
Southwest
Warehouse & Distribution 17,942,525 389,775 482,797 2.7% 4.7% 9.5% $3.82 0 0 322000
Manufacturing 968,653 0 158,615 16.4% 0.0% 5.8% $3.15 0 67,000 0
Total Industrial 18,911,178 389,775 641,412 3.4% 4.4% 9.3% $3.80 0 67,000 322,000
Flex / R&D 1,698,335 0 58,224 3.4% 2.2% 19.2% $5.61 0 0 0
West
Warehouse & Distribution 30,139,024 272,302 519,870 1.7% 3.8% 9.0% $3.39 0 0 200,000
Manufacturing 2,154,559 45,240 -31,223 -1.4% 2.1% 3.3% $3.54 0 0 0
Total Industrial 32,293,583 317,542 488,647 1.5% 3.7% 8.6% $3.39 0 0 200,000
Flex / R&D 5,656,351 13,316 141,103 2.5% 4.1% 5.6% $5.55 0 0 72,000
Outlying
Warehouse & Distribution 38,469,069 81,517 1,288,698 3.3% 4.3% 6.9% $3.67 0 855,000 324000
Manufacturing 19,214,127 1,250 61,102 0.3% 4.1% 6.4% $3.79 0 67,284 1400000
Total Industrial 57,683,196 82,767 1,349,800 2.3% 4.2% 6.7% $3.71 0 922,284 1,724,000
Flex / R&D 2,676,991 -3,500 15,829 0.6% 7.1% 9.1% $5.22 0 0 0
Industrial Development Report
Columbus | Q4 2016
JLL | Columbus | Industrial Outlook | Q4 2016
This report analyzes all industrial developments under construction & new deliveries > 30,000 s.f.
Total leased at delivery (%) 67.0%
Total speculative at delivery (s.f.) 2,216,337
Total BTS at delivery (s.f.) 2,619,153
Total Owner-User at delivery (s.f.) 767,000
Total # of properties delivered 14
Asking rental rate (low - high) $3.50 - $4.25
Top 5 projects delivered to date
Building RBA (s.f.) Delivery dateLeased at
delivery (%)
Amazon Fulfillment Center 1,000,000 Q3 2016 100%
Amazon Distribution Center 855,000 Q3 2016 100%
Rogue Fitness 600,000 Q4 2016 100%
3219 Rohr Road 567,000 Q4 2016 0%
Duke Building 482 482,220 Q1 2016 53%
Total pre-leased (%) 69.7%
Total speculative under construction (s.f.) 824,975
Total BTS under construction (s.f.) 1,600,000
Total Owner-user under construction (s.f.) -
Total # of properties UC 6
Asking rental rate (low - high) $3.95 - $4.95
Top 5 projects currently under construction
Building RBA (s.f.) Delivery date Pre-leased (%)
Sofidel Plant 1,400,000 Q1 2017 100%
Southpark Place 322,000 Q2 2017 0%
8820 Smith's Mill Rd 264,000 Q2 2017 0%
845 Kaderly Dr 200,000 Q2 2017 100%
RGLP Gateway 179 178,975 Q2 2017 50%
Speculative
Owner-user
BTS
Submarket
Under construction
2,424,975Under construction (s.f.)
Under construction in-depth
Upcoming deliveries by year (s.f., excludes YTD completions)
New deliveries
Completions in-depth
5,602,490Total delivered YTD (s.f.)
Historical deliveries (s.f.)
Construction typeOwnerSubmarket
Southeast
Southeast
East
Licking County
Southeast
Duke Realty
VanTrust
1047 Cleveland LLC
Prologis
Duke Realty
Speculative
BTS
Southeast
West
Licking County
Southwest
Pickaway County
Speculative
BTS
Owner Construction type
Speculative
Duke Realty
Jim Pattison Developments
Pizzuti
Becknell Industrial
Pewamo Ltd
Speculative
BTS
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
2011 2012 2013 2014 2015 2016
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
Under construction
2017
BTS Owner-user Speculative
Industrial Sales Activity
Columbus | Q4 2016
JLL | Columbus | Industrial Outlook | Q4 2016
This report analyzes all industrial sales > 10,000 / 30,000 s.f.
$277,363,768
30
$49
6.6%
85.2%
5.8%
5-6.5% 0 1 $3,815,641
6.5-7.5% 31 $225,214,248
Top 10 sales transactions past two quarters
Size (s.f.) $ p.s.f. Sale date
855,000 $104 Nov-16
354,000 $54 Mar-16
226,800 $61 Nov-16
393,696 $31 Feb-16
393,232 $31 Feb-16
290,606 $41 Feb-16
241,334 $47 Jul-16
306,000 $30 Jul-16
391,000 $22 Feb-16
184,152 $43 Apr-16
Waxman Industries
VanTrust Real Estate
Invesco Advisors
Invesco Advisors
$18,961,297
$13,900,000
$12,350,000
$12,350,000
2829-2843 Charter St Dalfen Hackman Capital $7,986,672
4458 Alum Creek Dr Ares Capital Corporation Prologis $9,250,000
2652 Fisher Rd Diamond Properties Garrison Investment Group $8,488,223
Invesco Advisors $12,040,000
8170 Dove Pkwy Ares Capital Corporation Prologis $11,250,000
3655 Brookham Dr Alaska Permanent Fund (APFC)
3357 Southpark Pl Exeter Property Group
3423 Southpark Pl Exeter Property Group
5920 Green Pointe Dr S Clarion Partners
3360 Southwest Blvd WPT Industrial
11999 National Rd SW GC Essential Asset REIT II Prologis $88,900,000
Building address Buyer company Seller company Sales price $
Sales volume $ by submarket
Warehouse/Dist. sales volume as
% of total YTD
Flex/R&D sales volume as % of
total YTD
Cap rate range
Core Class A Ind.
Core Class A Flex
Average Class A price p.s.f. YTD
At a glance
Total volume YTD
Number of transactions YTD
Average Class A cap rate YTD
Sales activity by building type
Transactions details
Number of partial interest
transactions
Top sellers (s.f.)Top buyers (s.f.)
Number of domestic buyers
Foreign capital $
Average partial interest acquired
Number of foreign buyers
Domestic Capital $
6,726,565 s.f.
356,631 s.f. 304,566 s.f.
$257,278,768
$16,185,000 $3,900,000
0 s.f.
1,000,000 s.f.
2,000,000 s.f.
3,000,000 s.f.
4,000,000 s.f.
5,000,000 s.f.
6,000,000 s.f.
7,000,000 s.f.
8,000,000 s.f.
$0
$50,000,000
$100,000,000
$150,000,000
$200,000,000
$250,000,000
$300,000,000
Warehouse / Distribution Flex/R&D Manufacturing
Sum of Price ($) Sum of RBA (SF)
23%
14%
12%11%
10%
10%
8%
7%5%
Other Cabot Properties
GC Essential Asset REIT II Exeter Property Group
Dalfen Diamond Properties
Alaska Permanent Fund (APFC) Ares Capital Corporation
Clarion Partners
19%
18%
17%
14%
10%
8%
5%
4%4%
Prologis Invesco Advisors
Other NorthPoint Development
Garrison Investment Group Hackman Capital
Waxman Industries Invesco RE
Midwest Highfield Drive Industrial
$88,900,000
$71,560,400
$50,847,071
$35,856,297
$17,200,000
$11,250,000
$1,750,000
Licking County
Southwest
West
Southeast
DelawareCounty
FairfieldCounty
East
Industrial employment trends (12-month change, 000s): Columbus
Industrial Employment Update
Employment vs. unemployment rate: Columbus
0.0%
2.0%
4.0%
2011 2012 2013 2014 2015 2016
Columbus United States
JLL | Columbus | Industrial Outlook | Q4 2016
-2,100
-200
800
1,100
1,100
1,100
2,600
3,600
3,800
6,900
-4,850-2,850 -850 1,150 3,150 5,150 7,150 9,150
Trade, Transportation & Utilities
Information
Mining, Logging & Construction
Manufacturing
Financial Activities
Other Services
Educational & Health Services
Leisure & Hospitality
Government
Professional & Business Services
0%
3%
6%
9%
12%
780,000
840,000
900,000
960,000
1,020,000
1,080,000
1,140,000
2006 2008 2010 2012 2014 2016
Nonfarm employment
Unemployment
Trade, Transportation & Utilities, 196,200 ,
18%
Professional & Business Services,
185,900 , 17%
Government, 174,800 , 16%
Educational & Health Services, 155,700 , 14%
Leisure & Hospitality, 107,400 , 10%
Financial Activities, 81,500 , 8%
Manufacturing, 73,300 , 7%
Other Services, 41,800 , 4%
Mining, Logging & Construction, 38,400 , 4%
Information, 16,600 , 2%
Job growth (12-month change): United State vs. Columbus
Job growth/loss by sector (12-month change): Columbus
4.6%U.S. unemployment
1.6%U.S. 12-month job growth
3.9%Columbus unemployment
1.4%Columbus 12-month job growth
4.9%Ohio unemployment
0.9%Ohio 12-month job growth
Industry employment stratification: Columbus
-5.0
5.0
15.0
2011 2012 2013 2014 2015 2016
Trade,Transportation & Utilities Manufacturing
Other Services Mining, Logging & Construction
Columbus | Q4 2016
Industrial Submarket Map
Notable construction projects
JLL | Columbus | Industrial Outlook | Q4 2016
RGLP Gateway 179
Tenant: N/A
Square feet: 178,975
Landlord: Duke Realty
Estimated completion:
Q2 2017
Southpark Place
Tenant: N/A
Square feet: 322,000
Landlord: Becknell Industrial
Estimated completion:
Q2 2017
Sofidel Plant
Tenant: Sofidel Group
Square feet: 1,400,000
Landlord: Pewamo Ltd
Estimated completion:
Q3 2017
8820 Smith’s Mill Rd
Tenant: N/A
Square feet: 264,000
Landlord: Prologis
Estimated completion:
Q3 2017
For more information, please contact:
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COPYRIGHT © JONES LANG LASALLE IP, INC. 2016
Andrew Batson
Vice President, Director of Research
Great Lakes Region
+1 216 937 4374
Sam Stouffer
Research Analyst
Great Lakes Region
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