chicago metropolitan industrial market overview november 16 2010 prepared by: george cutro colliers...
TRANSCRIPT
Chicago Metropolitan Industrial Market Overview
November 16 2010
Prepared by:
George Cutro
Colliers International
Industrial Market Presentation Outline
Chicago’s Industrial Market Statistics
Chicago’s “Core” Markets
Central DuPage Fox Valley I-55 Lake County North Suburbs O’Hare
Largest Transactions of 2010
Changes and Industry Trends
Chicago Industrial Market Area
Metro Chicago Gross Absorption
31.68
Sq.
Ft.
Mill
ions
46.88 49.72 46.87 59.78 57.20 53.3843.37 46.06 45.5 38.56
Metro Chicago Construction Deliveries
2.08
Sq.
Ft.
Mill
ions
19.85 12.27 13.36 15.22 17.54 20.90 20.86 21.84 19.10 6.80
Metro Chicago Net AbsorptionS
q. F
t. M
illio
ns
Metro Chicago Vacancy Rates
Central DuPage
Inventory 83.97 msfAvailable SF 9.93 msfVacancy Rate 11.83 %
YTD Leasing Volume (sf) 1.44 msf YTD Sales Volume (sf) 197,300 sfYTD Net Absorption (sf) -683,000 sf
Central DuPage Notes
• Vacancy rate climbs!
• 2010 leasing volume down.
• Demand up for buildings for sale.
• Rents higher for “Core” product near I-355 expressway.
Fox Valley
Inventory 89.10 msfAvailable SF 12.06 msfVacancy Rate 13.54 %
YTD Leasing Volume (sf) 1.56 msf YTD Sales Volume (sf) 1.40 msfYTD Net Absorption (sf) 1.34 msf
Fox Valley Notes
• Available supply dropping
• Sale volume spikes
• Positive absorption!
I-55 Corridor
Inventory 72.94 msfAvailable SF 12.87 msfVacancy Rate 17.64 %
YTD Leasing Volume (sf) 2.33 msf YTD Sales Volume (sf) 666,700 sfYTD Net Absorption (sf) -1.39 msf
I-55 Corridor Notes
• YTD leasing volume down.
• Net absorption negative!
• Speculate development non-existent
• 17.64 % highest vacancy rate ever!
Lake County
Inventory 69.95 msfAvailable SF 10.15 msfVacancy Rate 14.51 %
YTD Leasing Volume (sf) 1.20 msf YTD Sales Volume (sf) 401,000 sf YTD Net Absorption (sf) -640,500 sf
Lake County
• Vacancy rate falls!
• Third quarter net absorption posts positive
results!
• Local company expands presence in
market.
North Suburbs
Inventory 57.65 msfAvailable SF 5.90 msfVacancy Rate 10.23 %
YTD Leasing Volume (sf) 255,700 sf YTD Sales Volume (sf) 172,700 sf YTD Net Absorption (sf) -2.33 msf
North Suburbs
• Vacancy rate at all-time high.
• Inventory continues to shrink.
• Sale activity Anemic!
O’Hare
Inventory 140.18 msfAvailable SF 17.50 msfVacancy Rate 12.48 %
YTD Leasing Volume (sf) 3.91 msf YTD Sales Volume (sf) 524,200 sfYTD Net Absorption (sf) -644,100 sf
O’Hare Notes
• Vacancy rate hits all time high.
• Leasing activity up.
• 6B Tax program still obtainable.
• Freight forwarders in play
Top Lease Transactions 2010
Clorox 1,350,000 sf Far South
World Kitchen, LLC 700,200 sf Far South
3M 650,000 sf DeKalb Co.
Sony Music Entertainment 579,900 sf I-55
BP North American 574,300 sf NW Ind.
Jacobson Companies “Fonterra Milk Prdts” 507,200 sf I-80
AGL Direct 499,200 sf I-55
Midwest Custom Case, Inc. 455,900 sf Far South
NACA Logistics USA, Inc. 440,200 sf Central DuPage
Hosely International Trading Company 376,000 sf NW Ind.
Top User Sale Transactions
Uline 1,000,000 sf SE Wis.
Freudenberg Household Products 525,000 sf I-88
R. R. Donnelley 514,000 sf I-88
MAT Holdings 506,800 sf I-55
Ionian, LLC 492,800 sf Chicago
Gordon Food Service 480,000 sf SE Wis.
The Jel Sert Company 304,500 sf I-88
GRM Information Management Svc’s 296,100 sf South Subs.
Ascent Corporation 284,200 sf I-290 North
EMCO Chemical Distributors 259,600 sf SE Wis.
Metro Chicago Trends
• Speculative development dead, however BTS construction volume up
• Institution/REIT Landlords compete hard for deals
• Land prices falling???
• Cap rates for “Core Product” falling
• Some landlords not competing for high TI transactions
• Ownership stability