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Industrial Market ReportWest Michigan Q1 2015
100 Grandville Ave SW Suite 100Grand Rapids, MI 49503616. 776. 0100 www.naiwwm.com
Wisinski ofWest Michigan
Office • Industrial • Retail • Multi-Family
Storing, sorting and moving products -With growth comes occupancy During the first quarter of 2015 the West Michigan Industrial Market continued its expansion that has been the face of the commercial real estate market over the last two to three years. While growth was a bit slower due to some adverse weather, it is anticipated that once Spring arrives the economic activity will once again pick up to levels seen during 2014. This was the case during 2014 where there was actually a significant decrease in economic activity dur-ing the first quarter due to weather circumstance. We are confident this slowdown is temporary.
Quality manufacturing space remains in short sup-ply throughout West Michigan with a number of buildings previously purposed for warehousing operations being converted to manufacturing facilities. It is expected that this trend will continue given the lack of available options for those needing manufacturing space. The current va-cancy rate in the West Michigan Industrial Market is hov-ering around 5% and it is anticipated that the market will continue to tighten up. New construction is being talked about with a greater level of frequency given the lack of existing product available in the marketplace. This trend is expected to continue.
* The information contained herein has been given to us by sources we deem reliable. We have no reason to doubt its accuracy, however, we do not make any guarantees. All information should be verified before relying thereon.
* Source: NAIWisinskiofWestMI, CoStar Property®, & U.S. Bureau of Labor Statistics
“There continues to remain
upward pressure on both sale
prices and lease rates. Landlord
incentive packages on the
leasing side have been reduced
to a minimum.
NAI Wisinski of West
Michigan anticipates the
second quarter growth to
accelerate out of the Winter
doldrums and there will
be continued downward
pressure on the vacancy
rate.”
GRAND RAPIDS, MI
The Market
- Stu Kingma, SIOR Principal | NAI Member
Total Employment GrowthHighlight Total Number of Jobs Added per Year
Recent Lease Transactions, January - March 2015Address Size (SF) Tenant Lease Type
2555 28th St SW 17,304 Prebuck LLC New3236 Wilson Dr. NW 130,000 Plasan Carbon Composites New
4310 Roger B Chaffee Memorial Dr 12,358 Finishmaster Inc. New106 54th St SW 5,497 Fresenius USA Mtg, Inc. New335 Griffen St 20,000 Jost International New
Recent Sales Transactions, January - March 2015Address Size (SF) Sale Price Price PSF Sale Date
2849 Michigan Street NE N/A $890,000 N/A 1/28/20155041 68th Street SE 85,400 $1,965,000 $23.01 2/18/2015
5285 Edgewater Drive 45,456 $1,580,000 $34.76 3/02/20151060 Hall Street 70,100 $750,000 $10.70 4/03/2015
3690 Jefferson Ave 10,500 $360,000 $34.29 1/20/2015
The vacancy ratewas down over the previous quarter
West MI Economic Trends
Absorption, Deliveries, Vacancy
ABS
ORP
TIO
N &
DEL
IVER
IES
IN M
ILLI
ON
S (S
F)
VAC
AN
CY RATE
The unemplopyment rate in Grand Rapids is down 2.2% from March 2014
Net absorption for the overall West Michigan Industrial market was positive 744,286 square feet in the first quarter2015
West MichiganIndustrial Submarket Statistics
Industrial Statistical Changes
CONSTRUCTION
CONSTRUCTION
ASKING RATES
ASKING RATES
VACANCY RATE
VACANCY RATE
NET ABSORPTION
NET ABSORPTION
4Q14 vs. 1Q15
1Q14 vs. 1Q15
2015 Q1 Industrial Snapshot Submarket Total RBA Total
Available SFVacancy
RateTotal Average
NNN Rate ($/SF/Yr)Total Net
Absorption (SF)Total Under
Construction SF
LakeshoreWarehouse 9,745,454 759,149 5.3% $2.81 -13,800 -Manufacturing 23,701,414 1,496,698 5.4% $2.68 46,817 -Hightech Flex 989,227 59,186 1.4% $6.32 6,636 -Total 34,436,095 2,315,033 6.7% $3.94 39,653 -NortheastWarehouse 4,878,986 321,530 5.1% $5.16 -7,127 -
Manufacturing 7,297,812 1,118,771 11.9% $3.61 9,228 -Hightech Flex 661,356 40,620 1.4% $4.80 - -Total 12,838154 1,480,921 11.5% $4.52 2,101 -NorthwestWarehouse 4,290,866 592,443 11.5% $3.25 8,000 -Manufacturing 12,827,763 1,017,715 5.1% $3.13 -73,495 -Hightech Flex 1,223,814 500 0.0% $6.50 - -Total 18,342,443 1,610,658 8.8% $4.29 -65,495 -SoutheastWarehouse 21,864,752 2,052,370 4.9% $3.09 216,506 -Manufacturing 25,141,858 2,160,686 4.7% $3.61 0 -Hightech Flex 2,960,161 820,068 5.7% $7.01 28,919 -Total 49,966,771 5,033,124 10.0% $4.60 245,425 -SouthwestWarehouse 8,001,673 864,428 3.4% $2.88 12,492 -Manufacturing 21,756,304 927,849 2.8% $3.40 29,709 -Hightech Flex 702,666 13,942 2.0% $5.04 - 35,023 Total 30,460,643 1,806,219 5.9% $3.89 42,201 35,023
Last Quarter vs. This Quarter
Last Year vs. This Year
Industrial Total Market Report
-1000000
-500000
0
500000
1000000
2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q32 014Q4 2015Q1
RBA Delivered Warehouse RBA Delivered Manufacturing RBA Delivered Hightech Flex
0.00%
2.00%
4.00%
6.00%
8.00%
2013Q1 2013Q2 2013Q3 2013Q4 2014Q12 014Q2 2014Q3 2014Q4 2015Q1
Vacancy Rate
Vacancy Rates Warehouse Vacancy Rates Manufacturing Vacancy Rates Hightech Flex
$0.00
$1.00
$2.00
$3.00
$4.00
2013Q1 2013Q2 2013Q32 013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1
Triple Net Rental Rates
Triple Net Rental Rates- Warehouse Triple Net Rental Rates- Manufacturing Triple Net Rental Rates- Hightech Flex
0
20000
40000
60000
80000
100000
2013Q1 2013Q2 2013Q3 2013Q4 2014Q1 2014Q2 2014Q3 2014Q4 2015Q1
Methodology | Definitions | Submarket Map
Rental RateThe annual costs of occupancy for a particularspace quoted on a per square foot basis.
Under ConstructionBuildings in a state of construction, up until they receive their certificate of occupancy. In order for CoStar to consider a building under construction, the site must have a concrete foundation in place.
Existing InventoryThe square footage of buildings that have received a certificate of occupancy and are able to be occupied by tenants. It does not include space in buildings that are either planned,under construction or under renovation.
Vacancy RateAll physically unoccupied lease space, either direct or sublease.
Flex Building A type of building designed to be versatile, which may be used in combination with office (corporate headquarters),research and development, quasi-retail sales, and including but not limited to industrial, warehouse, and distribution uses. A typical flex building will be one or two stories with at least half of the rentable area being used as office space, have ceiling heights of 16 feet or less, and have some type of drive-in door, even though the door may be glassed in or sealed off.
Industrial Building Calculated by dividing the price of a building (either sales price or asking sales price) by the Rentable Building Area (RBA).
Absorption (Net)The change in occupied space in a given time period.
Available Square FootageNet rentable area considered available for lease; excludes sublease space.
Average Asking Rental RateRental rate as quoted from each building’s owner/management company. For office space, a full service rate was requested; for retail, a triple net rate requested; for industrial, a NN basis.
Net Rental RateA rental rate that excludes certain expenses that a tenant could incur in occupying office space. Such expenses are expected to be paid directly by the tenant and may include janitorial costs, electricity, utilities, taxes, insurance and other related costs.
Price/SFCalculated by dividing the price of a building (either sales price or asking sales price) by the Rentable Building Area (RBA).
Multi-TenantBuildings that house more than one tenant at a given time. Usually, multi-tenant buildings were designed and built to accommodate many different floor plans and designs for different needs.
Price/SFCalculated by dividing the price of a building (either sales price or asking sales price) by the Rentable Building Area (RBA).
RBARentable Building Area -Mainly used for office and industrial
Southwest
Northeast
Southeast
Northwest
Lakeshore
All Industrial building types are included, including warehouse, flex / research development,distribution manufacturing, industrial showroom, and service buildings, in both single-tenant and multi-tenant buildings, including owner-occupied buildings.
Methodology
Doug Taatjes, CCIM, SIOR616 292 [email protected]
Chris Prins616 242 [email protected]
Kara Schroer 269 459 [email protected]
David Smies, CCIM, SIOR616 242 [email protected]
Jeremy Veenstra616 242 [email protected]
Chadwick Versluis, SIOR616 242 [email protected]
Stanley Wisinski III, SIOR, CCIM616 575 [email protected]
Marc Tourangeau269 207 [email protected]
Meet Our Team
Industrial SpecialistsJim Badaluco, SIOR616 450 [email protected]
Dane Davis269 459 [email protected]
Stuart Kingma, SIOR616 575 [email protected]
Kurt Kunst, SIOR, CCIM 616 242 [email protected]
In the spring of 2011, two successful and reputable companies, The Wisinski Group and NAI West Michigan merged. The merger represents collaboration, rich traditions, innovative technologies, unique cultures and diversity of skills and specialties which ultimately benefit our clients. We’re going back to our fundamentals, strengthening our core and becoming stronger in the services we provide our clients. Our focus is simple - building client relationships for life by offering market appropriate advice and then executing. Our success is a direct result of its unwavering commitment to providing the best possible service to each and every client. Our Brokers, with their 562 plus years of combined experience (20.1 years average), possess the knowledge and expertise to manage the most complex transactions in industrial, office, retail and multifamily specialities throughout West Michigan.
Through our affiliation with NAI Global, we can also assist you with your commercial real estate needs throughout the US & globally right here from West Michigan.
NAI Wisinski of West MichiganAt a Glance
Achieve More.Local Knowledge. Global Reach.
100 Grandville Ave SW Suite 100Grand Rapids, MI 49503616. 776. 0100 www.naiwwm.com
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nai-wisinski-of-west-michigan
Wisinski ofWest Michigan
Office • Industrial • Retail • Multi-Family