jll columbus industrial outlook: q2 2016

Industrial Outlook

Columbus | Q2 2016

Quality Class A bulk product current availability (s.f.)

Source: JLL Research

Industrial activity in expanding areas, since 2013 (s.f.)


Accessibility to major Atlantic and Gulf coast ports

Source: JLL Research, US Army Corps of Engineers

Quality Class A bulk product remains available

Southern Columbus continues to experience rapid bulk warehouse activity and

there are still several quality blocks of space available between 250,000 to

500,000 square feet. In 2016, 82.1 percent of all quality bulk leasing activity has

taken place either below 250,000 square feet or above 500,000 square feet,

leaving roughly 2.2 million square feet available in the mid-range sector. This

recent trend has pushed landlords to be more aggressive when courting tenants,

but they remain optimistic that the vacancies will level out through the course of

2016. Across all ranges, the majority of the Class A bulk product lies in the

southeast submarket, although this quality product type is available in several

pockets around Columbus.

Industrial footprint continues to expand along highway access points

The southern submarkets have long found success due to their proximity to the

Rickenbacker Intermodal terminal and large parcels of available land. Now the

industrial activity in Columbus is expanding geographically. Over the last

eighteen months, leasing and development activity has ramped up in

neighboring areas of the Columbus region such as West Jefferson and Etna.

Other outlying markets within the region, Johnstown and Hebron for instance,

continue to see more activity. One such tenant moving into the outlying area of

Columbus is Bleckmann, a European logistics firm, who signed a 260,000-

square-foot lease at the Atrium building in Johnstown. Since 2013, Etna and

West Jefferson have delivered 3.1 million square feet of industrial space.

Panama Canal expansion implications for Columbus

As Columbus continues to be sought after as a logistics hub, the expansion of

the Panama Canal will bring even more opportunities for logistics and e-

commerce services to the area. The logistics outlay developing in Columbus is

positioned to capitalize on the shift of goods to the Atlantic and Gulf coast ports,

where the Capitol City is less than a day’s drive from most ports along the

Atlantic. Columbus is within a day’s drive from nearly half of the US population,

ultimately furthering the current industrial activity in areas like Groveport, Etna,

and Obetz. Rickenbacker Inland Port’s rail access is also within two days of the

six major Gulf and east coast ports standing to benefit from the canal expansion.

Class A bulk space available for pipeline of demand

Industrial Insight

Columbus | Q2 2016

$3.73Average total asking rent

3,711,064Total under construction (s.f.)

578,053Quarterly completions (s.f.)

2,043,251YTD net absorption (s.f.)

6.4%Total vacancy

2,233,000Planned construction (s.f.)

408,241Quarterly net absorption (s.f.)

244,262,041Market Size(s.f.)

JLL | Columbus | Industrial Outlook | Q2 2016

02468

1012

100,000 - 249,999s.f.

250,000 - 499,999s.f.

> 500,000 s.f.#

of b

lock

s

Licking County North Southwest Southeast

0 500,000 1,000,000 1,500,000 2,000,000

Johnstown

Hebron

West Jefferson

Etna

Delivered s.f.

Leased s.f.

93%

Of all foreign imported cargo

volume from the largest Atlantic

and Gulf coast ports, 93 percent of

total tonnage is less than 2 days

drive from Columbus.

Projects under construction by submarket (s.f.) Average total asking rent ($ p.s.f.)


Notable sales in 2016 Notable leases signed in the second quarter


Large block availabilities Net absorption & overall vacancy rate


Industrial property clock New construction deliveries

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 YTD 2016

1,183,000

2,096,000

5,660,000

2,818,000

1,481,000

0

2,000,000

4,000,000

6,000,000

2012 2013 2014 2015 YTD 2016

Property Submarket Tenant Leased s.f.

Atrium Madison County Bleckmann 262,994

2303 John Glenn Avenue Southeast Genco 173,378

3950 Venture Court West Panacea 168,850

Creekside III Southeast XPO Logistics 151,200

Park 70 Etna Building 4 Licking County Coty LCD 144,236

7600 Industrial Parkway Union County N/A 75,000

0.0%

4.0%

8.0%

12.0%

-10,000,000

0

10,000,000

2011 2012 2013 2014 2015 YTD 2016

s.f.

Net absorption Total vacancyExisting Under Construction

Size range Class A Class B Class C Class A Class B

100-249 k.s.f. 7 9 6 0 0

250-499 k.s.f. 8 1 0 2 0

500-749 k.s.f. 2 2 1 1 0

Property Buyer Bldg s.f. $ p.s.f

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

SouthPark IV Lincoln Property 290,606 $41.11

2660 Fisher Road Diamond Properties 204,806 $21.71

Land

lord

leve

rage

Tenant leverage

Peaking

market

Falling

market

Bottoming

marketRising

market




Columbus Q2 ‘15

Columbus Q2 ‘14


2,116,064

855,000

600,000

140,000

0

2,000,000

Southeast Licking County East West

Columbus Q2 ‘16

Industrial Statistics

Columbus | Q2 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 189,048,637 304,519 1,836,198 1.0% 6.7% 8.8% $3.73 478,053 903,220 3,011,064

Manufacturing 32,753,548 103,722 207,053 0.6% 4.4% 6.8% $3.72 0 0 700,000

Totals 221,802,185 408,241 2,043,251 0.9% 6.4% 8.5% $3.73 478,053 903,220 3,711,064

Flex 22,459,856 68,363 217,256 1.0% 5.2% 8.0% $5.90 100,000 0 0

CBD

Warehouse & Distribution 1,885,908 0 0 0.0% 0.0% 1.1% $4.25 0 0 0

Manufacturing 597,948 0 0 0.0% 0.0% 18.8% $3.95 0 0 0

Totals 2,483,856 0 0 0.0% 0.0% 4.4% $4.17 0 0 0

Flex 396,753 3,355 3,355 0.8% 50.4% 50.4% $5.00 0 0 0

North

Warehouse & Distribution 12,601,007 99,243 55,880 0.4% 4.7% 9.0% $5.07 0 0 0

Manufacturing 1,075,041 0 0 0.0% 23.8% 26.5% $3.50 0 0 0

Totals 13,676,048 99,243 55,880 0.4% 5.3% 6.8% $4.84 0 0 0

Flex 4,851,931 -52,022 -65,836 -1.4% 5.2% 7.2% $7.05 0 0 0

East

Warehouse & Distribution 18,816,700 24,493 224,956 1.2% 0.5% 2.2% $4.54 0 0 855,000

Manufacturing 2,966,879 17,000 17,000 0.6% 8.4% 15.1% $4.11 0 0 0

Totals 21,783,579 41,493 241,956 1.1% 2.3% 6.6% $4.43 0 0 0

Flex 4,049,092 55,897 44,261 1.1% 4.0% 5.9% $6.43 100,000 100,000 0

Southeast

Warehouse & Distribution 69,395,407 318,645 1,446,502 2.1% 10.4% 11.5% $3.52 478,053 1,381,273 2,016,064

Manufacturing 5,843,348 56,000 86,000 1.5% 5.6% 5.6% $3.00 0 0 100,000

Totals 75,238,755 374,645 1,532,502 2.0% 9.1% 13.2% $3.39 478,053 1,381,273 2,116,064

Flex 2,744,989 8,600 38,918 1.4% 2.0% 4.8% $4.94 0 0 0

Southwest

Warehouse & Distribution 17,957,226 0 -141,060 -0.8% 7.9% 10.2% $3.76 0 0 0

Manufacturing 901,369 51,610 86,941 9.6% 0.5% 6.7% $3.15 0 0 0

Totals 18,858,595 51,610 -54,119 -0.3% 3.8% 10.1% $3.92 0 0 0

Flex 1,997,063 15,588 94,782 4.7% 3.7% 15.5% $5.57 0 0 0

West

Warehouse & Distribution 30,820,234 -87,300 21,579 0.1% 5.2% 8.2% $3.12 0 0 140,000

Manufacturing 2,154,836 -30,740 -42,740 -2.0% 2.6% 2.6% $3.54 0 0 600,000

Totals 32,975,070 -118,040 -21,161 -0.1% 6.3% 9.4% $3.50 0 0 740,000

Flex 5,656,351 19,445 78,576 1.4% 4.5% 5.7% $5.53 0 0 0

Outlying

Warehouse & Distribution 37,572,155 -50,562 228,341 0.6% 4.9% 7.1% $3.71 0 0 0

Manufacturing 19,214,127 9,852 59,852 0.3% 4.1% 6.4% $3.93 0 0 0

Totals 56,786,282 -40,710 288,193 0.5% 4.5% 7.6% $3.79 0 0 0

Flex 2,763,677 17,500 23,200 0.8% 6.6% 8.8% $5.22 0 0 0

Industrial Development Report

Columbus | Q2 2016


This report analyzes all industrial developments under construction & new deliveries > 30,000 s.f.

Total leased at delivery (%) 49.7%

Total speculative at delivery (s.f.) 1,060,273

Total BTS at delivery (s.f.) 421,000

Total Owner-User at delivery (s.f.) -

Total # of properties delivered 4

Asking rental rate (low - high, NNN-based) $3.50 - $3.75

Top projects delivered to date

Building RBA (s.f.) Delivery dateLeased at delivery

(%)

Duke Building 482 482,220 Q1 2016 53%

Exxcel CenterPoint Business Park 478,053 Q2 2016 0%

Duke-BASF 421,000 Q1 2016 100%

Airside Two 100,000 Q2 2016 60%

Total pre-leased (%) 70.2%

Total speculative under construction (s.f.) 1,156,064

Total BTS under construction (s.f.) 1,855,000

Total Owner-user under construction (s.f.) 700,000

Total # of properties UC 7

Asking rental rate (low - high, NNN-based) $3.50 - $4.25

Top 5 projects currently under construction

Building RBA (s.f.) Delivery date Pre-leased (%)

Amazon Fulfillment Center 1,000,000 Q3 2016 100%

Amazon Distribution Center 855,000 Q3 2016 100%

Rogue Fitness 600,000 Q3 2016 100%

Rickenbacker 567 567,000 Q2 2017 0%

Groveport II 449,064 Q3 2016 0%Speculative

Speculative

Owner Construction type

Owner-user

Northpoint

Vantrust

1047 Cleveland LLC

Prologis

Duke Realty

BTS

BTS

Southeast

Southeast

East

Licking County

Southeast

Historical deliveries (s.f.)

Construction typeOwnerSubmarket

East

Southeast

Southeast

Southeast

Daimler

Duke Realty

Exxcel Project Management

Duke Realty

Speculative

New deliveries

Completions in-depth

1,481,273Total delivered YTD (s.f.)

Speculative

BTS

Speculative

Submarket

Under construction

3,711,064Under construction (s.f.)

Under construction in-depth

Upcoming deliveries by year (s.f., excludes YTD completions)

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

2011 2012 2013 2014 2015 YTD 2016

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

Under construction Under construction

2016 2017

BTS Owner-user Speculative

Industrial Sales Activity

Columbus | Q2 2016


This report analyzes all industrial sales > 50,000 s.f.

$121,068,768

17

$37

6.3%

88.4%

10.1%

1.4%

5-6.5% 0 1 $1,750,000

6.5-7.5% N/A 16 $119,318,768

Top 10 sales transactions past two quarters

Size (s.f.) $ p.s.f. Sale date

354,000 $54 Mar-16

393,696 $31 Feb-16

393,232 $31 Feb-16

290,606 $41 Feb-16

391,000 $22 Feb-16

184,152 $43 Apr-16

143,335 $52 Feb-16

132,800 $43 Apr-16

116,590 $43 Apr-16

162,400 $30 May-16

Diamond Properties

Lincoln Property Company

Exeter Property Group

Exeter Property Group

Manufacturing sales volume as % of

total YTD

Invesco Advisors

Invesco Advisors

Invesco Advisors

Garrison Investment Group

$12,350,000

$12,350,000

$12,040,000

$8,488,223

6600 Donn Eisele Street Dalfen Abercrombie & Fitch $4,900,000

2787-2805 Charter Street Dalfen Hackman Capital $5,759,536

3940 Gantz Road Dalfen Hackman Capital $5,056,508

Hackman Capital $7,986,672

2235 Southwest Boulevard Lincoln Property Company Invesco Advisors $7,509,691

2829-2843 Charter Street Dalfen

3655 Brookham Drive

2652 Fisher Road

3357 Southpark Place

3423 Southpark Place

5920 Green Pointe Drive South Clarion Partners Waxman Industries $18,961,297

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 $

$107,033,768

$12,285,000$1,750,000

3,093,881 s.f.

287,554 s.f.248,826 s.f.

0 s.f.

500,000 s.f.

1,000,000 s.f.

1,500,000 s.f.

2,000,000 s.f.

2,500,000 s.f.

3,000,000 s.f.

3,500,000 s.f.

$0

$20,000,000

$40,000,000

$60,000,000

$80,000,000

$100,000,000

$120,000,000

Warehouse / Distribution Flex/R&D Manufacturing

Sum of Price ($) Sum of RBA (SF)

22%

21%

21%

16%

10%

7%3%

Exeter Property Group Dalfen

Diamond Properties Lincoln Property Company

Clarion Partners Olymbec Corporate Group

Center Point Development

38%

21%

17%

10%

7%

4% 3%

Invesco Advisors Garrison Investment Group

Hackman Capital Waxman Industries

Ball Corporation Abercrombie & Fitch

Sheaf & Jentgen Companies

$57,660,400

$37,797,071

$23,861,297

$1,750,000

Southwest

West

Southeast

East

Industrial Employment Update

Columbus | Q2 2016


4.7%U.S. unemployment

1.6%U.S. 12-month job growth

3.9%Columbus unemployment

1.9%Columbus 12-month job growth

5.2%Ohio unemployment

1.3%Ohio 12-month job growth

Industry employment stratification: Columbus

Trade, Transportation & Utilities,

194,100 , 18%

Professional & Business Services,

177,200 , 17%

Government, 171,000 , 16%

Educational & Health Services, 155,900 , 15%

Leisure & Hospitality, 104,700 , 10%

Financial Activities, 80,300 , 8%

Manufacturing, 72,700 , 7%

Other Services, 43,100 , 4%

Mining, Logging & Construction, 37,700 , 3%

Information, 16,700 , 2%

Employment vs. unemployment rate: Columbus

0%

3%

6%

9%

12%

780,000

840,000

900,000

960,000

1,020,000

1,080,000

2006 2008 2010 2012 2014 2016

Nonfarm employment

Unemployment

Job growth (12-month change): United States vs. Columbus

Job growth/loss by sector (12-month change): Columbus

Industrial employment trends (12-month change, 000s): Columbus

-4.0%

-2.0%

0.0%

2.0%

4.0%

2010 2011 2012 2013 2014 2015 2016

Columbus United States

-400

-200

1,300

1,700

1,800

2,000

2,500

3,300

3,400

4,000

Information

Trade, Transportation & Utilities

Manufacturing

Financial Activities

Professional & Business Services

Government

Other Services

Mining, Logging & Construction

Leisure & Hospitality

Educational & Health Services

-25.0

-15.0

-5.0

5.0

15.0

2010 2011 2012 2013 2014 2015 2016

Trade,Transportation & UtilitiesManufacturingOther ServicesMining, Logging & Construction

Industrial Submarket Map

Notable construction projects

Amazon Distribution Center

Tenant: Amazon

Square Feet: 855,000

Landlord: Prologis

Amazon Fulfillment Center

Tenant: Logistics User

Square Feet: 1,000,000

Landlord: Duke Realty

Groveport Park II

Tenant: N/A


Landlord: Northpoint


Estimated completion:

Q3 2016


Q3 2016


Q3 2016

Rickenbacker 567

Tenant: N/A


Landlord: Vantrust


Q2 2017

Rogue Fitness

Tenant: Rogue Fitness


Landlord: Wagenbrenner


Q3 2016

For more information, please contact:

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value by owning, occupying and investing in real estate. A Fortune 500 company with annual fee revenue of $4.7 billion and gross revenue of $5.4

billion, JLL has more than 230 corporate offices, operates in 80 countries and has a global workforce of approximately 58,000. On behalf of its clients,

the firm provides management and real estate outsourcing services for a property portfolio of 3.4 billion square feet, or 316 million square meters, and

completed $118 billion in sales, acquisitions and finance transactions in 2014. Its investment management business, LaSalle Investment Management,

has $56.0 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For

further information, visit www.jll.com.

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JLL’s research team delivers intelligence, analysis and insight through market-leading reports and services that illuminate today’s commercial real

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COPYRIGHT © JONES LANG LASALLE IP, INC. 2016

Andrew Batson

Manager, Great Lakes Research

+1 216 937 4374

[email protected]

Ross Bratcher

Research Analyst

+ 1 513 719 3706

[email protected]

Peter McStravick

Research Analyst

+1 614 460 4417

[email protected]

http://www.jll.com/

jll columbus industrial outlook: q2 2016

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