research · 2016. 10. 12. · 2 research 3b tech inc., expanding & adding new jobs 3b tech inc....

MARKET AT A GLANCE

Research

SOUTH BEND/MISHAWAKA3Q16 INDUSTRIAL MARKET

NEW CONSTRUCTION &

EXPANSION PROJECTS KEEP

THE MARKET STRONG

The South Bend/Mishawaka industrial market posted a 4.2% vacancy rate

for the third quarter of 2016, a decrease of 30 basis points from second

quarter 2016. Market activity has slowed but remained steady for the last

three months as approximately 101,280 square feet was absorbed,

rounding out the year-to-date total absorption of 312,850 square feet. The

average overall asking lease rate for the third quarter 2016 improved to

$3.42 per square foot.

The South Bend North industrial area, which encompasses a total inventory

of 12,032,117 square feet and demands the highest asking lease rate of

$5.19 (inclusive of flex space), had the lowest vacancy rate of 1.6% despite

negative absorption of 54,956 square feet at the end of the first quarter.

There remains 388,000 square feet under construction on South Bend’s

northwest side, keeping with the trend of growth.

As available industrial space has tightened, it is expected that speculative

construction will continue as in previous quarters. The current industrial

base is short on supply to meet today's requirements of industrial users

seeking modern facilities that offer 30-foot ceiling height, efficient loading

capabilities along with ample trailer parking. Businesses have been looking

for buildings they can occupy quickly, with few available. Such projects are

considered a sign of economic health because they show that developers

and their financiers are bullish about the local economy.

Economic ConditionsThe U.S. Bureau of Labor Statistics reported a 4.7% unemployment rate for

South Bend / Mishawaka in August 2016. According to the CES survey of

employers, there were 1,000 jobs lost in August for a total of 140,800 jobs.

Overall, the United States gained 255,000 jobs since last month and has a

4.9% unemployment rate.

..

www.cressyandeverett.com

34.9M 4.2% 101,280

SF$3.42

Total

Inventory

Vacancy

Rate

Net

Absorption

Average

Lease Rate

Under

Construction

Unemployment

Rate

4.7%606K

SF

3Q16

(Current Quarter)

2Q16

(Previous Quarter)

2Q15

(Previous Year)

12 Month

Forecast

Total Inventory

(Local Profile)34.9M SF 34.9M SF 33.9M SF

Vacancy Rate 4.2% 4.5% 5.9%

Quarterly Net Absorption 101,280 107,995 108,607

Average Lease Rate $3.42 $3.29 $2.97

Under Construction 606,000 578,000 0

Completed Construction 0 0 0

MARKET PERFORMANCE

3%

5%

7%

9%

11%

$1

$2

$3

$4

$5

3Q10 3Q11 3Q12 3Q13 3Q14 3Q15 3Q16

Average Lease Rate (Price/SF) Vacancy (%)

AVERAGE LEASE RATE & VACANCY

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Research

3B Tech Inc., Expanding & Adding New Jobs

3B Tech Inc. plans to expand into the former 80,000 square-foot

Invacare warehouse located at 7250 Vorden Parkway in South Bend.

The company is a South Bend-based e-commerce business specializing

in parts and repair, and plans to hire 100 new employees over the next

five years. 3B Tech recently received approval of a tax abatements for its

$840,000 expansion.

Metal Companies Expanding In South Bend

Two South Bend-based metal businesses are seeking approval of tax

abatements for their respective expansion plans. Imagineering

Enterprises is looking to invest $3.5 million to expand its facility near the

South Bend International Airport. The project would create 25 full-time

jobs. Meanwhile, Industrial Metal Fab plans to invest $520,000 to

expand its facility and purchase new equipment. That expansion is

expected to bring 10 full-time jobs.

Metal Fabricator Gets A New Name & Direction

General Sheet Metal Works is now General Stamping & Metalworks.

Founded in South Bend in 1922, the company said its new name better

reflects the services it provides to original equipment manufacturers.

Along with the name change, the company plans to move into its new

$22.7 million, 190,000 square-foot headquarters and manufacturing

facility located on Old Cleveland Road in November 2016. The

company’s current 150,000 square-foot complex on S. Main Street will

be used to expand its warehousing and order fulfillment operations.

Expansion of Notre Dame Incubator To Meet Demand

Pent-up demand among University of Notre Dame students, alumni and

other entrepreneurs for space to launch high-tech startups has lingered

for several years. That demand will soon be met at Innovation Park at

Notre Dame, where a $13 million, 40,000 square-foot addition to the

business incubator will be built. When completed, the new wing will make

room for 25 to 30 tenants.

Study Recommends Mishawaka Sports Facility

A study commissioned by Visit South Bend Mishawaka recommends

construction of a $33 million indoor sports facility in Mishawaka.

Conducted by Chicago-based Hunden Strategic Partners, the study

recommends a nearly 118,000 square-foot facility that could seat

approximately 2,000 spectators. Additional findings noted that the sports

facility could generate more than $530 million in economic impact over

20 years.

Hoosier Snack Maker Plans New $15M Plant

A Bluffton-based snack food maker is planning to launch a second

Indiana operation and add up to 65 jobs over the next four years.

Pretzels Inc. says it will invest $15 million into a new Plymouth plant.

The Indiana operation will replace a facility in Pennsylvania, making

peanut butter and bulk pretzel products for private label clients, store

brands and its own Harvest Road line. The new 45,000 square-foot plant

is expected to be operational in 2017. The company has been offered up

to $350,000 in conditional tax credits from the Indiana Economic

Development Corporation.

OUR MARKET IN MOTION



7250 Vorden Parkway | South Bend, Indiana

Pretzels Inc. | Plymouth, Indiana

Innovation Park | Notre Dame, Indiana

General Stamping & Metalworks | South Bend, Indiana

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NOTABLE LEASE TRANSACTIONS

Tenant Building Submarket Type Square Feet

Communications Test Design, Inc. 1827 North Bendix Drive Airport Industrial Direct 45,000

CHEP Container & Pooling Solutions, Inc. 5102 Dylan Drive South Bend North Direct 33,826

RR Donnelley & Sons 3235 Rosetta Place Drive South Bend North Direct 7,500

NOTABLE SALE TRANSACTIONS

Building Submarket Sale Price Price/SF Square Feet

1153 Northside Boulevard South Bend South $250,000 $35.41 7,060

412 South Lafayette Boulevard South Bend South $125,000 $9.34 13,383

2610 W 6th Street Mishawaka South $80,000 $14.22 5,622

SUBMARKET STATISTICS

Submarket

Area

Total

Inventory

(SF)

Under

Construction

(SF)

Total

Vacancy

Rate (%)

Quarter

Absorption

(SF)

YTD

Absorption

(SF)

General

Industrial Lease

Rates (Price/SF)

Warehouse/

Distribution

Lease Rates

(Price/SF)

R&D Flex

Lease Rates

(Price/SF)

Total Lease

Rates

(Price/SF)

Airport

Industrial

3,762,188 188,000 6.3 54,180 111,432 $3.00 $3.59 $4.53 $3.39

South Bend

North**

12,032,117 388,000 1.6 29,157 -25,799 $3.75 $4.69 $6.52 $5.19

South Bend

South*

10,731,429 0 7.7 -23,981 -24,269 $2.66 $2.33 $4.76 $2.92

Mishawaka

North***

3,898,121 30,000 4.0 -400 13,200 $4.57 $3.50 $4.50 $4.40

Mishawaka

South

4,465,947 0 4.0 43,234 248,366 $3.14 $4.50 $3.00 $3.24

TOTALS 34,889,802 606,000 4.2% 101,280 312,850 $2.95 $3.02 $5.01 $3.42

*New Carlisle submarket has been added to South Bend North submarket.**Walkerton submarket has been added to South Bend South submarket

***Granger submarket has been added to Mishawaka North 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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Research


“Expansion is still the mantra for industrial users focused on South Bend/Mishawaka. With asking rates

continuing to rise and vacancy rates continuing to decline the market couldn’t be any tighter. Like many

other markets this size speculative construction is not matching the present demand for space. Most of

the new projects delivered are matched with users for the new inventory. Much of the need is still

focused on modern distribution space although manufacturers are active with more and more influence

from Elkhart users due to lack of inventory in their market.”

Christian Davey, Senior Broker

South Bend/Mishawaka Office


Market Perspective

TOTAL

INVENTORY

UNITED STATES STATE LOCAL

TOTALINVENTORY

(SF) 14.3B 737.9M 34.9M

VACANCYRATE

5.8% 5.6% 4.2%

NETABSORPTION(% OF INVENTORY) 0.53% -0.1% 0.29%

AVERAGELEASE RATE

(PSF) $5.96 $3.31 $3.42

UNDERCONSTRUCTION

(SF) 191.8M 6.7M 593,000

UNEMPLOYMENTRATE

4.9% 4.5% 4.7%

HOW DO WE COMPARE?

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Research



OUR FEATURED LISTINGS

400 S. Byrkit Avenue | Mishawaka, Indiana

Size: 332,356 SF

Starting Bid: $400,000 ($10,000 Participation Deposit)Going to online auction on October 31, 2016, this 332,356 square-foot

industrial campus on 21.71 acres is located in the Mishawaka South

Submarket. The property offers many amenities including, 25 manually

and electrically operated steel overhead doors, 14 docks, 12’ to 43’ ceiling

heights, heavy power, heating and cooling throughout, fire and safety

equipment and municipal utilities. Built in the 1920’s through the 2000’s,

the property is zoned I-2 Heavy Industrial. This is an opportunity to

acquire one of the larger industrial assets in northwest Indiana!

The property is located just minutes from the newly expanded and

improved Capital Avenue extension which connects to the I-80/90 Toll

Road and the US 20/31 ByPass. Additionally, the property offers an

excellent regional positioning to major metropolitan cities including

Chicago, Grand Rapids, Indianapolis and Detroit. Register for free at

10X.Com/MishawakaIndustrial.

4004 Technology Drive | South Bend, Indiana

Size: 118,748 Available: 3,000 SF to 21,000 SF

Lease Rate: $4.50 to $9.50 PSF FSGPreviously used by Woodwinds and Brasswinds/Guitar Center, this Class

A office/retail/call center has potential distribution space. Available for

lease is 21,000 square-feet of flexible space with abundant windows for

natural lighting, 10’ to 18’ ceilings, building security and 100% sprinkled.

The building enjoys all municipal utilities including data wiring to the

MetroNet.

The building, which has been an iconic fixture along the Toll Road

since 1998, is extremely well-maintained with distinct landscaping and

water features. Located in the Blackthorn Development Area, the

property has excellent access to the I-80/90 Toll Road, the US 20/31

ByPass and the South Bend International Airport.

Online Auction: October 31-November 3

https://www.ten-x.com/commercial/details/400-south-byrkit-avenue-mishawaka-in-46544-193050434-b_192

https://www.ten-x.com/commercial/details/400-south-byrkit-avenue-mishawaka-in-46544-193050434-b_192

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.

©2016. Newmark Grubb Cressy & Everett has implemented a proprietary database and our tracking methodology has been revised. With this expansion and refinement in

our data, there may be adjustments in historical statistics including availability, asking rents, absorption and effective rents.

Research

Christian Davey, CCIM/SIORSenior Broker, Principal

574.271.4060 (o)

574.485.1534 (d)

[email protected]

Years of Experience

20

Areas of Specialization

Industrial

Investment

Office

Retail

Logistics

Casey KaniewskiSenior Broker

574.271.4060 (o)

574.485.1579 (d)

[email protected]

Years of Experience

8

Areas of Specialization

Market Analysis

Economic Analysis

Contract Negotiation

Lease Review

Meet Our Team



Corporate Headquarters

4100 Edison Lakes Parkway

Suite 350

Mishawaka, IN 46545

574.271.4060

NEW!Fort Wayne Office

200 E. Main Street

Suite 540

Fort Wayne, IN 46802

260.399.4057

Grand Rapids Office

32 Market Street

Suite 302

Grand Rapids, MI 49503

616.456.6400


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research · 2016. 10. 12. · 2 research 3b tech inc., expanding & adding new jobs 3b tech inc....

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