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SOUTH BEND/MISHAWAKA - Newmark Grubb Cressy & Everett · 2017. 7. 24. · served by municipal...
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www.cressyandeverett.com SPACE CONSTRICTIONS NOT STOPPING GROWTH The industrial market in South Bend continues growing due to a demand for quality industrial space as a result of the shortage of inventory in the Elkhart market. Spec buildings are being leased before they are built, and the limited availability of inventory in the Elkhart region has caused large manufacturers to expand their scope of search beyond city limits, now searching in the South Bend/Mishawaka area. The proximity to the main manufacturing hub in the region is convenient to catch the overflow of potential buyers looking to expand within this area, thus keeping businesses local. Furthermore, many manufacturing companies in the area are in the midst of expanding their presence, locally and globally. From expanding their current facilities to making global acquisitions, the market is growing strong and steady. As the laws of supply and demand run their course, the limited industrial inventory has caused upward pressure on the average lease rates for subject market properties in the South Bend/Mishawaka area. Market tenants are facing higher rates as inventory continues to be absorbed at a rapid rate. The momentum of market growth may not decelerate any time soon. With the rise of e- commerce, online vendors must strategically place their distribution centers in the middle of the country, which proves to be a solid boost for the future Midwest industrial market. The economic indicators show that the region will likely continue to draw more consumers of large industrial space through the end of 2017. 3 5 . 7 M S F 4 . 2 % - 1 7 7 , 8 1 2 S F $ 3 . 3 1 2 . 8 % 4 4 3 K S F Total Inventory Vacancy Rate Quarterly Absorption Average Lease Rate Under Construction Unemployment Rate 2 Q 1 7 2 Q 1 6 2 Q 1 5 3 Q 1 7 F o r e c a s t T o t a l I n v e n t o r y ( L o c a l P r o f i l e ) 35.7M SF 34.9M SF 33.9M SF V a c a n c y R a t e 4.2% 4.5% 5.9% Q u a r t e r l y A b s o r p t i o n -177,812 107,995 108,607 A v e r a g e L e a s e R a t e $3.31 $3.29 $2.97 U n d e r C o n s t r u c t i o n 443,000 578,000 0 C o m p l e t e d C o n s t r u c t i o n 0 0 0 M A R K E T P E R F O R M A N C E 3% 5% 7% 9% 11% $1 $2 $3 $4 $5 2Q10 2Q11 2Q12 2Q13 2Q14 2Q15 2Q16 2Q17 Vacancy (%) Average Lease Rate (Price/SF) A V E R A G E L E A S E R A T E & V A C A N C Y MARKET AT A GLANCE SOUTH BEND/MISHAWAKA 2Q17 INDUSTRIAL MARKET
Transcript of SOUTH BEND/MISHAWAKA - Newmark Grubb Cressy & Everett · 2017. 7. 24. · served by municipal...
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SPACE CONSTRICTIONS NOT STOPPING GROWTHThe industrial market in South Bend continues growing due to a demand for quality industrialspace as a result of the shortage of inventory in the Elkhart market. Spec buildings are beingleased before they are built, and the limited availability of inventory in the Elkhart region hascaused large manufacturers to expand their scope of search beyond city limits, now searchingin the South Bend/Mishawaka area. The proximity to the main manufacturing hub in the regionis convenient to catch the overflow of potential buyers looking to expand within this area, thuskeeping businesses local.
Furthermore, many manufacturing companies in the area are in the midst of expanding theirpresence, locally and globally. From expanding their current facilities to making globalacquisitions, the market is growing strong and steady.
As the laws of supply and demand run their course, the limited industrial inventory has causedupward pressure on the average lease rates for subject market properties in the SouthBend/Mishawaka area. Market tenants are facing higher rates as inventory continues to beabsorbed at a rapid rate.
The momentum of market growth may not decelerate any time soon. With the rise of e-commerce, online vendors must strategically place their distribution centers in the middle ofthe country, which proves to be a solid boost for the future Midwest industrial market. Theeconomic indicators show that the region will likely continue to draw more consumers of largeindustrial space through the end of 2017.
35.7MSF
4.2%
-177,812SF
$3.31
2.8%443KSF
TotalInventory
VacancyRate
QuarterlyAbsorption
AverageLease Rate
UnderConstruction
UnemploymentRate
2Q17 2Q16 2Q15 3Q17 Forecast
Total Inventory (Local Profile) 35.7M SF 34.9M SF 33.9M SF
Vacancy Rate 4.2% 4.5% 5.9%
Quarterly Absorption -177,812 107,995 108,607
Average Lease Rate $3.31 $3.29 $2.97
Under Construction 443,000 578,000 0
Completed Construction 0 0 0
MARKET PERFORMANCE
3%
5%
7%
9%
11%
$1
$2
$3
$4
$5
2Q10 2Q11 2Q12 2Q13 2Q14 2Q15 2Q16 2Q17
Vacancy (%) Average Lease Rate (Price/SF)
AVERAGE LEASE RATE & VACANCYMARKET AT A GLANCE
SOUTH BEND/MISHAWAKA2Q17 INDUSTRIAL MARKET
SBT Photo/Santiago Flores
Royal Adhesives Acquires Aircraft Sealant Business
The Georgia-based Ball Ground aircraft sealant repackagingbusiness will now operate under the Royal Adhesives &Sealants brand. Royal Chief Executive Officer, Ted Clark, saysthat the acquisition will bring the company one step closer tobecoming a global aircraft sealant business.
OUR MARKET IN MOTION
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Great Lakes Capital Announces 315,000 SF Distribution Center
Communications Test Design, Inc. (CTDI) will be located inAmeriPlex at Interstate 80/90. Construction on the newfacility is expected to be complete by early 2018. CTDI is aglobal engineering, repair and logistics companyheadquartered in Pennsylvania. They have been a SouthBend employer for nearly 30 years, and company VicePresident, Paul Cardell, believes the new facility will allowthem to continue growing.
AM General to Sell Mishawaka Plant
SF Motors has agreed to purchase AM General’s assemblyplant in Mishawaka, and the transaction is expected to becomplete by fourth quarter 2017. Company officials saythey intend to retain the entire current work force, as wellas invest approximately $30 million into facility upgrades.SF Motors is a Chinese-owned maker of electric vehiclesbased in Silicon Valley.
Pulliam Enterprises to Expand in Mishawaka
Trailer hitch designer and manufacturer PulliamEnterprises plans to invest $2.5 million into their currentfacility—adding approximately 20,000 square feet formanufacturing and 14,000 square feet for research anddevelopment. The project is expected to be completed bythis fall and is said to create five jobs.
Courtesy of Pulliam Enterprises, Inc
SOUTH BEND/MISHAWAKA2Q17 INDUSTRIAL MARKET
NOTABLE LEASE TRANSACTIONS
Address Submarket Size (SF)
Total Consideratio
n ($)
3725 N. Foundation Court Airport Industrial Area 4,000 $86,976
4325 Mayflower Road South Bend North 1,800 $26,730
6879 Enterprise Drive South Bend North 16,000 $293,600
NOTABLE SALE TRANSACTIONS
Address Submarket Size (SF)
Total Consideration
($)
12655 Sandy Drive Granger 12,000 $455,000
202 & 204 Beech Road Mishawaka South 6,400 $155,000
503 East Colfax Avenue & 122 North Niles Avenue South Bend North 5,108 $360,000
SUBMARKET STATISTICS
SubmarketArea
Total Inventory
(SF)
Under Construction
(SF)
TotalVacancyRate (%)
Quarter Absorption
(SF)
YTD Absorption
(SF)
General Industrial
Lease Rates (Price/SF)
Warehouse/DistributionLease Rates (Price/SF)
R&D Flex Lease Rates
(Price/SF)
TotalLease Rates
(Price/SF)
Airport Industrial
3,952,518 0 6.6 -92,300 -92,300 $3.24 $4.02 $5.17 $3.77
Granger 1,032,859 0 0.5 -5,000 -5,000 $5.75 $0.00 $0.00 $5.75
Mishawaka North
2,939,402 30,000 0.8 5,000 94,555 $3.95 $3.50 $5.22 $4.24
Mishawaka South
4,596,176 0 3.8 2,850 2,850 $3.13 $4.50 $0.00 $3.17
New Carlisle Area
1,858,290 0 0.0 0 0 $0.00 $0.00 $0.00 $0.00
South Bend North
10,577,272 401,000 0.8 38,179 133,100 $4.25 $3.63 $5.94 $3.85
South Bend South
9,686,902 12,000 9.7 -126,541 -273,493 $2.67 $2.33 $4.35 $2.79
Walkerton 1,025,951 0 0.0 0 0 $0.00 $0.00 $0.00 $0.00
TOTALS 35,669,370 443,000 4.2% -177,812 -140,288 $2.99 $3.21 $4.85 $3.31
SOUTH BEND/MISHAWAKA2Q17 INDUSTRIAL MARKET
All information contained in this publication is derived from sources that are deemed to be reliable. However, Newmark Grubb Cressy Commercial has not verified any such information, and the same constitutes the statements and representations only of the source thereof, and not of Newmark Grubb Cressy Commercial. Any recipient of thispublication 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. Anyrecipient of this publication may not, without the prior written approval of Newmark Grubb Cressy Commercial, distribute, disseminate, publish, transmit, copy, broadcast, upload, download, or in any other way reproduce this publication or any of the information it contains.
©2017. Newmark Grubb Cressy Commercial has implemented a proprietary database and our tracking methodologyhas been revised. With this expansion and refinement in our data, there may be adjustments in historical statisticsincluding availability, asking rents, absorption and effective rents.
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SOUTH BEND/MISHAWAKA2Q17 INDUSTRIAL MARKET
“A slight uptick in inventory is masking a healthy demand for space in St. Joseph County with few options
available. There continues to be a lack of quality distribution and advanced manufacturing space available
in the market. With additional large consumers of industrial space continuing in from Elkhart County, the
horizon for landlords and sellers appears bright for the quarter ahead through the end of the year.”
Christian DaveySenior Broker, PrincipalSouth Bend/Mishawaka Office
LOCAL STATE UNITED STATES
TOTALINVENTORY
(SF)35.7M 691.5M 15B
VACANCYRATE 4.2% 6.5% 5.4%
QUARTERLYABSORPTION
(SF)-177,812 7.7M 51.7M
AVERAGELEASE RATE
(PSF)$3.31 $3.79 $6.12
UNDERCONSTRUCTION
(SF)443,000 4.9M 214.7M
UNEMPLOYMENTRATE 2.8% 2.8% 4.1%
HOW DO WE COMPARE?
“A slight uptick in inventory is masking healthy demand
MARKET PERSPECTIVE
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SOUTH BEND/MISHAWAKA2Q17 INDUSTRIAL MARKET
OUR FEATURED LISTINGS4221 Technology Drive | South Bend, IndianaSingle-Tenant20,301 SF on 2.98 Acres $575,000
20,301 square foot industrial building includes 4,530 square feet of clean office space and 15,771 square feetof warehouse. There is an additional 5,236 square feet of mezzanine space. The subject property sits on 3.2acres with ample space for additional development or expansion of the existing structure. The building isserved by municipal utilities, 480 3 phase power with 4 docks and 2 grade level doors and ample on siteparking for visitors and employees.
12911 Industrial Drive | Granger, Indiana32,800 SF/ 5,000 SF Available Lease Rate: $5.75 PSF NNN / 2.3 Acres
This 32,800 SF multi-tenant, two-building complex is located in Granger Industrial Park and has somespace available for lease. The property is fully fenced and served by well and septic.
Suite 2 is an end cap space consisting of 5,000 square feet with 800 square feet of office that includes 2privates and large reception area. There is also 800 square feet of mezzanine that has been built outinto a conference area. The office has air conditioning and heat and the warehouse is fully heated. Thesuite is individually metered for utilities and is served by 400 Amp / 220/440 Volt / 3 Phase electricservice and one 14’ tall overhead door with shared access to a grade level dock.
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SOUTH BEND/MISHAWAKA2Q17 INDUSTRIAL MARKET
All information contained in this publication is derived from sources that are deemed to be reliable. However, Newmark Grubb Cressy Commercial has not verified any such information, and the same constitutes the statements and representations only of the source thereof, and not of Newmark Grubb CressyCommercial. 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 Newmark Grubb Cressy Commercial, distribute, disseminate, publish, transmit, copy, broadcast, upload, download, or in any other way reproduce this publication or any of theinformation it contains.
©2017. Newmark Grubb Cressy Commercial 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.
Newmark Grubb Knight Frank & Newmark Grubb Affiliate Office LocationsNewmark Grubb Knight Frank & Newmark Grubb Affiliate Office Locations
Christian Davey, CCIM/SIORSenior Broker, Principal574.271.4060 (o)574.485.1534 (d)[email protected]
Years of Experience22
Areas of SpecializationIndustrialInvestmentOfficeRetail
Tony DaveySenior Broker574.271.4060 (o)574.485.1536 (d)[email protected]
Years of Experience25
Areas of SpecializationIndustrialTenant RepresentationSalesLeasing
Corporate Headquarters4100 Edison Lakes ParkwaySuite 350Mishawaka, IN 46545574.271.4060
NEW!South Bend Office100 E. Main Street, Suite 120South Bend, Indiana 46601574.485.1510
Fort Wayne Office200 E. Main StreetSuite 540Fort Wayne, IN 46802260.399.4057
Grand Rapids Office32 Market StreetSuite 302Grand Rapids, MI 49503616.456.6400 Socialize with us!
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