Q4 2010 | INDUSTRIAL
SOUTHERN I-81 AND I-83
Market Trends 4Q 2010 Review and Forecast MARKET INDICATORS 2010 Q4
The Southern I-81 and I-83 Industrial Market, as defined by Colliers International, contains 92.4 million square feet of warehouse space in buildings over 50,000 square feet, not including military-owned facilities. The surveyed market includes the Southern Interstate 81 corridor in Lebanon, Dauphin, Cumberland, Franklin counties and along the Interstate 83 corridor in York County
VACANCY NET ABSORPTION
An increase in bulk activity during the previous four quarters helped to reverse the upward vacancy trend which began in 2007. Activity has been partially offset by continued space contractions. Most recently, Hershey closed its 597,100-square-foot distribution center in Mechanicsburg. Following the completion of three speculative buildings in 2009: Exeter Property Group’s 342,160-square foot spec facility in Northern York County, Lauth Property Group’s 1.0 million square feet and Exel/ING Real Estate’s 575,000 square feet at Exit 44 of I-81 in Carlisle, the most recent development cycle has stopped. The only projects currently under construction are a build-to-suit for Ollie’s Bargain Basement on Espresso Way in York County and the first phase of an expansion by Giant in Carlisle totaling 67,000 square feet. Ollies will be consolidating five area warehouses into its new location.
0% 2004 2005 2006 2007 2008 2009 2010 Absorption
In addition, construction has commenced on the Norfolk Southern intermodal hub in Chambersburg, which is anticipated to increase industrial demand along the I-81 corridor. Vacancy
NEW SUPPLY, ABSORPTION, VA-
UPDATE Market Statisics
NET ABSORPTION ANNUAL
AVG. ASKING RENT
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MARKET TRENDS (CONTâ€™D) Logistics, consumer products and retailers have been the most active sectors over the last year. Bay Valley Foods, a distributor of private label foods, recently leased the entire Key Distribution Center in Carlisle, one of the largest lease deals in the region in 2010. Asking rental rates generally averaged between $4.00 and $4.35 per square foot for new bulk space and from $3.25 to $3.95 for second generation warehouse space. Medium warehouse space ranges from $4.00 to $4.75 per square foot. The current asking rents do not reflect the deep discounting on signing rents. Modern bulk lease rates have been starting well under $4.00 per square foot. In order to compete with these buildings, owners of second generation buildings have been doing lease proposals under $3.00 per square foot.
Sales activity also slowed following an active first half when Hillwood acquired a 602,500-square-foot warehouse from Higgins in Carlisle and SK Realty acquired three net-leased buildings from the DEXUS North American Industrial Portfolio totaling 563,800 square feet. Prices for these buildings were between $40.00 and $45.00 per square foot. Investors have become more active in the market, and there are additional properties under agreement.
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LEASE ACTIVITY: 3Q -4Q 2010
LEE FEIN PROPERTY ADDRESS
1700 Ritner Road
Bay Valley Foods
300 Quality Circle
Performanc Radiator Pacific
Systems Material Handling Co.
80 S. Middlesex 275 Cross Farm Lane 3400 Industrial Road 1530 Bobali Drive
SENIOR VICE PRESIDENT
+1 610 684 1854 email@example.com MARK CHUBB SENIOR VICE PRESIDENT
+1 302 425 4077 firstname.lastname@example.org
Flex, warehouse and manufacturing buildings over 50,000 square feet
All spaces within established criteria physically vacant in a given market. For the purposes of this report, we have distinguished between direct and sublease vacant. Any space currently under construction or under substantial rehabilitation is not included in these totals.
The difference in physically occupied space within a given time period for a particular market.
Total vacant space divided by the total inventory.
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Average Asking Rent: Weighted average rent per square foot, triple net.
The foregoing information was furnished to us by sources which we deem to be reliable, but no warranty or representation is made as to the accuracy thereof. Subject to correction of errors, omissions, change of price, prior sale or withdrawal from market without notice.