JACKSONVILLE
INDUSTRIAL
COLLIERS INTERNATIONAL
FOURTH QUARTER
|
2010
NORTHEAST FLORIDA
Industrial Overview Q4 2010
|
Research & Forecast Report
Overview The 4th quarter of 2010 can be characterized as a period of slow economic recovery and expansion, due to an increase in consumer spending and confidence, while also recognizing that weakness still remains in residential construction and certain other sectors. This translates into more leasing inquiries, a decline in vacancy rates from 11.6% in the 3rd quarter to 11.1% in the 4th quarter, and in the continued absence of new product, positive absorption of the existing inventory. Colliers expects the past decline in rental rates to stabilize somewhat as vacancy rates also decline. And as we move further into 2011, the expected decline in new unemployment figures, coupled with a late arrival of future job growth, will aid in further stabilization of the Jacksonville industrial sector. MARKET INDICATORS
Colliers International Featured Property of the Quarter Q4Q4 -10 Q1 Q 1 -11* 11 * VACANCY
36.77± Acre Multi-Modal, Waterfront HUB Adjacent To Jaxport Marine Terminals 9225 Dames Point Rd., Jacksonville, Fl 32226 • • • • • • • •
VACANT SUBLEASE NET ABSORPTION RENTAL RATES CONSTRUCTION
Deep Water Access Active CSX Rail Spur Over 286,059 SF of warehouse and manufacturing buildings Easy access to I-295, I-95, and I-10 36.77 Acre with 900’ frontage on the St. Johns River Zoned Industrial Waterfront Heavy electric and abundant water supply via onsite deep water well Sale Price: $14,500,000
* Q1-11 Projections
VACANCY RATE TRENDS TRENDS 12.00% 11.60% 11.50% 11.10% 11.00% 11.00% 10.70% 10.50%
10.30%
10.00%
9.50% 4Q' 09
1Q' 10
2Q' 10
3Q' 10
4Q' 10
Contact: Hobart Joost, Jr., SIOR, Principal Colliers International Northeast Florida Phone: 904.358.1206 or 904.861.1124 COLLIERS INTERNATIONAL
1
JACKSONVILLE
Industrial Statistics 4 th Quarter 2010 Industrial Building Inventory
•
Vacancy Flex: 14.1% Warehouse: 10.9% Total: 11.1% •
403,143 SF
Under Construction 235,000 SF
Base Triple Net Rental Averages:
•
Warehouse: $2.50-$3.90/SF Bulk Distribution:$3.00-$4.50/SF Flex:-$7.50-$12.00/SF
Industrial Acreage Asking Prices:
•
$50,000/acre (raw) _ $100,000/acre (entitled)
Shell Building Cost:
•
$48/sf (no land)
Industrial Cap Rates: 8% – 9%
CAM Averages Warehouse: $0.90-$1.20/SF Bulk Distribution: $1.25-$1.50/SF Flex: $2.25-$3.50/SF
FOURTH QUARTER
2010
News and Trends
120,450,383 SF
Net Absorption
INDUSTRIAL
•
The Jacksonville Port Authority announced the project to deepen the St. Johns River harbor is complete. The full length of the harbor is now at a depth of 40 feet, allowing fully-loaded cargo ships to continue using Jacksonville’s port. The deeper harbor will open the port to even larger cargo vessels and secure travel safety. The project was funded by the American Recovery and Reinvestment Act of 2009 and JAXPORT is working with the Army Corps of Engineers to deepen the shipping channel even further to a depth of up to 50 feet. Work is still needed on the “Mile Point” section to eliminate tidal currents that limit the times of day ships can off- and on-load cargo. The Jacksonville Port Authority requested permission from the US Foreign Trade Zone Board to expand the Jacksonville Port Authority’s Foreign Trade Zone from 1,300 acres to 2,000 acres. Within the Foreign Trade Zone, companies that import goods can receive the Foreign Trade Zone designation in about 30 days, which will allow them to import goods free of duties and excise taxes. Boeing has been awarded a $69.7 million contract with the U.S. Air Force to build the new drone aircraft at Cecil Field. The drones will be built by modifying existing F-16 aircraft. Boeing will begin the aircraft conversions in May 2011 and is expected to add 40 new jobs to their Cecil location. Mercedes Benz USA added a 400,000-square-foot parts distribution center at Jacksonville International TradePort. The project includes 100 new jobs to Jacksonville with a $26 million capital investment. The Jacksonville distribution center is a consolidation of several distribution centers across Florida and Georgia. AVMAX Montana is opening a heavy maintenance and modification facility for the regional jet and turboprop aviation industry at Jacksonville International Airport. The facility will initially employ as many as 100 to 120 licensed aircraft mechanics. Interline Brands Holds Grand Opening Ceremony - Interline Brands, a leading direct marketer and distributor of maintenance, repair and operations products, held the grand opening of its 275,000 sq. ft. distribution center at Westside Industrial Park. The Jacksonville headquartered company added 70 new jobs to the 600 already here.
COLLIERS INTERNATIONAL
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JACKSONVILLE
INDUSTRIAL
EXISTING PROPERTIES SubMarket
FLEX Arlington Beaches Butler Downtown Mandarin Nassau County
# Bldgs
Total Inventory SF
Direct SF
FOURTH QUARTER
VACANCY Total Vacant SF
Vacancy %
2010
CONSTRUCTION Under Construction Construction SF
YTD Net Absorption
YTD Deliveries
RENTS Quoted Rates
7 13 103 7 13 7 10 17 45 24 17 35 15 313
53,905 98,023 4,203,750 76,253 218,073 49,600 272,757 373,301 704,379 354,774 226,793 491,317 292,889 7,415,814
0 18,792 555,790 4,578 60,966 7,000 24,480 64,277 93,391 51,592 60,551 70,309 10,587 1,022,313
0 18,792 576,040 4,578 60,966 7,000 24,480 64,277 93,391 51,592 60,551 70,309 10,587 1,042,563
0.0% 19.2% 13.7% 6.0% 28.0% 14.1% 13.0% 17.2% 13.3% 14.5% 26.7% 14.3% 3.6% 14.1%
12,022 13,024 114,749 (4,578) (9,754) (3,461) (1,500) (1,350) (24,932) (27,910) 19 4,941 22,513 91,383
0 0 0 0 0 0 0 0 0 0 0 0 16,000 16,000
0 0 0 0 0 0 0 0 0 0 0 0 0 0
$8.32 $11.77 $8.99 $7.00 $7.07 $0.00 $12.00 $11.18 $8.72 $9.27 $9.34 $7.64 $7.22 $9.04
Orange Park (Clay) Riverside San Marco Southside St. Johns Westside TOTAL
58 127 394 460 49 104 229 154 673 223 83 261 509 3,324
849,549 982,806 15,209,350 11,621,058 964,926 3,533,844 18,972,153 5,042,852 16,899,333 4,120,377 968,629 4,552,514 29,191,831 112,909,222
136,086 76,210 2,456,921 827,251 78,360 38,596 2,680,942 700,449 1,203,164 298,115 74,135 580,437 2,823,794 11,974,460
136,086 81,510 2,456,921 827,251 78,360 38,596 2,785,942 700,449 1,203,164 298,115 74,135 581,431 2,919,794 12,181,754
16.0% 8.3% 16.2% 7.1% 8.1% 1.1% 14.4% 13.9% 7.1% 7.2% 7.7% 12.8% 10.0% 10.9%
7,931 79,554 (352,676) 62,308 (12,000) (14,396) (377,593) (34,819) (122,783) 14,292 35,191 65,770 525,876 (123,821)
0 0 0 0 0 2,000 0 0 0 0 0 0 252,000 254,000
0 0 0 0 0 0 0 0 235,000 0 0 0 261,659 496,659
$5.46 $8.78 $4.33 $2.71 $5.18 $3.64 $3.59 $4.63 $3.40 $4.10 $6.22 $5.30 $3.39 $3.82
MARKET TOTAL
3,637
120,325,026
12,996,773
13,224,317
11.1%
(32,438)
270,000
496,659
$4.09
Northside/Oceanway
Orange Park (Clay) Riverside San Marco Southside St. Johns Westside TOTAL WAREHOUSE Arlington Beaches Butler Downtown Mandarin Nassau County Northside/Oceanway
FOURTH QUARTER MARKET HIGHLIGHTS SIGNIFICANT LEASE TRANSACTIONS
Building • Center Point Business Park – Bldg 200 • TDC III, Phase II
Submarket Butler Northside
Tenant N/A DHL
Square Feet 25,000 13,500
Submarket Butler Southside Downtown Orange Park Southside
Buyer David Gonzales Corporation Read’s – Brooks Red Ball, Inc. InSteel Wire Products Storkwik Orange Park, LLC Filing Souce, Inc.
Square Feet 162,864 48,185 157,156 62,597 50,000
Delivery Delivery Date Second Quarter 2011
Square Feet 235,000 SF
SIGNIFICANT SALE SA LE TRANSACTIONS Address • Baywood Center – Baymeadows Road • 6411 Philips Highway • 3050 Melson Ave. • 2000 Wells Road • 11777 Central Parkway
$ $ $ $ $
Sale Price 6,800,000 6,627,400 2,711,268 2,290,000 2,200,000
Price/SF $ 41.75 $137.54 $ 17.25 $ 36.58 $ 44.00
SIGNIFICANT PROJECTS UNDER CONSTRUCTION Address • Waterworks Road
Project Saft Battery
Submarket Westside
Notes Owner Occupied
COLLIERS INTERNATIONAL
3
JACKSONVILLE
INDUSTRIAL
Transportation Network
Submarkets
Located in northeast Florida on the Atlantic Coast, Jacksonville is a major transportation hub.
Downtown: Primarily a waterfront industrial district, Downtown’s existing inventory includes warehouse/storage and port related uses. Construction is rare as a result of little developable land. Vacancy is consistently low due to lack of new product and demand for industrial space in proximity to the port.
Jaxport: The Port of Jacksonville currently has four operational marine terminals: TraPac (Northside), Talleyrand (Downtown), and Blount Island and Dames Point (Northside). Strategically located, Jaxport is able to handle every type of cargo, and has a growing business with Latin American markets. After New York City, Jacksonville imports the second largest amount of vehicles in the country. Roads: Local access to four interstates (I-95, I-10, I-295 and I-75) provides distribution along the entire U.S. East Coast, the southern tier of the nation to the Pacific Coast, and major sections of the South and Midwest. U.S. Highways 1,17, 90 and 301 also provide a link to the nation’s markets. Rail: CSX, Norfolk Southern and Florida East Coast service the area, offering connections to the eastern United States and Canada. Air: Jacksonville International Airport (JIA) and six other regional airports open up the world to business and leisure travelers with more than 120 nonstop flights to 34 U.S. cities, along with a network of major air freight companies that move millions of pounds of air cargo through JIA each year.
Northside: Most of the Northside’s industrial activity in recent years has been taking place in three large business parks – Northpoint, Imeson International and Jacksonville Tradeport. This trend should continue, supplemented by new industrial projects on the Northside near the new TraPac Terminal.
FOURTH QUARTER
COLLIERS INTERNATIONAL INTERNATIONAL 480 OFFICES IN 61 COUNTRIES
Clay/Orange Park: This submarket features mostly small industrial structures oriented toward servicing the nearby retail industry.
•
$1.9 Billion in revenue
•
2.4 Billion square feet under management
•
15,052 Professionals
COLLIERS INTERNATIONAL
Westside: Jacksonville’s largest industrial submarket is an attractive area for large distributors and manufacturers due to existing building supply and easy road and rail access. Westside Industrial Park and Westlake Industrial Park are currently producing most of this submarket’s new warehouse and distribution space. Southside: This densely populated submarket has seen intense competition for residential/retail land use in recent years, thereby limiting industrial development. Existing inventory consists mainly of smaller, higher office finish, multi-tenant industrial space. There is an increasing trend on the Southside toward mixed-use developments that include an industrial component.
2010
SALES / LEASING ASSET MANAGEMENT SITE SELECTION Industrial - Retail Office - Land VALUATION ACQUISITION CONSULTING SERVICES MARKET RESEARCH
Northeast Florida ` 13th in the Best Places to start a Business (Portfolio/Bizjournals -01/10) -
Top 5 Cites for Best Infrastructure (Foreign Direct Investment Magazine’s North American Cities of Future Study -2009)
- Hotspots for Young Professionals NOTE: Research findings contained in this report are based on the following criteria: 1.) Absorption calculations include only buildings to live and work in the US with a certificate of occupancy. 2.) Guidelines adhere to the National Association of Industrial and Office Properties (NAIOP) and (Next Generation Consulting-2009) Jacksonville Chamber of Commerce/Cornerstone database standards. Due to continual updates and refinements in the historical database, some of the data in this report may not match previously published reports. Information contained in this report has been obtained from - Top Hottest Cities in America sources deemed reliable but not guaranteed. The information herein is presented without any warranty or representations as to its accuracy. for Business Expansion and Source: CoStar Group & Colliers Dickinson.
Relocation for 8 consecutive years (Expansion Magazine)
- Top 10 Hottest Cities to lead job growth through 2015 (Business 2.0)
www.colliers.com/jacksonville Prepared By: Guy Preston Hobart Joost, Jr., SIOR Jeff Evans Kimberly Norman 4 COLLIERS INTERNATIONAL