Colliers Industrial Highlights Q2 2009 North America
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COLLIERS INTERNATIONAL
|
NORTH AMERICA
Highlights INDUSTRIAL
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SECOND QUARTER
|
2009
Industrial Market Contracts Sharply During Q2 Ross J. Moore, Executive Vice President, Market and Economic Research
MARKET INDICATORS Q2 2009
Q3 2009*
VACANCY NET ABSORPTION CONSTRUCTION RENTAL RATE *Projected, relative to prior period
USA INDUSTRIAL MARKET SUMMARY STATISTICS SECOND QUARTER 2009 Vacancy Rate Q2 2009: 10.16%
The U.S. industrial real estate market again posted an exceptionally weak quarter. Demand for industrial space was well below trend and warehouse construction continued to drop, but not quickly enough, as vacancies rose in most markets. Rents continued to fall with almost no region spared. With the economy only beginning to show tentative signs of stabilizing, warehouse markets are unlikely to bounce back anytime soon. The Institute for Supply Management (ISM) manufacturing index in particular showed a marked improvement with a June reading of 44.2, the sixth consecutive monthly improvement; however, this was still below the critical “50” level. For the rest of 2009, increasing vacancies and weak leasing conditions are expected to continue in almost all regions of the country. Warehouse tenants return space to the market at a record pace in the second quarter. Second quarter absorption was again strongly negative with occupied space decreasing by 57.5 million square feet (MSF). Second quarter results were the worst Colliers has ever recorded and considerably worse than the year-ago period when absorption registered –9.8 MSF. This brings year-to-date absorption to –99.7 MSF and leaves occupied space 121.6 MSF below peak levels recorded at the end of Q1 2008. Canadian markets also returned space to the market, with occupied space declining by 1.5 MSF. Warehouse construction less than a third of 18 months ago. Second quarter completions totaled just 16.7 MSF, a sizable drop from the second quarter when completions were 32.0 MSF, but less than a third of Q4 2007 levels when warehouse construction totaled 55.5 MSF. Next quarter’s construction numbers are anticipated to go even lower and stay below 20 MSF for the balance of the year and into 2010. Scarce construction financing and increased vacancies have almost halted speculative warehouse development across the country. This was reflected in construction activity, which registered just 35.0 MSF at the end of Q2, a substantial drop from
Change from Q1 2009: 0.63 Absorption Q2 2009:
continued on page 7
USA INDUSTRIAL MARKET Q2 2008 – Q2 2009
–57.5 Million Square Feet New Construction Q2 2009:
40
16.7 Million Square Feet Under Construction: 35.0 Million Square Feet
11% 10 9
20
8
0
Vacancy (%)
60
Million Square Feet
7
-20 -40
Asking Rents Per Square Foot: Average Warehouse/ Distribution Center: $5.09
-60
Q2 2008
Q3 2008
Absorption
Q4 2008
Q1 2009
Completions
Q2 2009 Vacancy
Change from Q1 2009: –3.47%
www.colliers.com Copyright © 2009 Colliers International. Colliers International is a worldwide affiliation of independently owned and operated companies.
COLLIERS INTERNATIONAL
1
UNITED STATES OF AMERICA
MARKET Atlanta, GA Bakersfield, CA Baltimore, MD Boise, ID Charleston, SC Charlotte, NC Chicago, IL Cincinnati, OH Cleveland, OH Columbia SC Columbus, OH Dallas-Ft. Worth, TX Denver, CO Detroit, MI Fairfield, CA Fresno, CA Ft. Lauderdale-Broward Co., FL Greenville, SC Hartford, CT Honolulu, HI Houston, TX Indianapolis, IN Jacksonville, FL Kansas City, MO Las Vegas, NV Little Rock, AR Los Angeles - Inland Empire, CA Los Angeles, CA Louisville, KY Memphis, TN Miami, FL Milwaukee, WI Minneapolis, MN Nashville, TN New Jersey - Central New Jersey - Northern Oakland, CA Orange County, CA Orlando, FL Philadelphia, PA Phoenix, AZ Pleasanton/Walnut Creek, CA Portland, OR Raleigh, NC Reno, NV Sacramento, CA San Diego, CA San Francisco Peninsula, CA San Jose/Silicon Valley, CA Seattle/Puget Sound, WA St. Louis, MO Stockton/San Joaquin County, CA Tampa Bay, FL Washington, DC West Palm Beach, FL USA TOTAL/AVERAGE
2
COLLIERS INTERNATIONAL
EXISTING INVENTORY (SF) JUNE 30, 2009 573,676,000 30,579,000 104,349,000 31,610,000 30,800,000 162,461,000 1,310,449,000 272,265,000 402,807,000 34,187,000 250,048,000 736,939,000 270,599,000 456,221,000 32,821,000 48,600,000 127,905,000 152,956,000 96,975,000 37,759,000 474,032,000 233,981,000 91,000,000 184,589,000 105,878,000 46,743,000 377,932,000 770,185,000 94,095,000 186,511,000 227,565,000 281,000,000 116,948,000 191,090,000 292,454,000 425,515,000 131,233,000 200,837,000 140,405,000 426,377,000 228,629,000 32,911,000 177,585,000 39,384,000 73,236,000 185,781,000 188,449,000 40,808,000 252,976,000 287,404,000 244,000,000 89,193,000 205,809,000 202,035,000 54,516,000 12,465,087,000
INDUSTRIAL SURVEY
NEW CONSTRUCTION Q2 2009 (SF)
NEW CONSTRUCTION YTD 2009 (SF)
CURRENTLY UNDER CONSTRUCTION (SF)
76,000 121,000 37,000 733,000 25,000 171,000 1,737,000 849,000 13,000 205,000 12,000 3,387,000 142,000 91,000 307,000 0 421,000 77,000 0 0 1,443,000 834,000 0 14,000 343,000 0 536,000 178,000 650,000 0 325,000 500,000 0 693,000 188,000 99,000 0 0 0 1,053,000 19,000 0 83,000 230,000 0 0 61,000 0 0 426,000 157,000 99,000 0 405,000 0 16,738,000
1,525,000 150,000 67,000 733,000 75,000 171,000 5,139,000 1,062,000 42,000 389,000 476,000 8,881,000 357,000 226,000 307,000 100,000 540,000 154,000 0 0 5,762,000 1,298,000 1,950,000 66,000 1,082,000 90,000 3,440,000 932,000 1,082,000 100,000 712,000 1,300,000 0 1,511,000 245,000 145,000 0 0 20,000 1,597,000 202,000 0 626,000 380,000 32,000 0 937,000 0 0 1,007,000 565,000 2,404,000 34,000 789,000 20,000 48,721,000
62,000 822,000 0 0 15,000 217,000 3,041,000 289,000 26,000 465,000 476,000 2,074,000 209,000 65,000 0 0 338,000 676,000 200,000 0 2,566,000 3,271,000 340,000 1,413,000 712,000 750,000 1,322,000 1,902,000 724,000 421,000 419,000 200,000 224,000 828,000 184,000 47,000 26,000 0 333,000 2,731,000 1,949,000 54,000 455,000 35,000 0 134,000 251,000 0 137,000 1,312,000 1,011,000 20,000 691,000 1,517,000 0 34,955,000
UNITED STATES OF AMERICA
INDUSTRIAL SURVEY
MARKET
ABSORPTION 2Q 2009 (SF)
ABSORPTION YTD 2009 (SF)
VACANCY RATE MARCH 31, 2009 (%)
Atlanta, GA Bakersfield, CA Baltimore, MD Boise, ID Charleston, SC Charlotte, NC Chicago, IL Cincinnati, OH Cleveland, OH Columbia SC Columbus, OH Dallas-Ft. Worth, TX Denver, CO Detroit, MI Fairfield, CA Fresno, CA Ft. Lauderdale-Broward Co., FL Greenville, SC Hartford, CT Honolulu, HI Houston, TX Indianapolis, IN Jacksonville, FL Kansas City, MO Las Vegas, NV Little Rock, AR Los Angeles - Inland Empire, CA Los Angeles, CA Louisville, KY Memphis, TN Miami, FL Milwaukee, WI Minneapolis, MN Nashville, TN New Jersey - Central New Jersey - Northern Oakland, CA Orange County, CA Orlando, FL Philadelphia, PA Phoenix, AZ Pleasanton/Walnut Creek, CA Portland, OR Raleigh, NC Reno, NV Sacramento, CA San Diego, CA San Francisco Peninsula, CA San Jose/Silicon Valley, CA Seattle/Puget Sound, WA St. Louis, MO Stockton/San Joaquin County, CA Tampa Bay, FL Washington, DC West Palm Beach, FL USA TOTAL/AVERAGE
(1,490,000) (151,000) (2,257,000) (829,000) 80,000 (305,000) (6,756,000) (1,577,000) (984,000) (137,000) (767,000) (694,000) (197,000) (1,096,000) (502,000) (150,000) (1,060,000) 446,000 0 (21,000) (220,000) 311,000 (3,200,000) (1,056,000) (1,423,000) (1,273,000) (2,343,000) (3,801,000) (569,000) (959,000) (1,373,000) 800,000 (1,773,000) 565,000 (1,377,000) (2,613,000) 891,000 (1,294,000) (2,480,000) 796,000 (2,720,000) (181,000) (937,000) (1,094,000) (696,000) (1,114,000) (1,452,000) (316,000) (2,976,000) (714,000) 375,000 (1,593,000) (1,626,000) (851,000) (717,000) (57,448,000)
(2,232,000) 118,000 (2,295,000) (960,000) 383,000 1,000 (15,076,000) (2,747,000) (2,204,000) (79,000) (942,000) (1,540,000) (1,016,000) (1,872,000) (520,000) (350,000) (1,693,000) (98,000) 0 (314,000) (21,000) 841,000 250,000 (2,359,000) (1,652,000) (1,273,000) (5,289,000) (7,476,000) (694,000) (2,358,000) (2,843,000) (100,000) (2,623,000) (381,000) (63,000) (4,246,000) (751,000) (2,091,000) (3,011,000) (391,000) (4,392,000) (971,000) (1,595,000) (924,000) (1,861,000) (1,770,000) (1,681,000) (958,000) (6,828,000) (1,139,000) 669,000 (1,979,000) (2,776,000) (1,933,000) (1,550,000) (99,652,000)
12.6 5.9 19.4 8.9 9.9 8.5 11.1 8.7 7.5 7.9 10.1 10.7 8.3 12.4 9.7 7.2 8.3 10.5 9.4 5.1 6.6 6.8 9.4 7.2 11.9 10.3 14.6 4.2 7.7 13.4 8.4 8.2 10.6 8.2 9.0 6.8 9.2 4.9 10.7 9.4 15.6 14.1 7.4 18.8 14.1 10.9 9.7 7.9 12.0 5.8 6.4 14.8 8.3 11.5 10.4 9.52
VACANCY RATE JUNE 30, 2009 (%) 12.9 6.8 21.6 11.2 9.6 8.3 11.7 9.5 7.8 7.5 12.0 11.2 8.7 13.9 11.2 6.9 9.4 10.8 9.4 5.1 6.9 7.0 11.7 7.8 13.5 13.0 15.1 4.8 8.3 13.9 9.1 8.1 12.1 8.2 9.5 7.5 8.5 5.6 12.5 9.4 17.0 14.7 8.2 21.5 15.3 11.5 10.4 8.5 12.8 6.3 6.3 16.7 9.3 12.4 11.8 10.16
COLLIERS INTERNATIONAL
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UNITED STATES OF AMERICA
MARKET
LAND PRICE, SALES PRICE AND CAP RATE AS OF JUNE 2009
LAND PRICE (US$ PSF)
SALES PRICE (US$ PSF)
CAP RATE %
1.50 5.00 5.74 3.00 2.30 1.95 4.37 2.00 1.32 1.20 2.04 1.70 4.00 – – 3.00 – 1.31 2.30 42.00 4.00 1.84 3.00 1.75 11.11 2.48 7.50 54.80 2.64 0.96 7.94 2.25 2.77 1.61 12.00 48.00 21.58 42.00 3.00 3.45 3.18 13.44 14.21 3.00 3.50 7.00 17.04 – 63.75 – 3.00 55.00 – – 14.61 10.77
39.00 48 60.00 65.00 42.00 – 39.00 – 48.00 50.00 18.35 39.00 45.00 40.00 – 36.00 82.06 50.00 41.00 – 93.00 – 40.00 55.00 127.00 37.50 86.00 113.00 32.50 30.00 96.45 55.00 48.00 – 85.00 100.00 65.62 140.00 65.00 44.44 59.22 – 79.17 4.00 42.54 75.00 134.68 300.00 – – 40.00 55.00 61.00 95.54 74.63 66.88
8.00 7.50 8.50 8.50 10.00 – 8.35 – 10.25 9.00 – 8.70 9.25 8.00 – 10.00 9.22 8.25 9.50 – 10.00 – 11.00 9.00 6.20 9.00 5.90 6.00 11.00 10.25 7.00 9.25 9.75 – 7.00 7.50 8.00 7.20 8.50 9.00 8.40 – – 10.50 8.25 7.60 – – – – 9.50 8.50 – – – 8.65
Atlanta, GA Bakersfield, CA Baltimore, MD Boise, ID Charleston, SC Charlotte, NC Chicago, IL Cincinnati, OH Cleveland, OH Columbia SC Columbus, OH Dallas-Ft. Worth, TX Denver, CO Detroit, MI Fairfield, CA Fresno, CA Ft. Lauderdale-Broward Co., FL Greenville, SC Hartford, CT Honolulu, HI Houston, TX Indianapolis, IN Jacksonville, FL Kansas City, MO Las Vegas, NV Little Rock, AR Los Angeles - Inland Empire, CA Los Angeles, CA Louisville, KY Memphis, TN Miami, FL Milwaukee, WI Minneapolis, MN Nashville, TN New Jersey - Central New Jersey - Northern Oakland, CA Orange County, CA Orlando, FL Philadelphia, PA Phoenix, AZ Pleasanton/Walnut Creek, CA Portland, OR Raleigh, NC Reno, NV Sacramento, CA San Diego, CA San Francisco Peninsula, CA San Jose/Silicon Valley, CA Seattle/Puget Sound, WA St. Louis, MO Stockton/San Joaquin County, CA Tampa Bay, FL Washington, DC West Palm Beach, FL USA AVERAGE
4
INDUSTRIAL SURVEY
COLLIERS INTERNATIONAL
VACANCY FORECAST ABSORPTION FORECAST RENT FORECAST (3 MONTHS) (3 MONTHS) (3 MONTHS) Up Same Up Up Up Same Up Up Up Up Up Up Up Up Down Same Up Up Same Up Up Same Up Up Up Up Up Up Up Same Up Same Up Down Up Down Down Up Up Up Up Down Up Same Same Up Up Up Up Same Up Down Up Up Up
Up Same Down Down Same Same Down Down Down Down Down Down Down Down Up Up Down Down Same Down Down Same Down Same Down Down Down Down Same Same Down Same Up Up Down Down Up Down Up Down Down Down Down Up Up Down Same Same Same Down Down Up Same Same Down
Down Same Down Down Down Down Down Down Down Same Down Down Down Down Same Same Down Same Same Down Down Down Down Same Down Same Down Down Down Down Down Down Down Same Down Down Same Down Down Down Down Down Same Same Same Down Down Down Down Same Down Down Down Down Down
UNITED STATES OF AMERICA
MARKET Atlanta, GA Bakersfield, CA Baltimore, MD Boise, ID Charleston, SC Charlotte, NC Chicago, IL Cincinnati, OH Cleveland, OH Columbia SC Columbus, OH Dallas-Ft. Worth, TX Denver, CO Detroit, MI Fairfield, CA Fresno, CA Ft. Lauderdale-Broward Co., FL Greenville, SC Hartford, CT Honolulu, HI Houston, TX Indianapolis, IN Jacksonville, FL Kansas City, MO Las Vegas, NV Little Rock, AR Los Angeles - Inland Empire, CA Los Angeles, CA Louisville, KY Memphis, TN Miami, FL Milwaukee, WI Minneapolis, MN Nashville, TN New Jersey - Central New Jersey - Northern Oakland, CA Orange County, CA Orlando, FL Philadelphia, PA Phoenix, AZ Pleasanton/Walnut Creek, CA Portland, OR Raleigh, NC Reno, NV Sacramento, CA San Diego, CA San Francisco Peninsula, CA San Jose/Silicon Valley, CA Seattle/Puget Sound, WA St. Louis, MO Stockton/San Joaquin County, CA Tampa Bay, FL Washington, DC West Palm Beach, FL USA AVERAGE Quarterly Change
INDUSTRIAL SURVEY
RENTS AS OF JUNE 2009
WAREHOUSE/DISTRIBUTION SPACE (US$ PSF)
BULK SPACE (US$ PSF)
FLEX/SERVICE SPACE (US$ PSF)
TECH/R&D SPACE (US$ PSF)
3.52 4.00 5.99 5.40 3.55 3.65 3.93 2.70 2.90 4.25 3.15 3.15 4.00 4.37 6.00 3.36 7.33 3.12 5.75 13.80 5.50 4.75 3.00 4.00 6.46 3.57 4.31 6.84 3.30 2.69 7.65 4.20 4.39 4.28 4.78 5.84 4.80 8.01 5.32 4.00 5.40 4.56 5.37 4.30 3.84 5.04 8.52 9.96 6.00 7.09 3.25 3.60 5.13 8.34 7.70 5.09 -3.50%
3.30 3.95 4.61 5.40 4.15 3.25 2.21 2.70 3.50 4.00 2.95 2.95 3.50 – – 2.40 6.73 3.25 4.50 – 4.95 2.85 3.75 3.50 – – 4.28 6.75 3.05 2.55 6.74 3.50 4.23 3.76 4.30 5.26 6.36 7.80 4.95 3.75 8.40 – 5.36 3.75 2.88 3.60 – 9.96 8.40 7.81 2.75 – 4.88 – 7.57 4.59 -4.89%
8.38 7.00 9.68 6.60 6.00 7.50 9.83 4.75 8.74 6.50 – 7.20 9.00 9.26 9.60 5.75 10.10 7.50 9.50 – 8.38 6.25 9.00 8.50 8.64 – 7.45 14.50 9.00 7.72 11.80 4.55 4.80 7.49 13.77 10.55 6.76 14.25 9.59 7.50 12.84 10.80 9.71 8.00 8.64 11.04 11.76 21.96 – 11.23 6.00 6.00 9.05 13.26 11.71 9.13 -0.82%
7.57 – – 6.60 16.00 7.50 – – 9.00 9.50 – 8.55 10.00 – – 7.20 11.80 8.00 9.50 – 9.56 – – 12.00 12.51 – 10.63 15.25 – 10.00 – 4.60 4.80 7.49 15.00 15.00 11.28 13.85 9.52 12.00 – – 8.55 10.00 – 12.60 16.92 21.96 13.92 12.27 15.00 7.68 10.49 – 11.16 10.93 0.45%
COLLIERS INTERNATIONAL
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CANADA
INDUSTRIAL SURVEY AND RENTS
INDUSTRIAL SURVEY MARKET
EXISTING INVENTORY (SF) JUNE 30, 2009
NEW CONSTRUCTION Q2 2009 (SF)
NEW CONSTRUCTION YTD 2009 (SF)
117,500,000 76,000,000 7,045,000 338,172,000 27,919,000 14,908,000 18,900,000 720,022,000 174,005,000 60,984,000 1,555,454,000
203,000 0 0 450,000 0 53,000 200,000 994,000 1,976,000 38,000 3,915,000
1,030,000 0 10,000 516,000 0 53,000 400,000 5,250,000 2,808,000 141,000 10,208,000
ABSORPTION 2Q 2009 (SF)
ABSORPTION YTD 2009 (SF)
VACANCY RATE MARCH 31, 2009 (%)
VACANCY RATE JUNE 30, 2009 (%)
(362,000) (1,963,000) 8,000 1,419,000 69,000 175,000 (105,000) (623,000) 76,000 (192,000) (1,497,000)
250,000 (1,737,000) (15,000) 422,000 207,000 (55,000) 167,000 (4,230,000) 535,000 (575,000) (5,029,000)
4.5 3.4 7.2 7.1 3.8 2.3 2.0 6.4 2.7 5.7 5.70
5.1 4.2 7.1 6.8 4.4 1.4 3.6 6.4 3.8 6.1 5.88
Calgary, AB Edmonton, AB Halifax, NS Montreal, QC Ottawa, ON Regina, SK Saskatoon, SK Toronto Vancouver, BC Waterloo Region CANADA TOTAL/AVERAGE
CURRENTLY UNDER CONSTRUCTION (SF) 300,000 963,000 25,000 208,000 209,000 21,000 100,000 3,401,000 2,024,000 110,000 7,360,000
INDUSTRIAL SURVEY MARKET Calgary, AB Edmonton, AB Halifax, NS Montreal, QC Ottawa, ON Regina, SK Saskatoon, SK Toronto Vancouver, BC Waterloo Region CANADA TOTAL/AVERAGE
INDUSTRIAL SURVEY | LAND PRICE, SALES PRICE AND CAP RATE AS OF JUNE 2009 MARKET
LAND PRICE (C$ PSF)
SALES PRICE (C$ PSF)
CAP RATE %
11.82 12.66 5.75 11.00 9.00 6.08 8.00 13.50 25.25 7.41 11.05
105.00 128.00 – – 87.00 66.00 100.00 64.50 100.00 83.00 91.69
7.25 7.60 – – 8.88 8.85 8.50 7.00 7.00 7.50 7.82
Calgary, AB Edmonton, AB Halifax, NS Montreal, QC Ottawa, ON Regina, SK Saskatoon, SK Toronto Vancouver, BC Waterloo Region CANADA AVERAGE
VACANCY FORECAST ABSORPTION FORECAST RENT FORECAST (3 MONTHS) (3 MONTHS) (3 MONTHS) Same Up Same Same Same Same Up Up Up Up
Up Down Same Same Up Up Same Down Down Down
Same Down Same Same Same Same Same Down Down Down
INDUSTRIAL SURVEY | RENTS AS OF JUNE 2009 MARKET
WAREHOUSE/DISTRIBUTION SPACE (C$ PSF)
Calgary, AB Edmonton, AB Halifax, NS Montreal, QC Ottawa, ON Regina, SK Saskatoon, SK Toronto Vancouver, BC Waterloo Region CANADA AVERAGE Quarterly Change
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COLLIERS INTERNATIONAL
7.00 7.40 6.75 4.50 7.00 8.00 8.50 5.50 7.00 5.13 6.68 -2.94%
BULK SPACE (C$ PSF)
FLEX/SERVICE SPACE (C$ PSF)
TECH/R&D SPACE (C$ PSF)
6.50 6.50 5.00 4.00 6.88 6.50 7.50 5.04 6.50 5.13 5.96 -3.22%
9.25 8.15 8.95 6.50 8.50 12.00 9.00 7.91 8.50 8.65 8.74 -0.60%
10.00 9.00 13.95 8.00 10.00 14.00 13.00 8.57 9.50 8.65 10.47 -1.99%
UNITED STATES OF AMERICA
MARKET Pleasanton/Walnut Creek, CA Reno, NV Los Angeles - Inland Empire, CA Las Vegas, NV Stockton/San Joaquin County, CA Jacksonville, FL Boise, ID Columbia, SC Orlando, FL Baltimore, MD San Francisco Peninsula - San Mateo, CA Raleigh, NC West Palm Beach, FL Ft. Lauderdale-Broward, FL Phoenix, AZ San Jose/Silicon Valley, CA Miami, FL Cincinnati, OH Charleston, SC Tampa Bay, FL Chicago, IL Columbus, OH Washington, DC Nashville, TN San Diego, CA Dallas-Ft. Worth, TX USA AVERAGE New Jersey - Central Denver, CO Los Angeles, CA Bakersfield, CA Kansas City, MO Sacramento, CA Orange County, CA Portland, OR Honolulu, HI Charlotte, NC Atlanta, GA Houston, TX Fairfield, CA Minneapolis, MN Oakland, CA New Jersey - Northern Greenville, SC Fresno, CA Philadelphia, PA Detroit, MI Louisville, KY Milwaukee, WI Seattle/Puget Sound, WA Cleveland, OH Memphis, TN Hartford, CT St. Louis, MO Indianapolis, IN Little Rock, AR
VACANCY RATE JUNE 30, 2008 (%) 9.2 10.1 9.9 8.5 11.8 7.0 6.5 2.9 8.5 18.1 5.1 18.1 8.4 6.2 13.9 10.0 6.3 6.8 7.1 6.9 9.4 9.7 10.4 6.2 8.5 9.5 8.44 7.8 7.1 3.3 5.4 6.4 10.2 4.3 6.9 4.0 7.2 11.8 5.9 10.2 11.2 7.6 6.5 9.9 6.0 8.6 13.1 7.6 7.5 6.1 7.7 13.9 9.9 6.9 8.1 15.2
INDUSTRIAL SURVEY
VACANCY RATE JUNE 30, 2009 (%) 14.7 15.3 15.1 13.5 16.7 11.7 11.2 7.5 12.5 21.6 8.5 21.5 11.8 9.4 17.0 12.8 9.1 9.5 9.6 9.3 11.7 12.0 12.4 8.2 10.4 11.2 10.16 9.5 8.7 4.8 6.8 7.8 11.5 5.6 8.2 5.1 8.3 12.9 6.9 11.2 12.1 8.5 7.5 10.8 6.9 9.4 13.9 8.3 8.1 6.3 7.8 13.9 9.4 6.3 7.0 13.0
VACANCY RATES
Industrial Market Contracts Sharply During Q2 CHANGE 5.47 5.14 5.14 5.00 4.86 4.69 4.64 4.63 4.00 3.53 3.43 3.41 3.41 3.17 3.09 2.87 2.83 2.76 2.56 2.36 2.30 2.26 2.02 1.98 1.91 1.78 1.71 1.65 1.62 1.50 1.44 1.40 1.33 1.24 1.23 1.16 1.08 1.06 1.05 1.00 0.96 0.96 0.94 0.90 0.90 0.84 0.81 0.69 0.61 0.19 0.15 (0.03) (0.52) (0.55) (1.04) (2.19)
Continued from page 1
153.5 MSF under construction at the end of the third quarter of 2007 and below levels last seen in early 2003. U.S. industrial vacancy rate again goes higher. The industrial warehouse vacancy rate increased by 63 basis points during the second quarter to register double-digit vacancies at 10.16%. This brought the national vacancy rate back to levels recorded during the second quarter of 2004 and up 122 basis points from the beginning of the year. Out of the 55 markets tracked across the country, 48 saw vacancies increase while seven registered declines. Canadian warehouse vacancies also increased during the quarter, jumping by 18 basis points to 5.88%, a level not seen since 1997. Rents drop 3.5% during the quarter. For the third consecutive quarter warehouse rents posted a substantial decrease, with average asking rents down 3.5% to $5.27 per square foot. With this latest decrease, U.S. warehouse rents are down 9.0% over the last nine months. Reflecting the widespread nature of the downturn, 47 of the 56 markets surveyed by Colliers showed a drop in average warehouse rents during Q2. Canadian warehouse rents also decreased, falling 2.9% during the quarter to $6.68 per square foot. GLOSSARY Absorption – Net change in leased space over a given period of time. Bulk Space – 100,000 square feet or more with up to 10 percent office space, the balance being general warehouse space with 20 to 36 foot ceiling heights. All loading is dock-height. Flex Space – Single-story buildings having 10- to 18-foot ceilings with both floor-height and dock-height loading. Includes wide variation in office space utilization, ranging from retail and personal service through distribution, light industrial and occasional heavy industrial use. Inventory – Includes all existing multi or single tenant leased and owner-occupied industrial warehouse, light manufacturing, flex and R&D properties greater than or equal to 10,000 square feet. New Construction – Includes completed speculative and build-tosuit construction. New construction quoted on a net basis after any demolitions or conversions. Service Space – Single story (or mezzanine) with 10- to 16-foot ceilings with frontage treatment on one side and dock-height loading or grade level roll-up doors on the other. Less than 15% office. Tech/R&D – One- and two- story, 10- to 15-foot ceiling heights with up to 50% office/dry lab space (remainder in wet lab, workshop, storage and other support), with dock-height and floor-height loading. Triple Net Rent – Includes rent payable to the landlord and does not include additional expenses such as taxes, insurance, maintenance, janitorial and utilities. All industrial and high-tech/R&D rents in this report are quoted on an annual, triple net per square foot basis in U.S. dollars. Vacancy Rate – Percentage of total inventory available (both vacant and occupied) as at the survey date including direct vacant and sublease space. Warehouse – 50,000 square feet or more with up to 15 percent office space, the balance being general warehouse space with 18 to 30 foot ceiling heights. All loading is dock-height.
The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.
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7
COLLIERS INTERNATIONAL
HIGHLIGHTS · NORTH AMERICA
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INDUSTRIAL · SECOND QUARTER 2009
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COLLIERS INTERNATIONAL
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NORTH AMERICA
Highlights INDUSTRIAL
|
SECOND QUARTER
|
2009
Industrial Market Contracts Sharply During Q2 Ross J. Moore, Executive Vice President, Market and Economic Research
MARKET INDICATORS Q2 2009
Q3 2009*
VACANCY NET ABSORPTION CONSTRUCTION RENTAL RATE *Projected, relative to prior period
USA INDUSTRIAL MARKET SUMMARY STATISTICS SECOND QUARTER 2009 Vacancy Rate Q2 2009: 10.16%
The U.S. industrial real estate market again posted an exceptionally weak quarter. Demand for industrial space was well below trend and warehouse construction continued to drop, but not quickly enough, as vacancies rose in most markets. Rents continued to fall with almost no region spared. With the economy only beginning to show tentative signs of stabilizing, warehouse markets are unlikely to bounce back anytime soon. The Institute for Supply Management (ISM) manufacturing index in particular showed a marked improvement with a June reading of 44.2, the sixth consecutive monthly improvement; however, this was still below the critical “50” level. For the rest of 2009, increasing vacancies and weak leasing conditions are expected to continue in almost all regions of the country. Warehouse tenants return space to the market at a record pace in the second quarter. Second quarter absorption was again strongly negative with occupied space decreasing by 57.5 million square feet (MSF). Second quarter results were the worst Colliers has ever recorded and considerably worse than the year-ago period when absorption registered –9.8 MSF. This brings year-to-date absorption to –99.7 MSF and leaves occupied space 121.6 MSF below peak levels recorded at the end of Q1 2008. Canadian markets also returned space to the market, with occupied space declining by 1.5 MSF. Warehouse construction less than a third of 18 months ago. Second quarter completions totaled just 16.7 MSF, a sizable drop from the second quarter when completions were 32.0 MSF, but less than a third of Q4 2007 levels when warehouse construction totaled 55.5 MSF. Next quarter’s construction numbers are anticipated to go even lower and stay below 20 MSF for the balance of the year and into 2010. Scarce construction financing and increased vacancies have almost halted speculative warehouse development across the country. This was reflected in construction activity, which registered just 35.0 MSF at the end of Q2, a substantial drop from
Change from Q1 2009: 0.63 Absorption Q2 2009:
continued on page 7
USA INDUSTRIAL MARKET Q2 2008 – Q2 2009
–57.5 Million Square Feet New Construction Q2 2009:
40
16.7 Million Square Feet Under Construction: 35.0 Million Square Feet
11% 10 9
20
8
0
Vacancy (%)
60
Million Square Feet
7
-20 -40
Asking Rents Per Square Foot: Average Warehouse/ Distribution Center: $5.09
-60
Q2 2008
Q3 2008
Absorption
Q4 2008
Q1 2009
Completions
Q2 2009 Vacancy
Change from Q1 2009: –3.47%
www.colliers.com Copyright © 2009 Colliers International. Colliers International is a worldwide affiliation of independently owned and operated companies.
COLLIERS INTERNATIONAL
1
UNITED STATES OF AMERICA
MARKET Atlanta, GA Bakersfield, CA Baltimore, MD Boise, ID Charleston, SC Charlotte, NC Chicago, IL Cincinnati, OH Cleveland, OH Columbia SC Columbus, OH Dallas-Ft. Worth, TX Denver, CO Detroit, MI Fairfield, CA Fresno, CA Ft. Lauderdale-Broward Co., FL Greenville, SC Hartford, CT Honolulu, HI Houston, TX Indianapolis, IN Jacksonville, FL Kansas City, MO Las Vegas, NV Little Rock, AR Los Angeles - Inland Empire, CA Los Angeles, CA Louisville, KY Memphis, TN Miami, FL Milwaukee, WI Minneapolis, MN Nashville, TN New Jersey - Central New Jersey - Northern Oakland, CA Orange County, CA Orlando, FL Philadelphia, PA Phoenix, AZ Pleasanton/Walnut Creek, CA Portland, OR Raleigh, NC Reno, NV Sacramento, CA San Diego, CA San Francisco Peninsula, CA San Jose/Silicon Valley, CA Seattle/Puget Sound, WA St. Louis, MO Stockton/San Joaquin County, CA Tampa Bay, FL Washington, DC West Palm Beach, FL USA TOTAL/AVERAGE
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COLLIERS INTERNATIONAL
EXISTING INVENTORY (SF) JUNE 30, 2009 573,676,000 30,579,000 104,349,000 31,610,000 30,800,000 162,461,000 1,310,449,000 272,265,000 402,807,000 34,187,000 250,048,000 736,939,000 270,599,000 456,221,000 32,821,000 48,600,000 127,905,000 152,956,000 96,975,000 37,759,000 474,032,000 233,981,000 91,000,000 184,589,000 105,878,000 46,743,000 377,932,000 770,185,000 94,095,000 186,511,000 227,565,000 281,000,000 116,948,000 191,090,000 292,454,000 425,515,000 131,233,000 200,837,000 140,405,000 426,377,000 228,629,000 32,911,000 177,585,000 39,384,000 73,236,000 185,781,000 188,449,000 40,808,000 252,976,000 287,404,000 244,000,000 89,193,000 205,809,000 202,035,000 54,516,000 12,465,087,000
INDUSTRIAL SURVEY
NEW CONSTRUCTION Q2 2009 (SF)
NEW CONSTRUCTION YTD 2009 (SF)
CURRENTLY UNDER CONSTRUCTION (SF)
76,000 121,000 37,000 733,000 25,000 171,000 1,737,000 849,000 13,000 205,000 12,000 3,387,000 142,000 91,000 307,000 0 421,000 77,000 0 0 1,443,000 834,000 0 14,000 343,000 0 536,000 178,000 650,000 0 325,000 500,000 0 693,000 188,000 99,000 0 0 0 1,053,000 19,000 0 83,000 230,000 0 0 61,000 0 0 426,000 157,000 99,000 0 405,000 0 16,738,000
1,525,000 150,000 67,000 733,000 75,000 171,000 5,139,000 1,062,000 42,000 389,000 476,000 8,881,000 357,000 226,000 307,000 100,000 540,000 154,000 0 0 5,762,000 1,298,000 1,950,000 66,000 1,082,000 90,000 3,440,000 932,000 1,082,000 100,000 712,000 1,300,000 0 1,511,000 245,000 145,000 0 0 20,000 1,597,000 202,000 0 626,000 380,000 32,000 0 937,000 0 0 1,007,000 565,000 2,404,000 34,000 789,000 20,000 48,721,000
62,000 822,000 0 0 15,000 217,000 3,041,000 289,000 26,000 465,000 476,000 2,074,000 209,000 65,000 0 0 338,000 676,000 200,000 0 2,566,000 3,271,000 340,000 1,413,000 712,000 750,000 1,322,000 1,902,000 724,000 421,000 419,000 200,000 224,000 828,000 184,000 47,000 26,000 0 333,000 2,731,000 1,949,000 54,000 455,000 35,000 0 134,000 251,000 0 137,000 1,312,000 1,011,000 20,000 691,000 1,517,000 0 34,955,000
UNITED STATES OF AMERICA
INDUSTRIAL SURVEY
MARKET
ABSORPTION 2Q 2009 (SF)
ABSORPTION YTD 2009 (SF)
VACANCY RATE MARCH 31, 2009 (%)
Atlanta, GA Bakersfield, CA Baltimore, MD Boise, ID Charleston, SC Charlotte, NC Chicago, IL Cincinnati, OH Cleveland, OH Columbia SC Columbus, OH Dallas-Ft. Worth, TX Denver, CO Detroit, MI Fairfield, CA Fresno, CA Ft. Lauderdale-Broward Co., FL Greenville, SC Hartford, CT Honolulu, HI Houston, TX Indianapolis, IN Jacksonville, FL Kansas City, MO Las Vegas, NV Little Rock, AR Los Angeles - Inland Empire, CA Los Angeles, CA Louisville, KY Memphis, TN Miami, FL Milwaukee, WI Minneapolis, MN Nashville, TN New Jersey - Central New Jersey - Northern Oakland, CA Orange County, CA Orlando, FL Philadelphia, PA Phoenix, AZ Pleasanton/Walnut Creek, CA Portland, OR Raleigh, NC Reno, NV Sacramento, CA San Diego, CA San Francisco Peninsula, CA San Jose/Silicon Valley, CA Seattle/Puget Sound, WA St. Louis, MO Stockton/San Joaquin County, CA Tampa Bay, FL Washington, DC West Palm Beach, FL USA TOTAL/AVERAGE
(1,490,000) (151,000) (2,257,000) (829,000) 80,000 (305,000) (6,756,000) (1,577,000) (984,000) (137,000) (767,000) (694,000) (197,000) (1,096,000) (502,000) (150,000) (1,060,000) 446,000 0 (21,000) (220,000) 311,000 (3,200,000) (1,056,000) (1,423,000) (1,273,000) (2,343,000) (3,801,000) (569,000) (959,000) (1,373,000) 800,000 (1,773,000) 565,000 (1,377,000) (2,613,000) 891,000 (1,294,000) (2,480,000) 796,000 (2,720,000) (181,000) (937,000) (1,094,000) (696,000) (1,114,000) (1,452,000) (316,000) (2,976,000) (714,000) 375,000 (1,593,000) (1,626,000) (851,000) (717,000) (57,448,000)
(2,232,000) 118,000 (2,295,000) (960,000) 383,000 1,000 (15,076,000) (2,747,000) (2,204,000) (79,000) (942,000) (1,540,000) (1,016,000) (1,872,000) (520,000) (350,000) (1,693,000) (98,000) 0 (314,000) (21,000) 841,000 250,000 (2,359,000) (1,652,000) (1,273,000) (5,289,000) (7,476,000) (694,000) (2,358,000) (2,843,000) (100,000) (2,623,000) (381,000) (63,000) (4,246,000) (751,000) (2,091,000) (3,011,000) (391,000) (4,392,000) (971,000) (1,595,000) (924,000) (1,861,000) (1,770,000) (1,681,000) (958,000) (6,828,000) (1,139,000) 669,000 (1,979,000) (2,776,000) (1,933,000) (1,550,000) (99,652,000)
12.6 5.9 19.4 8.9 9.9 8.5 11.1 8.7 7.5 7.9 10.1 10.7 8.3 12.4 9.7 7.2 8.3 10.5 9.4 5.1 6.6 6.8 9.4 7.2 11.9 10.3 14.6 4.2 7.7 13.4 8.4 8.2 10.6 8.2 9.0 6.8 9.2 4.9 10.7 9.4 15.6 14.1 7.4 18.8 14.1 10.9 9.7 7.9 12.0 5.8 6.4 14.8 8.3 11.5 10.4 9.52
VACANCY RATE JUNE 30, 2009 (%) 12.9 6.8 21.6 11.2 9.6 8.3 11.7 9.5 7.8 7.5 12.0 11.2 8.7 13.9 11.2 6.9 9.4 10.8 9.4 5.1 6.9 7.0 11.7 7.8 13.5 13.0 15.1 4.8 8.3 13.9 9.1 8.1 12.1 8.2 9.5 7.5 8.5 5.6 12.5 9.4 17.0 14.7 8.2 21.5 15.3 11.5 10.4 8.5 12.8 6.3 6.3 16.7 9.3 12.4 11.8 10.16
COLLIERS INTERNATIONAL
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UNITED STATES OF AMERICA
MARKET
LAND PRICE, SALES PRICE AND CAP RATE AS OF JUNE 2009
LAND PRICE (US$ PSF)
SALES PRICE (US$ PSF)
CAP RATE %
1.50 5.00 5.74 3.00 2.30 1.95 4.37 2.00 1.32 1.20 2.04 1.70 4.00 – – 3.00 – 1.31 2.30 42.00 4.00 1.84 3.00 1.75 11.11 2.48 7.50 54.80 2.64 0.96 7.94 2.25 2.77 1.61 12.00 48.00 21.58 42.00 3.00 3.45 3.18 13.44 14.21 3.00 3.50 7.00 17.04 – 63.75 – 3.00 55.00 – – 14.61 10.77
39.00 48 60.00 65.00 42.00 – 39.00 – 48.00 50.00 18.35 39.00 45.00 40.00 – 36.00 82.06 50.00 41.00 – 93.00 – 40.00 55.00 127.00 37.50 86.00 113.00 32.50 30.00 96.45 55.00 48.00 – 85.00 100.00 65.62 140.00 65.00 44.44 59.22 – 79.17 4.00 42.54 75.00 134.68 300.00 – – 40.00 55.00 61.00 95.54 74.63 66.88
8.00 7.50 8.50 8.50 10.00 – 8.35 – 10.25 9.00 – 8.70 9.25 8.00 – 10.00 9.22 8.25 9.50 – 10.00 – 11.00 9.00 6.20 9.00 5.90 6.00 11.00 10.25 7.00 9.25 9.75 – 7.00 7.50 8.00 7.20 8.50 9.00 8.40 – – 10.50 8.25 7.60 – – – – 9.50 8.50 – – – 8.65
Atlanta, GA Bakersfield, CA Baltimore, MD Boise, ID Charleston, SC Charlotte, NC Chicago, IL Cincinnati, OH Cleveland, OH Columbia SC Columbus, OH Dallas-Ft. Worth, TX Denver, CO Detroit, MI Fairfield, CA Fresno, CA Ft. Lauderdale-Broward Co., FL Greenville, SC Hartford, CT Honolulu, HI Houston, TX Indianapolis, IN Jacksonville, FL Kansas City, MO Las Vegas, NV Little Rock, AR Los Angeles - Inland Empire, CA Los Angeles, CA Louisville, KY Memphis, TN Miami, FL Milwaukee, WI Minneapolis, MN Nashville, TN New Jersey - Central New Jersey - Northern Oakland, CA Orange County, CA Orlando, FL Philadelphia, PA Phoenix, AZ Pleasanton/Walnut Creek, CA Portland, OR Raleigh, NC Reno, NV Sacramento, CA San Diego, CA San Francisco Peninsula, CA San Jose/Silicon Valley, CA Seattle/Puget Sound, WA St. Louis, MO Stockton/San Joaquin County, CA Tampa Bay, FL Washington, DC West Palm Beach, FL USA AVERAGE
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INDUSTRIAL SURVEY
COLLIERS INTERNATIONAL
VACANCY FORECAST ABSORPTION FORECAST RENT FORECAST (3 MONTHS) (3 MONTHS) (3 MONTHS) Up Same Up Up Up Same Up Up Up Up Up Up Up Up Down Same Up Up Same Up Up Same Up Up Up Up Up Up Up Same Up Same Up Down Up Down Down Up Up Up Up Down Up Same Same Up Up Up Up Same Up Down Up Up Up
Up Same Down Down Same Same Down Down Down Down Down Down Down Down Up Up Down Down Same Down Down Same Down Same Down Down Down Down Same Same Down Same Up Up Down Down Up Down Up Down Down Down Down Up Up Down Same Same Same Down Down Up Same Same Down
Down Same Down Down Down Down Down Down Down Same Down Down Down Down Same Same Down Same Same Down Down Down Down Same Down Same Down Down Down Down Down Down Down Same Down Down Same Down Down Down Down Down Same Same Same Down Down Down Down Same Down Down Down Down Down
UNITED STATES OF AMERICA
MARKET Atlanta, GA Bakersfield, CA Baltimore, MD Boise, ID Charleston, SC Charlotte, NC Chicago, IL Cincinnati, OH Cleveland, OH Columbia SC Columbus, OH Dallas-Ft. Worth, TX Denver, CO Detroit, MI Fairfield, CA Fresno, CA Ft. Lauderdale-Broward Co., FL Greenville, SC Hartford, CT Honolulu, HI Houston, TX Indianapolis, IN Jacksonville, FL Kansas City, MO Las Vegas, NV Little Rock, AR Los Angeles - Inland Empire, CA Los Angeles, CA Louisville, KY Memphis, TN Miami, FL Milwaukee, WI Minneapolis, MN Nashville, TN New Jersey - Central New Jersey - Northern Oakland, CA Orange County, CA Orlando, FL Philadelphia, PA Phoenix, AZ Pleasanton/Walnut Creek, CA Portland, OR Raleigh, NC Reno, NV Sacramento, CA San Diego, CA San Francisco Peninsula, CA San Jose/Silicon Valley, CA Seattle/Puget Sound, WA St. Louis, MO Stockton/San Joaquin County, CA Tampa Bay, FL Washington, DC West Palm Beach, FL USA AVERAGE Quarterly Change
INDUSTRIAL SURVEY
RENTS AS OF JUNE 2009
WAREHOUSE/DISTRIBUTION SPACE (US$ PSF)
BULK SPACE (US$ PSF)
FLEX/SERVICE SPACE (US$ PSF)
TECH/R&D SPACE (US$ PSF)
3.52 4.00 5.99 5.40 3.55 3.65 3.93 2.70 2.90 4.25 3.15 3.15 4.00 4.37 6.00 3.36 7.33 3.12 5.75 13.80 5.50 4.75 3.00 4.00 6.46 3.57 4.31 6.84 3.30 2.69 7.65 4.20 4.39 4.28 4.78 5.84 4.80 8.01 5.32 4.00 5.40 4.56 5.37 4.30 3.84 5.04 8.52 9.96 6.00 7.09 3.25 3.60 5.13 8.34 7.70 5.09 -3.50%
3.30 3.95 4.61 5.40 4.15 3.25 2.21 2.70 3.50 4.00 2.95 2.95 3.50 – – 2.40 6.73 3.25 4.50 – 4.95 2.85 3.75 3.50 – – 4.28 6.75 3.05 2.55 6.74 3.50 4.23 3.76 4.30 5.26 6.36 7.80 4.95 3.75 8.40 – 5.36 3.75 2.88 3.60 – 9.96 8.40 7.81 2.75 – 4.88 – 7.57 4.59 -4.89%
8.38 7.00 9.68 6.60 6.00 7.50 9.83 4.75 8.74 6.50 – 7.20 9.00 9.26 9.60 5.75 10.10 7.50 9.50 – 8.38 6.25 9.00 8.50 8.64 – 7.45 14.50 9.00 7.72 11.80 4.55 4.80 7.49 13.77 10.55 6.76 14.25 9.59 7.50 12.84 10.80 9.71 8.00 8.64 11.04 11.76 21.96 – 11.23 6.00 6.00 9.05 13.26 11.71 9.13 -0.82%
7.57 – – 6.60 16.00 7.50 – – 9.00 9.50 – 8.55 10.00 – – 7.20 11.80 8.00 9.50 – 9.56 – – 12.00 12.51 – 10.63 15.25 – 10.00 – 4.60 4.80 7.49 15.00 15.00 11.28 13.85 9.52 12.00 – – 8.55 10.00 – 12.60 16.92 21.96 13.92 12.27 15.00 7.68 10.49 – 11.16 10.93 0.45%
COLLIERS INTERNATIONAL
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CANADA
INDUSTRIAL SURVEY AND RENTS
INDUSTRIAL SURVEY MARKET
EXISTING INVENTORY (SF) JUNE 30, 2009
NEW CONSTRUCTION Q2 2009 (SF)
NEW CONSTRUCTION YTD 2009 (SF)
117,500,000 76,000,000 7,045,000 338,172,000 27,919,000 14,908,000 18,900,000 720,022,000 174,005,000 60,984,000 1,555,454,000
203,000 0 0 450,000 0 53,000 200,000 994,000 1,976,000 38,000 3,915,000
1,030,000 0 10,000 516,000 0 53,000 400,000 5,250,000 2,808,000 141,000 10,208,000
ABSORPTION 2Q 2009 (SF)
ABSORPTION YTD 2009 (SF)
VACANCY RATE MARCH 31, 2009 (%)
VACANCY RATE JUNE 30, 2009 (%)
(362,000) (1,963,000) 8,000 1,419,000 69,000 175,000 (105,000) (623,000) 76,000 (192,000) (1,497,000)
250,000 (1,737,000) (15,000) 422,000 207,000 (55,000) 167,000 (4,230,000) 535,000 (575,000) (5,029,000)
4.5 3.4 7.2 7.1 3.8 2.3 2.0 6.4 2.7 5.7 5.70
5.1 4.2 7.1 6.8 4.4 1.4 3.6 6.4 3.8 6.1 5.88
Calgary, AB Edmonton, AB Halifax, NS Montreal, QC Ottawa, ON Regina, SK Saskatoon, SK Toronto Vancouver, BC Waterloo Region CANADA TOTAL/AVERAGE
CURRENTLY UNDER CONSTRUCTION (SF) 300,000 963,000 25,000 208,000 209,000 21,000 100,000 3,401,000 2,024,000 110,000 7,360,000
INDUSTRIAL SURVEY MARKET Calgary, AB Edmonton, AB Halifax, NS Montreal, QC Ottawa, ON Regina, SK Saskatoon, SK Toronto Vancouver, BC Waterloo Region CANADA TOTAL/AVERAGE
INDUSTRIAL SURVEY | LAND PRICE, SALES PRICE AND CAP RATE AS OF JUNE 2009 MARKET
LAND PRICE (C$ PSF)
SALES PRICE (C$ PSF)
CAP RATE %
11.82 12.66 5.75 11.00 9.00 6.08 8.00 13.50 25.25 7.41 11.05
105.00 128.00 – – 87.00 66.00 100.00 64.50 100.00 83.00 91.69
7.25 7.60 – – 8.88 8.85 8.50 7.00 7.00 7.50 7.82
Calgary, AB Edmonton, AB Halifax, NS Montreal, QC Ottawa, ON Regina, SK Saskatoon, SK Toronto Vancouver, BC Waterloo Region CANADA AVERAGE
VACANCY FORECAST ABSORPTION FORECAST RENT FORECAST (3 MONTHS) (3 MONTHS) (3 MONTHS) Same Up Same Same Same Same Up Up Up Up
Up Down Same Same Up Up Same Down Down Down
Same Down Same Same Same Same Same Down Down Down
INDUSTRIAL SURVEY | RENTS AS OF JUNE 2009 MARKET
WAREHOUSE/DISTRIBUTION SPACE (C$ PSF)
Calgary, AB Edmonton, AB Halifax, NS Montreal, QC Ottawa, ON Regina, SK Saskatoon, SK Toronto Vancouver, BC Waterloo Region CANADA AVERAGE Quarterly Change
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COLLIERS INTERNATIONAL
7.00 7.40 6.75 4.50 7.00 8.00 8.50 5.50 7.00 5.13 6.68 -2.94%
BULK SPACE (C$ PSF)
FLEX/SERVICE SPACE (C$ PSF)
TECH/R&D SPACE (C$ PSF)
6.50 6.50 5.00 4.00 6.88 6.50 7.50 5.04 6.50 5.13 5.96 -3.22%
9.25 8.15 8.95 6.50 8.50 12.00 9.00 7.91 8.50 8.65 8.74 -0.60%
10.00 9.00 13.95 8.00 10.00 14.00 13.00 8.57 9.50 8.65 10.47 -1.99%
UNITED STATES OF AMERICA
MARKET Pleasanton/Walnut Creek, CA Reno, NV Los Angeles - Inland Empire, CA Las Vegas, NV Stockton/San Joaquin County, CA Jacksonville, FL Boise, ID Columbia, SC Orlando, FL Baltimore, MD San Francisco Peninsula - San Mateo, CA Raleigh, NC West Palm Beach, FL Ft. Lauderdale-Broward, FL Phoenix, AZ San Jose/Silicon Valley, CA Miami, FL Cincinnati, OH Charleston, SC Tampa Bay, FL Chicago, IL Columbus, OH Washington, DC Nashville, TN San Diego, CA Dallas-Ft. Worth, TX USA AVERAGE New Jersey - Central Denver, CO Los Angeles, CA Bakersfield, CA Kansas City, MO Sacramento, CA Orange County, CA Portland, OR Honolulu, HI Charlotte, NC Atlanta, GA Houston, TX Fairfield, CA Minneapolis, MN Oakland, CA New Jersey - Northern Greenville, SC Fresno, CA Philadelphia, PA Detroit, MI Louisville, KY Milwaukee, WI Seattle/Puget Sound, WA Cleveland, OH Memphis, TN Hartford, CT St. Louis, MO Indianapolis, IN Little Rock, AR
VACANCY RATE JUNE 30, 2008 (%) 9.2 10.1 9.9 8.5 11.8 7.0 6.5 2.9 8.5 18.1 5.1 18.1 8.4 6.2 13.9 10.0 6.3 6.8 7.1 6.9 9.4 9.7 10.4 6.2 8.5 9.5 8.44 7.8 7.1 3.3 5.4 6.4 10.2 4.3 6.9 4.0 7.2 11.8 5.9 10.2 11.2 7.6 6.5 9.9 6.0 8.6 13.1 7.6 7.5 6.1 7.7 13.9 9.9 6.9 8.1 15.2
INDUSTRIAL SURVEY
VACANCY RATE JUNE 30, 2009 (%) 14.7 15.3 15.1 13.5 16.7 11.7 11.2 7.5 12.5 21.6 8.5 21.5 11.8 9.4 17.0 12.8 9.1 9.5 9.6 9.3 11.7 12.0 12.4 8.2 10.4 11.2 10.16 9.5 8.7 4.8 6.8 7.8 11.5 5.6 8.2 5.1 8.3 12.9 6.9 11.2 12.1 8.5 7.5 10.8 6.9 9.4 13.9 8.3 8.1 6.3 7.8 13.9 9.4 6.3 7.0 13.0
VACANCY RATES
Industrial Market Contracts Sharply During Q2 CHANGE 5.47 5.14 5.14 5.00 4.86 4.69 4.64 4.63 4.00 3.53 3.43 3.41 3.41 3.17 3.09 2.87 2.83 2.76 2.56 2.36 2.30 2.26 2.02 1.98 1.91 1.78 1.71 1.65 1.62 1.50 1.44 1.40 1.33 1.24 1.23 1.16 1.08 1.06 1.05 1.00 0.96 0.96 0.94 0.90 0.90 0.84 0.81 0.69 0.61 0.19 0.15 (0.03) (0.52) (0.55) (1.04) (2.19)
Continued from page 1
153.5 MSF under construction at the end of the third quarter of 2007 and below levels last seen in early 2003. U.S. industrial vacancy rate again goes higher. The industrial warehouse vacancy rate increased by 63 basis points during the second quarter to register double-digit vacancies at 10.16%. This brought the national vacancy rate back to levels recorded during the second quarter of 2004 and up 122 basis points from the beginning of the year. Out of the 55 markets tracked across the country, 48 saw vacancies increase while seven registered declines. Canadian warehouse vacancies also increased during the quarter, jumping by 18 basis points to 5.88%, a level not seen since 1997. Rents drop 3.5% during the quarter. For the third consecutive quarter warehouse rents posted a substantial decrease, with average asking rents down 3.5% to $5.27 per square foot. With this latest decrease, U.S. warehouse rents are down 9.0% over the last nine months. Reflecting the widespread nature of the downturn, 47 of the 56 markets surveyed by Colliers showed a drop in average warehouse rents during Q2. Canadian warehouse rents also decreased, falling 2.9% during the quarter to $6.68 per square foot. GLOSSARY Absorption – Net change in leased space over a given period of time. Bulk Space – 100,000 square feet or more with up to 10 percent office space, the balance being general warehouse space with 20 to 36 foot ceiling heights. All loading is dock-height. Flex Space – Single-story buildings having 10- to 18-foot ceilings with both floor-height and dock-height loading. Includes wide variation in office space utilization, ranging from retail and personal service through distribution, light industrial and occasional heavy industrial use. Inventory – Includes all existing multi or single tenant leased and owner-occupied industrial warehouse, light manufacturing, flex and R&D properties greater than or equal to 10,000 square feet. New Construction – Includes completed speculative and build-tosuit construction. New construction quoted on a net basis after any demolitions or conversions. Service Space – Single story (or mezzanine) with 10- to 16-foot ceilings with frontage treatment on one side and dock-height loading or grade level roll-up doors on the other. Less than 15% office. Tech/R&D – One- and two- story, 10- to 15-foot ceiling heights with up to 50% office/dry lab space (remainder in wet lab, workshop, storage and other support), with dock-height and floor-height loading. Triple Net Rent – Includes rent payable to the landlord and does not include additional expenses such as taxes, insurance, maintenance, janitorial and utilities. All industrial and high-tech/R&D rents in this report are quoted on an annual, triple net per square foot basis in U.S. dollars. Vacancy Rate – Percentage of total inventory available (both vacant and occupied) as at the survey date including direct vacant and sublease space. Warehouse – 50,000 square feet or more with up to 15 percent office space, the balance being general warehouse space with 18 to 30 foot ceiling heights. All loading is dock-height.
The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional advisors prior to acting on any of the material contained in this report.
COLLIERS INTERNATIONAL
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COLLIERS INTERNATIONAL
HIGHLIGHTS · NORTH AMERICA
Colliers International is an affiliation of leading real estate firms committed to delivering consistently superior commercial real estate services, wherever and whenever needed.
INDUSTRIAL · SECOND QUARTER 2009
$1.6 Billion (€1.1 Billion) in Global Revenue 1. 1 Billion SF (102 Million SM) Under Management 12,700 Employees
COLLIERS INTERNATIONAL LOCATIONS | 294 OFFICES IN 61 COUNTRIES
NORTH AND CENTRAL AMERICA Canada Costa Rica Mexico United States of America
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Russia Serbia Slovakia Spain Sweden Switzerland Turkey Ukraine United Kingdom
MIDDLE EAST Israel Qatar Saudi Arabia United Arab Emirates New Zealand
SOUTH AMERICA Argentina Brazil Chile Colombia Peru
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ASIA
AFRICA South Africa
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