jll columbus industrial outlook: q3 2016

Industrial Outlook

Columbus | Q3 2016

Speculative modern bulk deliveries (m.s.f.)

Source: JLL Research

E-commerce companies establishing Columbus presence

Source: JLL Research. Columbus 2020

Trade, transportation, & manufacturing employment (000s)

Source: JLL Research, Bureau of Labor and Statistics

Investors and developers remain optimistic

Year to date, Columbus has produced nearly 5.0 million square feet of

absorption in the industrial sector and is on pace for another strong year.

Investors have taken note of this pace of absorption and have increased the

investment activity in the Class A modern bulk building segment. This has also

led to further speculative construction from developers. Columbus has seen

more than 1.5 million square feet of industrial space delivered, with another

560,000 square feet expected by the end of the year. With a number of tenants in

the market, Columbus is positioned to take on continued activity, particularly in

speculative developments.

Activity reinforces Columbus as e-commerce haven

Corporations continue to identify e-commerce as a prime focal point in the

industrial landscape in Columbus. Access to a majority of U.S. consumers and

major coastal ports has uniquely positioned Columbus to thrive in the e-

commerce market. Recently, Amazon opened its new 1,000,000-square-foot

fulfillment center in Obetz and its 855,000-square-foot distribution center in Etna.

Other major retailers such as, L-Brands and Abercrombie, compete in the

growing e-commerce space to better navigate the dynamic retail market. The e-

commerce activity in Columbus remains strong and is expected to continue

growing over the next several years.

Smarty City grant will expand industrial productivity

The Smart City grant will positively impact the industrial work force in Columbus.

By establishing intelligent transportation systems, skilled workers who did not

previously have practical access to major job centers will be able to tap into

budding markets. The Smart City grant will also implement transportation

practices such as driver assisted truck platooning along the Alum Creek

Corridor. This will decrease congestion and increase productivity, efficiency and

savings on fuel costs; which provides 3PL's with a substantial opportunity.

Columbus will see a more efficient labor force and transportation system in the

industrial sector by providing effective pioneering methods of transportation.

Investors are confident in speculative development

Industrial Insight

Columbus | Q3 2016

$3.70Average total asking rent

4,066,869Total under construction (s.f.)

2,589,117Quarterly completions (s.f.)

4,810,313YTD net absorption (s.f.)

6.3%Total vacancy

1,503,196Planned construction (s.f.)

2,611,062Quarterly net absorption (s.f.)

243,335,013Market Size(s.f.)

JLL | Columbus | Industrial Outlook | Q3 2016

240.3245.7

249.8 253.0256.9

265.7 266.8

220.0

240.0

260.0

280.0

2010 2011 2012 2013 2014 2015 YTD 2016

Company Industry Submarket Size (s.f.)

Amazon Retail, e-commerce Obetz, Etna 1,855,000

OnlineShoes.com Fashion, e-commerce Groveport 216,000

Dollar Shave Club Personal care, e-commerce Grove City 180,000

Bleckmann USA Fashion, e-commerce Johnstown 175,000

6.0%

6.4%

6.8%

7.2%

0.0

1.0

2.0

3.0

2014 2015 Projected 2016YE

Projected 2017YE

Speculative deliveries Total vacancy

Projects under construction by submarket (s.f.) Average total asking rent ($ p.s.f.)


Notable sales in 2016 Notable leases signed in the third quarter


Large block availabilities Net absorption & overall vacancy rate


Industrial property clock New construction deliveries (s.f.)

Source: JLL Research Source: JLL Research

$3.33

$3.42 $3.43

$3.52

$3.61

$3.70

$3.00

$3.30

$3.60

$3.90

2011 2012 2013 2014 2015 YTD 2016

1,183,000

2,096,000

5,660,000

2,818,0003,392,000

0

2,000,000

4,000,000

6,000,000

2012 2013 2014 2015 YTD 2016

Property Submarket Tenant Leased s.f.

5303-5305 Fisher Rd West Undisclosed 227,633

4150 Lockbourne Industrial Pkwy Southeast Terminal Warehouse 218,471

CreekSide XX Southeast Buckeye Diamond 127,414

Prologis Capital Park South 1 Southwest ODW Logistics 104,047

SouthPark VII Southwest The Shining Company 102,596

785 Frebis Ave SoutheastMarsh Building

Products66,000

0.0%

4.0%

8.0%

12.0%

0

2,500,000

5,000,000

7,500,000

10,000,000

2011 2012 2013 2014 2015 YTD 2016

Net absorption Total vacancyExisting Under Construction

Size range Class A Class B Class C Class A Class B

100-249 k.s.f. 7 13 8 0 0

250-499 k.s.f. 10 3 2 2 0

500-749 k.s.f. 2 2 2 1 0

Property Buyer Bldg s.f. $ p.s.f

SouthPark VIII Exeter Property Group 393,696 $31.35

SouthPark VII Exeter Property Group 393,232 $31.35

2652 Fisher Road Diamond Properties 391,000 $21.71

5920 Green Pointe Drive South Clarion Partners 354,000 $53.56

Alum Creek Distribution Center 1 Ares Capital Corporation 306,000 30.23

Delaware I Superior Beverage Group 304,255 25.96

Land

lord

leve

rage

Tenant leverage

Peaking

market

Falling

market

Bottoming

marketRising

market




Columbus Q3 ‘15

Columbus Q3 ‘14


1,400,000

942,869

600,000

264,000 200,000

0

400,000

800,000

1,200,000

1,600,000

PickawayCounty

Southeast East Licking County West

Columbus Q3 ‘16

Industrial Statistics

Columbus | Q3 2016


Inventory

(s.f.)

Quarterly

total net

absorption

(s.f.)

YTD

total net

absorption

(s.f.)

YTD

total net

absorption

(% of stock)

Total

vacancy

(%)

Total

availability

(%)

Average

total asking

rent

($ p.s.f.)

Quarterly

completions

(s.f.)

YTD

completions

(s.f.)

Under

construction

(s.f.)

Columbus Totals

Warehouse & Distribution 188,630,928 2,692,685 4,628,883 2.5% 6.6% 8.8% $3.69 2,444,064 3,825,337 1,966,869

Manufacturing 32,753,271 -81,623 181,430 0.6% 4.6% 6.8% $3.73 0 0 2,100,000

Total Industrial 221,384,199 2,611,062 4,810,313 2.2% 6.3% 8.5% $3.70 2,444,064 3,825,337 4,066,869

Flex / R&D 21,950,814 72,567 290,981 1.3% 4.8% 7.8% $5.91 100,000 100,000 72,000

CBD

Warehouse & Distribution 1,750,988 0 0 0.0% 0.0% 0.0% $4.25 0 0 0

Manufacturing 597,948 -43,790 -43,790 -7.3% 7.3% 9.2% $4.15 0 0 0

Total Industrial 2,348,936 -43,790 -43,790 -1.9% 1.9% 2.3% $4.15 0 0 0

Flex / R&D 349,453 0 3,355 1.0% 57.2% 57.2% $5.00 0 0 0

North

Warehouse & Distribution 12,572,097 320,010 375,890 3.0% 2.1% 6.0% $5.17 0 0 0

Manufacturing 1,075,041 0 0 0.0% 1.2% 1.2% $5.25 0 0 0

Total Industrial 13,647,138 320,010 375,890 2.8% 2.0% 5.6% $5.17 0 0 0

Flex / R&D 4,819,161 10,925 -54,911 -1.1% 4.7% 6.6% $7.42 0 0 0

East

Warehouse & Distribution 18,816,700 -225,542 -586 0.0% 1.9% 2.9% $4.65 0 0 600000

Manufacturing 2,966,879 0 17,000 0.6% 8.4% 15.1% $4.11 0 0 0

Total Industrial 21,783,579 -225,542 16,414 0.1% 2.7% 4.6% $4.41 0 0 600,000

Flex / R&D 4,051,335 23,160 136,426 3.4% 3.2% 6.4% $6.43 100,000 100,000 0

Southeast

Warehouse & Distribution 69,783,471 1,420,306 2,866,808 4.1% 10.4% 11.5% $3.63 1,449,064 2,830,337 842,869

Manufacturing 5,843,348 0 142,000 2.4% 5.6% 5.6% $3.00 0 0 100000

Total Industrial 75,626,819 1,420,306 3,008,808 4.0% 10.0% 11.0% $3.60 1,449,064 2,830,337 942,869

Flex / R&D 2,699,188 11,008 35,927 1.3% 1.6% 3.8% $5.39 0 0 0

Southwest

Warehouse & Distribution 17,953,327 236,082 95,022 0.5% 6.9% 10.4% $3.78 0 0 0

Manufacturing 901,369 4,390 91,331 10.1% 0.0% 6.2% $3.15 0 0 0

Total Industrial 18,854,696 240,472 186,353 1.0% 6.6% 10.2% $3.76 0 0 0

Flex / R&D 1,698,335 7,690 48,624 2.9% 2.8% 16.2% $5.61 0 0 0

West

Warehouse & Distribution 30,139,024 125,989 247,568 0.8% 4.5% 8.1% $3.33 140,000 140,000 200,000

Manufacturing 2,154,559 -33,723 -76,463 -3.5% 4.2% 4.2% $3.54 0 0 600,000

Total Industrial 32,293,583 92,266 171,105 0.5% 4.5% 7.9% $3.34 140,000 140,000 800,000

Flex / R&D 5,656,351 23,655 102,231 1.8% 4.0% 5.4% $5.55 0 0 72,000

Outlying

Warehouse & Distribution 37,615,321 815,840 1,044,181 2.8% 5.1% 7.7% $3.67 855,000 855,000 324000

Manufacturing 19,214,127 -8,500 51,352 0.3% 4.1% 6.4% $3.79 0 0 1400000

Total Industrial 56,829,448 807,340 1,095,533 1.9% 4.8% 7.3% $3.71 855,000 855,000 1,724,000

Flex / R&D 2,676,991 -3,871 19,329 0.7% 7.0% 9.3% $5.22 0 0 0

Industrial Development Report

Columbus | Q3 2016


This report analyzes all industrial developments under construction & new deliveries > 30,000 s.f.

Total leased at delivery (%) 67.3%

Total speculative at delivery (s.f.) 1,649,337

Total BTS at delivery (s.f.) 2,276,000

Total Owner-User at delivery (s.f.) -

Total # of properties delivered 8

Asking rental rate (low - high) $3.50 - $4.25

Top 5 projects delivered to date

Building RBA (s.f.) Delivery dateLeased at delivery

(%)

Amazon Fulfillment Center 1,000,000 Q3 2016 100%

Amazon Distribution Center 855,000 Q3 2016 100%

Duke Building 482 482,220 Q1 2016 53%

Exxcel CenterPoint Business Park 478,053 Q2 2016 0%

Groveport II 449,064 Q3 2016 0%

Total pre-leased (%) 74.3%

Total speculative under construction (s.f.) 891,000

Total BTS under construction (s.f.) 1,875,869

Total Owner-user under construction (s.f.) 700,000

Total # of properties UC 8

Asking rental rate (low - high) $3.50 - $3.50

Top 5 projects currently under construction

Building RBA (s.f.) Delivery date Pre-leased (%)

Sofidel Plant 1,400,000 Q2 2017 100%

Rogue Fitness 600,000 Q4 2016 100%

3219 Rohr Road 567,000 Q2 2017 0%

West-Ward Pharmaceuticals 275,869 Q2 2017 100%

8820 Smith's Mill Rd 264,000 Q2 2017 0%

Speculative

Speculative

BTS

Submarket

Under construction

3,466,869Under construction (s.f.)

Under construction in-depth

Upcoming deliveries by year (s.f., excludes YTD completions)

New deliveries

Completions in-depth

3,925,337Total delivered YTD (s.f.)

Historical deliveries (s.f.)

Construction typeOwnerSubmarket

Southeast

Southeast

Southeast

Licking County

Southeast

Northpoint

Exxcel Project Management

Duke Realty

Prologis

Duke Realty

Speculative

BTS

Licking County

Southeast

Southeast

East

Pickaway County

Speculative

BTS

Owner Construction type

Speculative

Pizzuti

Pizzuti

Vantrust

1047 Cleveland LLC

Pewamo Ltd

Owner-user

BTS

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

2011 2012 2013 2014 2015 YTD 2016

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

Under construction Under construction

2016 2017

BTS Owner-user Speculative

Industrial Sales Activity

Columbus | Q3 2016

This report analyzes all industrial sales > 10,000 / 30,000 s.f.

$153,368,768

22

$35

6.3%

88.3%

10.6%

1.1%

5-6.5% 0 1 $3,815,641

6.5-7.5% N/A 22 $101,219,248

Top 10 sales transactions past three quarters

$ p.s.f. Sale date

$54 Mar-16

$31 Feb-16

$31 Feb-16

$41 Feb-16

$47 Jul-16

$30 Jul-16

$22 Feb-16

$43 Apr-16

$26 Aug-16

$52 Feb-16

304,255

143,335

393,696

393,232

290,606

241,334

306,000

$12,350,000

$12,350,000

$12,040,000

$11,250,000

Seller company

Waxman Industries

Invesco Advisors

Invesco Advisors

Invesco Advisors

Prologis

Prologis

2235 Southwest Boulevard Alaska Permanent Fund (APFC) $7,509,691

2829-2843 Charter Street Dalfen $7,986,672

8133 Highfield Drive Superior Beverage Group LLC $7,900,000

Hackman Capital

Midwest Highfield Drive Industrial

Invesco Advisors

184,152

$9,250,000

652 Fisher Road Diamond Properties $8,488,223

4458 Alum Creek Drive Ares Capital Corporation

Garrison Investment Group 391,000

3655 Brookham Drive Alaska Permanent Fund (APFC)

8170 Dove Parkway Ares Capital Corporation

3357 Southpark Place Exeter Property Group

3423 Southpark Place Exeter Property Group

5920 Green Pointe Drive South Clarion Partners $18,961,297

Building address Buyer company Sales price $Size (s.f.)

354,000

Sales volume $ by submarket

Warehouse/Dist. sales volume as %

of total YTD

Flex/R&D sales volume as % of total

YTD

Cap rate range

Core Class A Ind.

Core Class A Flex

Manufacturing sales volume as % of

total YTD

Average Class A price p.s.f. YTD

At a glance

Total volume YTD

Number of transactions YTD

Average Class A cap rate YTD

Sales activity by building type

Transactions details

Number of partial interest

transactions

Top sellers (s.f.)Top buyers (s.f.)

Number of domestic buyers

Foreign capital $

Average partial interest acquired

Number of foreign buyers

Domestic Capital $

3,945,470 s.f.

356,631 s.f.248,826 s.f.

$135,433,768

$16,185,000$1,750,000

0 s.f.

1,000,000 s.f.

2,000,000 s.f.

3,000,000 s.f.

4,000,000 s.f.

5,000,000 s.f.

$0

$50,000,000

$100,000,000

$150,000,000

Warehouse / Distribution Flex/R&D Manufacturing

Sum of Price ($) Sum of RBA (SF)

17%

17%

17%13%

12%

8%

7%

5%

Exeter Property Group DalfenDiamond Properties Alaska Permanent Fund (APFC)Ares Capital Corporation Clarion PartnersSuperior Beverage Group LLC Olymbec Corporate GroupCenter Point Development Snyder Barker InvestmentsThe Robert Weiler Company

30%

17%

13%

12%

8%

7%

5%

Invesco Advisors Garrison Investment GroupHackman Capital PrologisWaxman Industries Midwest Highfield Drive IndustrialBall Corporation Abercrombie & FitchSheaf & Jentgen Companies Shie-Ming & Kai-Lun Hsu HwangLeaventon & Leaventon LLC

$57,660,400

$40,297,071

$33,111,297

$11,250,000

$9,300,000

$1,750,000

Southwest

West

Southeast

Fairfield County

Delaware County

East


Industrial Employment Update

Columbus | Q3 2016

4.9%U.S. unemployment

1.7%U.S. 12-month job growth

4.0%Columbus unemployment

2.1%Columbus 12-month job growth

4.8%Ohio unemployment

1.5%Ohio 12-month job growth

Industry employment stratification: Columbus

Employment vs. unemployment rate: Columbus

Job growth (12-month change): United States vs. Columbus

Job growth/loss by sector (12-month change): Columbus

Industrial employment trends (12-month change, 000s): Columbus

0%

3%

6%

9%

12%

780,000

840,000

900,000

960,000

1,020,000

1,080,000

2006 2008 2010 2012 2014 2016

Nonfarm employment

Unemployment

-4.0%

-2.0%

0.0%

2.0%

4.0%

2010 2011 2012 2013 2014 2015 2016

Columbus United States

-900

-400

600

700

1,900

1,900

2,300

4,000

4,000

7,900

Trade, Transportation & Utilities

Information

Manufacturing

Financial Activities

Mining, Logging & Construction

Other Services

Government

Professional & Business Services

Educational & Health Services

Leisure & Hospitality

Trade, Transportation & Utilities,

195,700 , 18%

Professional & Business Services,

184,500 , 17%

Government, 160,200 , 15%

Educational & Health Services, 153,800 , 14%

Leisure & Hospitality, 114,300 , 11%

Financial Activities, 81,100 , 8%

Manufacturing, 72,800 , 7%

Other Services, 43,500 , 4%

Mining, Logging & Construction, 39,500 , 4%

Information, 16,600 , 2%


-25.0

-15.0

-5.0

5.0

15.0

2010 2011 2012 2013 2014 2015 2016

Trade,Transportation & UtilitiesManufacturingOther ServicesMining, Logging & Construction

Industrial Submarket Map

Notable construction projects


Rickenbacker 567

Tenant: N/A

Square Feet: 567,000

Landlord: Vantrust

Estimated completion:

Q2 2017

Rogue Fitness

Tenant: Rogue Fitness


Landlord: Wagenbrenner


Q4 2016

West-Ward Pharmaceuticals

Tenant: West-Ward

Pharmaceuticals


Landlord: Pizzuti


Q2 2017

Sofidel Plant

Tenant: Sofidel Group

Square Feet: 1,400,000

Landlord: Pewamo Ltd


Q3 2017

8820 Smith’s Mill Rd

Tenant: N/A


Landlord: Prologis


Q3 2017

For more information, please contact:

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the firm provides management and real estate outsourcing services for a property portfolio of 3.4 billion square feet, or 316 million square meters, and

completed $118 billion in sales, acquisitions and finance transactions in 2014. Its investment management business, LaSalle Investment Management,

has $56.0 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For

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COPYRIGHT © JONES LANG LASALLE IP, INC. 2016

Andrew Batson

Vice President, Director of Research

Great Lakes Region

+1 216 937 4374

[email protected]

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Research Analyst

Great Lakes Region

+1 614 460 4417

[email protected]

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Great Lakes Region

+1 614 460 4444

[email protected]

http://www.jll.com/

jll columbus industrial outlook: q3 2016

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