Industrial Market Snapshot St. Louis, Missouri • First Quarter • 2013
Market Tracker *Arrows = Current Qtr Trend
Vacancy
Net Absorption
Deliveries
Effective Rent
8.4%
474,328 SF
457,177 SF
$4.03 NNN
Industrial Market Continues to Show Strength The St. Louis industrial market posted another strong quarter with 474,000 square feet of positive absorption. This marks the third quarter of positive absorption in excess of 400,000 square feet and has brought the vacancy rate down by another tenth of a point to 8.4%.
ST. LOUIS INDUSTRIAL
Economic Indicators Q1 12
Q1 13
St. Louis Employment
1279.6
1286.5
St. Louis Unemployment
8.70%
8.10%
U.S. CCI
67.53
62.05
U.S. Unemployment
8.30%
7.80%
Net Absorption
Square Feet (Millions)
1 .5 0
The growth in the industrial market continues to be widespread. As was true for the entire 2012 year, Service Centers was the only building type to experience meaningful occupancy losses in the first quarter of 2013. Overall, the sector lost 67,000 square feet of occupied space. The manufacturing sector remained in neutral for the quarter while bulk warehouse and office/warehouse space continued to see steady growth. The office/warehouse sector, which generally consists of smaller buildings with lower ceiling heights, saw the biggest growth during the year. The smaller tenants that typically occupy this type of space brought a total of 368,000 square feet of growth to the region during the first quarter. Geographically, occupancy growth was realized in every market except for the City and Mid-County which realized a combined loss of 144,000 square feet. The most significant tenant loss in these two markets was Monsanto which vacated 165,000 square feet of space on Warson Rd. The Mid-County market lost another tenant when Fresh Warehousing relocated to the Fenton submarket, vacating 64,000 square feet of space on Kingsland Avenue. North County and West County saw the most significant occupancy growth during the quarter. Lyon’s Blow Molding was the largest expansion in these two markets, entering into a 110,000 square foot traditional bulk building on Seeger Industrial Drive in the Hazelwood submarket. This growth was partially offset by Fed-Ex’s 48,000 square foot vacancy but overall the market was able to record over 220,000 square feet of growth for the quarter. The growth experienced in West County was primarily the result of a large number of smaller office/warehouse users entering into the market. In the South County market, Fenton Properties II brought 42,000 square feet of growth after occupying its newly acquired building at 1587 Larkin Williams Drive.
-.5 -1
-1.5 -2
2008
2009
2010
2011
2012
2013
Vacancy Rate
Outside of the expansions currently underway, there are other signs that suggest the industrial market can expect growth during the year. Manufacturing employment, which is strongly correlated to the expansion of the Industrial market, is on the rise with steady employment gains occurring in St. Louis during the past 10 months. The ISM index, which is a measure of manufacturing conditions in the United States, slowed during the second half of 2012 but has since picked up with four consecutive months of growth. All of this portends additional growth in the industrial markets which will drive continued improvement in vacancy and leasing rates through the remainder of the year.
10% 9% 8% 7% 6% 5% 2008
Construction activity has ramped up over the last couple of quarters. After the expansion of the Westway I building started during the fourth quarter of 2012, another build-to-suit broke ground during the first quarter of 2013. At Aviator Business Park, the former site of the Ford manufacturing facility, a 227,500 square foot facility is being built for International Food Products Corp. which will consolidate its space from two existing locations. Another 30,870 square foot facility is being built in St. Charles. The build-to-suit will house Component Bar Products which is expanding in the market.
2009
2010
2011
2012
2013
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Cassidy Turley Industrial Market Snapshot St. Louis, Missouri • First Quarter • 2013 SUBMARKET City
TOTAL BLDGS
INVENTORY
SUBLET VACANT
DIRECT VACANT
VACANCY RATE
CURRENT NET ABSORPTION
YTD NET ABSORPTION
UNDER CONSTRUCTION
1,575
66,508,911
188,247
5,213,549
8.1%
(129,288)
(129,288)
-
Metro East
288
27,288,023
-
1,814,994
6.7%
34,887
34,887
-
Mid-County
732
24,856,752
70,756
2,035,263
8.5%
(15,278)
(15,278)
479,220
North County
587
47,003,084
84,224
5,289,606
11.4%
221,018
221,018
227,500
South County
559
20,419,478
168,762
1,764,718
9.5%
125,132
125,132
-
St. Charles County
559
26,006,255
20,000
1,246,666
4.9%
16,574
16,574
30,870
West County
600
22,727,984
9,674
1,866,818
8.3%
221,283
221,283
-
Modern Bulk
86
30,685,101
117,900
4,027,110
13.5%
25,495
25,495
706,720
Traditional Bulk
267
34,290,162
205,925
4,489,536
13.7%
149,846
149,846
30,870
By Property Type
Office/Warehouse
3,611
99,402,165
165,988
6,367,309
6.6%
367,977
367,977
Manufacturing
511
55,017,999
51,850
2,847,164
5.3%
(327)
(327)
Service Centers
319
12,780,917
-
1,345,201
10.5%
(67,179)
(67,179)
Other ST. LOUIS TOTAL
106
2,634,143
-
155,244
5.9%
(1,490)
(1,490)
4,900
234,810,487
541,663
19,231,614
8.4%
474,328
474,328
-
737,590
Key Lease Transactions 1Q 13 PROPERTY
SF
TENANT
TRANSACTION TYPE
SUBMARKET
121 Fountain Lakes Industrial Blvd.
128,740
ALMO Distribution
New
St. Charles County
21-31 Commerce Dr.
101,341
True Manufacturing Co Inc
New
St. Charles County
88,425
Store Supply
New
Hazelwood
12949-12955 Enterprise Way 30880 San Clemente St.
81,282
Rexel Holdings USA
Renewal
Out Of State
13145-13195 Lakefront Dr.
44,600
Particle Dynamics International
New
Earth City
157-165 Compass Point Ct.
41,780
Smart Karton
Renewal
St. Charles County
126 Enterprise Dr.
37,920
Shaw Industries
Renewal
St. Charles County
4331 Robards Ln.
32,595
Rexel Holdings USA
Renewal
Out Of State
Key Sales Transactions 1Q 13 PROPERTY
SF
BUYER
SELLER
SUBMARKET
1910-1920 Belt Way Dr.
70,000
Aerial Premium Supply
JER Partners
University City
4101-4115 Geraldine Ave.
40,623
The Midwest's Best Produce Co.
C. Hammersmith et al, a General Partnership
City North
2647 Rock Hill Industrial
27,648
JCW Investments, LLC
Commerce Bank - St. Louis
Hanley Indust.
Industrial Submarkets St. Louis, Missouri
2
70
64
270
1 270
4
6
170
5
3 44
1. 2. 3. 4.
St. Charles County North County West County Mid County
7
255 55
5. St. Louis City 6. Metro East 7. South County
Rob Reardon Director of Research
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55
7700 Forsyth Boulevard 9th Floor St. Louis, Missouri 63105 Tel: 314.862.7100 Fax: 314.862.1648 Email: robert.reardon@cassidyturley.com The information contained within this report is gathered from multiple sources considered to be reliable. The information may contain errors or omissions and is presented without any warranty or representations as to its accuracy. Copyright © 2013 Cassidy Turley. All rights reserved.
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