Industrial Market Snapshot St. Louis • Second Quarter • 2013
Market Tracker *Arrows = Current Qtr Trend
Vacancy
Net Absorption
Deliveries
Effective Rent
8.2%
639,164 SF
0 SF
$4.07 NNN
Another Quarter of Strong Growth for the Industrial Market Following a strong first quarter, the industrial market realized additional occupancy growth in the second quarter of 2013. A total of 639,000 square feet of positive absorption was realized in the quarter as the vacancy rate held at 8.2%. The growth for the industrial sector marks the fourth consecutive quarter of positive absorption with over 2,100,000 square feet absorbed over that time.
ST. LOUIS INDUSTRIAL
Economic Indicators Q2 12
Q2 13
St. Louis Employment
1310.4
1319.8
St. Louis Unemployment
7.30%
7.00%
65.4
81.4
8.20%
7.60%
U.S. CCI U.S. Unemployment
Net Absorption 1.5
Square Feet (Millions)
1 .5 0 -.5 -1
-1.5 -2
2008
2009
2010
2011
2012
2013
Vacancy Rate
The 639,000 square feet of positive absorption included 479,000 square feet of newly constructed space at the Westway I building in Edwardsville. Contegra Construction Company doubled the distribution center for Procter & Gamble, which expanded into the new space. This expansion represented the only new construction brought to market in the second quarter. GM announced that they will continue to expand in Wentzville with the addition of a 114,000 square foot stamping plant. The stamping plant will be constructed at the same location where they are building a 500,000 square foot body shop. Construction on the stamping plant will begin in July 2013 and GM expects the press to be operational by early 2015. Modern Bulk continued to perform well in the second quarter, realizing 719,000 square feet of positive absorption, though this was partially driven by the build-to-suit for Procter & Gamble at Westway I. Other significant transactions in the modern bulk space in the quarter included TAGG Logistics relocating and expanding from 147,000 square feet of office and bulk warehouse space in Maryland Heights to 203,000 square feet of modern bulk space at Hazelwood Logistics Center I and Cord Moving and Storage swapping 55,000 square feet of bulk warehouse space at Earth City Industrial Center 3 for 55,000 square feet of modern bulk space on Rider Trail in Earth City. Service centers, bulk warehouses, and office warehouses all took a step back in the second quarter, losing 62,000 square feet, 72,000 square feet, and 127,000 square feet, respectively. Geographically, occupancy growth was realized in the Metro East, South County, St. Charles County, and North County, while losses were experienced in the City, MidCounty, and West County. The Metro East had the strongest performance of any of the St. Louis area markets with 510,000 square feet of absorption, primarily driven by the Procter & Gamble expansion. North County realized 296,000 square feet of positive absorption in the quarter, which was primarily driven by the previously discussed move by TAGG Logistics. St. Charles County realized 207,000 square feet of absorption, which was partially the result of ALMO Distribution occupying 129,000 square feet of modern bulk space at Fountain Lakes II. The worst performing market in the quarter was the City, which realized 215,000 square feet of negative absorption, which pushed the vacancy rate to 8.4%. This loss was largely driven by Sigma Aldrich vacating 127,000 square feet at St. Louis Commerce Center II and LaBarge Properties vacating 103,000 square feet of space at 3400 Morganford Rd. The City and Mid-County are the only two markets which have not improved since the significant losses experienced in the industrial market in 2009.
10% 9% 8% 7% 6% 5% 2008
2009
2010
2011
2012
2013
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Cassidy Turley Industrial Market Snapshot St. Louis, Missouri • Second Quarter • 2013 SUBMARKET City
TOTAL BLDGS
INVENTORY
SUBLET VACANT
DIRECT VACANT
VACANCY RATE
CURRENT NET ABSORPTION
YTD NET ABSORPTION
UNDER CONSTRUCTION
1,574
66,500,462
224,192
5,371,959
8.4%
(215,408)
(344,696)
-
Metro East
288
27,288,023
-
1,304,493
4.8%
510,451
545,338
-
Mid-County
732
24,856,752
43,656
2,168,148
8.9%
(105,785)
(121,063)
-
North County
588
47,087,727
84,224
5,044,327
10.9%
295,568
516,586
227,500
South County
559
20,423,678
164,500
1,658,383
8.9%
110,597
235,729
-
St. Charles County
559
26,006,255
20,000
1,039,958
4.1%
206,708
223,282
140,870
West County
600
22,753,172
27,500
2,011,943
9.0%
(162,967)
58,316
-
Modern Bulk
86
30,685,101
153,845
3,271,595
11.2%
719,131
744,262
227,500
Traditional Bulk
267
34,293,586
205,925
4,540,058
13.8%
(71,575)
78,271
140,870
By Property Type
Office/Warehouse
3,610
99,405,220
157,952
6,513,152
6.7%
(127,079)
240,898
Manufacturing
511
55,057,999
26,350
2,787,970
5.1%
124,694
124,367
Service Centers
319
12,806,105
20,000
1,387,330
11.0%
(62,145)
(129,318)
Other ST. LOUIS TOTAL
107
2,668,058
-
99,106
3.7%
56,138
54,648
4,900
234,916,069
564,072
18,599,211
8.2%
639,164
1,113,492
-
368,370
Key Lease Transactions 2Q 13 PROPERTY
SF
TENANT
TRANSACTION TYPE
SUBMARKET
1,262,648
Conopco Inc. (UniLever)
Renewal
Edwardsville
372 Hazelwood Logistics Center Dr.
202,613
TAGG Logistics
New
Hazelwood
5415-5463 Phantom Dr.
126,642
USPS
Renewal
Hazelwood
5620 Inner Park Dr.
12949-12955 Enterprise Way
88,425
Store Supply
New
Hazelwood
160-184 Corporate Woods Ct.
63,728
Keystone Automotive
Renewal
Earth City
2392 Grissom Dr.
61,293
Mary Elle Fashions d/b/a Meridian
Renewal & Expansion
West Port
4238-4240 N. Rider Trail, Ste
55,049
Cord Moving & Storage
New
Earth City
Industrial Submarkets St. Louis, Missouri
2
70
64
270
1 270
4
6
170
5
3 44
7
255 55
Key Sales Transactions 2Q 13 PROPERTY
SF
BUYER
SELLER
SUBMARKET
202,352
Modineer Co.
Wainwright Properties Ltd
St. Charles County
9711-9719 Green Park Ind
80,000
Burdrovich Real Estate
WestCore/DRA
Kirkwood South
183-189 McDonnell Blvd.
70,703
WJL Services
Trustco, LLC
Hazelwood
5202-5240 S. Thirty-eighth
57,055
Hayes Dev LLC
Bill Austin
City South
4500 Swan Ave.
51,500
JGDD SWAN LLC
SSLJ LLC
City South
17 Cermak Blvd.
55
1. 2. 3. 4.
St. Charles County North County West County Mid County
5. St. Louis City 6. Metro East 7. South County
Tim Walsh
About Cassidy Turley
Managing Principal
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7700 Forsyth Boulevard 9th Floor St. Louis, Missouri 63105 Tel: 314.746.0326 Fax: 314.862.1648 Email: tim.walsh@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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