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INDUSTRIAL. 2010 Recap Third consecutive year of negative absorption Warehouse/distribution vacancy stabilized Construction remained nonexistant.

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2010 recap third consecutive year of negative absorption

INDUSTRIAL

  • 2010 Recap

  • Third consecutive year of negative absorption

  • Warehouse/distribution vacancy stabilized

  • Construction remained nonexistant


2010 recap third consecutive year of negative absorption

IndustrialEd Brown, CCIM, SIORNAI Carolantic Realty2011 Triangle NC-CCIM Commercial Real Estate Market ForecastNetworking. Education. Technology.


Triangle industrial overview
TRIANGLE INDUSTRIAL OVERVIEW

Ed Brown, SIOR, CCIM

NAI Carolantic Realty

March 16, 2011

  • LOOK BACK

  • TODAY

  • PREDICITIONS



Absorption
ABSORPTION

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

4Q 4Q 4Q 4Q 4Q 4Q 4Q 4Q 4Q 4Q



Advertised rental rates
ADVERTISED RENTAL RATES

Annualized

200020052010Increase

900 Aviation Pkwy (30’) $3.75 $3.50 $4.00 0.67%

Edinburgh Place (30’) $4.10 $4.10 $5.25 2.8%

Bedford Place (30’) $4.50 $3.75 $5.25 1.7%

Tri-Center SouthVIII (30’) $4.25 $4.25 $4.95 1.6%

Tri-Center South II (24’) $3.90 $3.75 $4.75 2.2%

Keystone A (24’) $4.15 $3.50 $4.50 0.8%

Walnut Creek III (24’) N/A $4.55 $4.95 2.0%

Greenfield 800 (30’) N/A $4.25 $4.95 3.3%

1.88%

AVERAGE


Triangle industrial overview1
TRIANGLE INDUSTRIAL OVERVIEW

  • LOOK BACK

  • TODAY

  • PREDICITIONS

Ed Brown, SIOR, CCIM

NAI Carolantic Realty

March 16, 2011


Total vacancy size
TOTAL VACANCY & SIZE

DESCRIPTION%VACANTSIZE/VACANT

Total Direct 20.8% 25.3m / 5.2 m

Total w/o Durham Tobacco 17.7% 24.1m / 4.3 m

Direct & Sublease 24.1% 25.3m / 6.1 m


Submarket vacancy size
SUBMARKET VACANCY & SIZE

DESCRIPTION%VACANTSIZE/VACANT

Largest Submarket – RTP 9.3% 10.3m / 960k

2nd Largest Submarket – East Wake 24.6% 5.2m / 1.2m

3rd Largest Submarket –

North Raleigh/US1 34.1% 3.9m / 1.3m


2010 recap third consecutive year of negative absorption

Lower Costs / Trade Up

MOVE OUT OFMOVE IN TO

Beavex $6.95/sf Flex to $4.50/sf Warehouse

31,000SF

Eaton $6.95/sf Flex to $4.50/sf Warehouse

42,000SF

Coca-Cola 1950’s Facility to Modern 30’ Clear

250,000SF

Document Storage Old 18’ Clear to Modern 30’ Clear

100,000SF

Equipment Rental $7.50/sf Flex to $3.75/sf Warehouse

40,000sf



Negative asorption 2011
NEGATIVE ASORPTION 2011

Keystone 88,000sf

Two tenants downsize

Imperial Center 40,000sf Closes

180,000sf New Sublease

Tri-Center South 85,000sf Sublease goes direct

32,000sf move to Creedmoor

Tri-Center North 170,000sf direct to shadow space

Weck Drive 168,000sf recycler downsizes

2100 Harrod 89,000sf moves out

681,000sf


Building sales comps
BUILDING SALES COMPS

AddressSize$/SF Date

8605 Ebenezer Church

Raleigh, NC 81,600sf $45.95/sf 05/25/10

323 Park Knoll

Durham, NC 128,000sf $43.61/sf 12/22/10

4400 Emperor Blvd.

Durham, NC 182,165sf $41.03/sf 07/01/10


Industrial land comps
INDUSTRIAL LAND COMPS

AddressSizeUsePriceDate

100 Laurensfield Ct. 8.924 Truck $2.31/sf

Garner, NC acres+/1 Maintenance $100,600/acre 7/29/10

2800 Spring Forest 4.80 $3.94/sf

Raleigh, NC acres+/- Mini-Storage $171,600/acre 7/28/10

860 E. Garner 4.95 Martin $2.78/sf

Garner, NC acres+/- Marietta $121,100/acre 4/1/10

S. New Hope Rd 10.08 Public Service $4.78/sf

& Global St, Raleigh, NC acres+/- Gas $206,900/acre 4/1/10

Northeast Food 8.00 Manufacturing $29,000/acre 6/1/10

Clayton, NC acres


Construction costs increase
CONSTRUCTION COSTSINCREASE

  • Steel has increased 16% this year

  • Concrete to increase $5/yard in April

  • Fuel increase effects asphalt /rubber roof/

    PVC Pipe / Transportation

  • Grading industry is out of business. When the market comes back, a few grading contractors will control the prices charged.

  • $55/sf to build a 60,000sf concrete building.


Lease comps
LEASE COMPS

TYPERATE

24’ – 30’ Clear $3.75 - $4.50/sf

100% HVAC

ESFR

Lower Ceilings $2.95 - $3.75/sf

Older

Outside Wake As low as

and Durham Counties $1.75/sf


2010 recap third consecutive year of negative absorption

AFFORDABLE OPTIONS

LOCATIONTYPERATE/PRICE

North Raleigh 148,000sf (30’ clear) $3.75/sf lease

Inside the Beltline 56,000sf (rail served) $3.25/sf lease

RTP 170,000sf (20’ clear) $3.25/sf lease

Knightdale 120,000sf (21’ clear) $2.95/sf lease

Clayton 490,000sf (30’ clear) $3.25/sf lease

Clayton Industrial Land $29,000 to $65,000/AC

Creedmoor 150,000sf (100% HVAC) $1.75/sf lease

Butner 42,000sf (Manufacturing) $18.00/sf purchase

Butner Industrial Land $19,000/AC


Triangle industrial overview2
TRIANGLE INDUSTRIAL OVERVIEW

Ed Brown, SIOR, CCIM

NAI Carolantic Realty

March 16, 2011

  • LOOK BACK

  • TODAY

  • PREDICITIONS


Industrial predictions
INDUSTRIAL PREDICTIONS

201120122013

Absorption Negative Positive Positive

Vacancy Up Down Down

Rates Stable Stable Up

Spec Construction None None Yes

Land Value Down Stable Up

Construction Costs Up Up Up

Job Growth Good Better Best


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SUPPORT TBJ SPACE QUARTERLY

  • The information TBJ provides helps us all make better decisions.

  • Most of the information in this overview came from TBJ SPACE.