Posts tagged industrial
The Industrial Sector in Central Ohio continues to be on a good path again this quarter. Vacancy rates are continually declining to almost record levels, 7.1%. With fewer spaces on the market, rental rates are on the rise. Developers are paying attention and speculative buildings are coming out of the ground.
The 3rd quarter has brought a strong mix of owner/user and investment sales. Loeb Electric, a Columbus-founded electrical company, has made a move from Grandview to the east side. Loeb Electric is reportedly selling its Grandview warehouses at 915 Williams and 906 Burr Ave to Grandview Yard developer Nationwide Realty Investors. The electrical contractor purchased a 264,000/SF facility at 1800 E Fifth Avenue. The new location at 1800 E Fifth Ave was the former Design Center building at East Fifth and Leonard Avenues in Columbus. (more…)
Class A office rents are on the rise, resulting in several speculative buildings. 250 S High Street will bring 160,000 SF of new Class A office to the downtown market, the first new project near the Square since Fifth Third Center in 1991. Other hot markets – Polaris, Grandview & New Albany boast both speculative and build-to-suit construction. The leading developer in the office sector is Daimler, who is heading up 4 of the 5 current projects. In other news, Ohio University is planning a 120,000 SF Oncology Hospital in Dublin at Post & 33 to be completed by Fall 2014.
Build to suit activity is driving the industrial real estate market. Multiple developers have projects under way, from Duke’s 500,000 SF for Ace Hardware in London to Exxcel’s CenterPoint IV for Avnet. Vacancy rates continue to decline to an overall rate of just above 7%. Large blocks of space are scarce. Although asking lease rates remain flat, actual rates are approaching an all time market high. With rates on the rise, can speculative construction be far behind?
Commercial Real Estate appears to me minimally impacted by the recent Government shutdown. The biggest impact is in Multi Unit Housing sales. The FHA will be approving no new commitments for multi-family financing during the shutdown period. Despite a brief period of uncertainty within the market and with interest rates, the commercial real estate industry appears mostly unaffected, although it could simply still be too early to see any fallout.
With $17.3 billion in commercial mortgages coming due in 2012, landlords are more motivated than ever to incentivize tenants to renew their existing leases. Landlords are trying to stabilize their buildings and refinance. To do so, they must show a strong rent roll to the bank.
Some incentives such as free rent, reduced rent (blend and extend), upgraded lighting and dock doors have become common concessions offered by landlords to tenants who renew. It’s easier and safer for landlords to provide these concessions and keep their current tenants than try to re-fill the space. (more…)