2012 Global Market report - NAI Global

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Akron, Ohio Canton, Ohio Contact NAI Cummins Real Estate +1 330 535 2661 Metropolitan Area Economic Overview 2011 Population 2016 Estimated Population Employment Population Household Average Income Median Household Income Total Population Median Age 704,319 708,753 379,289 $65,167 $50,068 38 As a key location in northeastern Ohio, the Akron area has continued to weather the economic downturn. In 2011, increased activity for the industrial sector included Alcoa ($21 million expansion), German-based Rochling Automotive ($15 million), Diebold Inc. ($100 million new HQ), Involta LLC ($20 million), and Goodyear’s World HQ to be completed in 2013 ($160 million). The new 136 acre “Seasons Greene Eco-Industrial Park” in Hudson is the first of its kind in Ohio. Industrial park redevelopment is underway at the former 167 acre Twinsburg Chrysler Plant. The City of Green acquired funding for a 200 acre expansion of the Akron- Canton Airport Industrial Park. The medical community continues on a rapid expansion with Summa Hospital Systems ($17 million) and Akron General Medical ($32 million) both opening new locations in Green. On the southern extremes of the county, Timken has partnered with Stark State College ($9.6 million) for a renewable wind power facility. The University of Akron continues to be a solid partner for Akron’s development. Currently under construction are two new residence projects totaling $47 million. Downtown, Akron is continuing with its development of the Biomedical Corridor, including the construction of Austen BioInnovation Institute’s facility and the FMI Medical Systems’ facility ($16 million), funded by a Chinese investment group. The retail sector continues to go at a slow but steady pace, with vacancies starting to improve. Walmart is planning to replace an existing store with a new Super Center/Sams Club. On the south side Walmart is expanding an existing store by 35,000 SF to create another Super Center. The office market continues to struggle with current overall vacancy rates approaching the 24% range, and 12% in the CBD. Rates continue to be lower and creative deals are becoming the norm. Corporations continue to be cautious and are still downsizing. There has been little to no new office development over the past two years. The state economic development department has been privatized into several regional offices. They fall under the new Jobs Ohio program, which is funded by a $100 million annual seed fund to help grow and attract businesses to Ohio. Contact NAI Spring +1 330 966 8800 Metropolitan Area Economic Overview 2011 Population 2016 Estimated Population Employment Population Household Average Income Median Household Income Total Population Median Age 402,664 395,348 206,014 $59,295 $46,695 40 The commercial real estate market in Canton has remained relatively stable in 2011. Canton, located just 60 miles south of Cleveland, offers businesses an educated labor force, low cost of living and a great place to raise a family. Canton’s growth during the second half of 2011 centered around the oil and gas industry. The influx of tenants for both warehouse and office space helped stabilize rates and fill mostly vacant industrial buildings, land and warehouse. Much of the vacant industrial space with acreage has been absorbed by the oil and gas industry in association with drilling and exploration of the Utica and Marcellus Shales. In addition, we have seen growth in manufacturing as well. Suarez Corporation leased approximately 200,000 SF in North Canton for manufacturing the EdenPURE heater. Office space is still abundant in downtown Canton and Belden Village. Buyers in 2011 continue to see excellent deals and tenants very reasonable rates. VXI Global Solutions purchased the former Ohio Bell building to locate their regional call center, eventually bringing 1,000 jobs to Canton. Diebold also announced in May that they will be building a new corporate headquarters in the area. Location and timing is still to be determined. The Pro Football Hall of Fame is also in the middle of a two year, $23.6 million expansion. Retail growth has seen a very slight upturn, but developer Stark Enterprises is in talks to create a new retail sector north of the current strip center. The Akron Canton Airport (CAK) continues to grow, meeting record numbers every year. The airport just completed an interior renovation and they are in the midst of a significant parking expansion. All local colleges including Stark State, Kent State-Stark, Walsh University and Malone University continue to grow with on and off campus expansions of educational facilities and cooperative ventures with local businesses. 2012 looks bright with the oil and gas industry creating new jobs and opportunities in all sectors including industrial, office, retail and land. Also, the Timken Company, a major corporation in the area is looking at construction of a new corporate office. Akron At A Glance (Rent/SF/YR) low High effective avg. Vacancy doWntoWn offIce New Construction (AAA) Class A (Prime) Class B (Secondary) suburban offIce New Construction (AAA) Class A (Prime) Class B (Secondary) IndustrIal $ $ $ $ $ $ 19.00 14.00 9.50 17.50 14.50 8.50 $ $ $ $ $ $ 23.00 19.00 19.00 21.00 20.00 14.00 $ 16.50 $ 16.00 $ 14.07 $ 18.50 $ 18.50 $ 12.00 N/A 11.00% 13.00% N/A 15.00% 23.00% Bulk Warehouse Manufacturing High Tech/R&D retaIl $ $ $ 2.25 2.75 7.00 $ $ $ 4.00 3.75 8.00 $ $ $ 3.25 3.25 7.50 14.00% 12.00% N/A Downtown Neighborhood Service Centers Community Power Center Regional Malls $ $ $ $ 7.00 6.00 10.00 20.00 $ $ $ $ 17.00 30.00 17.00 30.00 $ 12.00 $ 13.50 $ 14.00 $ 25.00 8.00% 14.00% 14.00% 4.00% deVeloPment land Low/Acre High/Acre Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential $ $ $ $ $ $ 350,000.00 140,000.00 60,000.00 55,000.00 100,000.00 15,000.00 $ $ $ $ $ $ 525,000.00 250,000.00 100,000.00 90,000.00 300,000.00 20,000.00 Canton At A Glance (Rent/SF/YR) low High effective avg. Vacancy doWntoWn offIce New Construction (AAA) Class A (Prime) Class B (Secondary) suburban offIce New Construction (AAA) Class A (Prime) Class B (Secondary) IndustrIal $ $ $ $ $ $ 14.00 11.00 8.00 14.00 11.00 8.00 $ $ $ $ $ $ 18.00 16.00 12.00 22.00 18.00 12.00 $ 16.00 $ 14.00 $ 10.00 $ 18.00 $ 14.00 $ 10.00 N/A 12.00% 28.00% N/A 15.00% 17.00% Bulk Warehouse Manufacturing High Tech/R&D retaIl $ $ $ 1.50 2.00 6.00 $ $ $ 4.00 3.50 12.00 $ $ $ 2.75 2.75 9.00 8.00% 10.00% 8.00% Downtown Neighborhood Service Centers Community Power Center Regional Malls $ $ $ $ 8.00 6.00 8.00 15.00 $ $ $ $ 16.00 30.00 14.00 30.00 $ 12.00 $ 12.00 $ 10.00 $ 20.00 15.00% 13.00% 10.00% 8.00% deVeloPment land Low/Acre High/Acre Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential $ $ $ $ $ $ 75,000.00 100,000.00 20,000.00 20,000.00 200,000.00 20,000.00 $ $ $ $ $ $ 150,000.00 250,000.00 100,000.00 200,000.00 850,000.00 200,000.00 2012 Global Market Report n www.naiglobal.com 123
Cincinnati, Ohio Cleveland, Ohio Contact NAI Bergman +1 513 769 1700 Metropolitan Area Economic Overview 2011 Population 2016 Estimated Population Employment Population Household Average Income Median Household Income Total Population Median Age 2,125,952 2,113,487 1,115,297 $72,204 $55,705 36 Slow and steady with a lot of patience is the 2012 mantra. The Greater Cincinnati economic outlook remains focused on recovery, anticipating slight increases from the 2011 anemic growth. Housing inventory dropped to a more market-manageable norm. Low inflation is expected to keep the local economy improving. The signs of improvement continue to require a great measure of nurturing. Cincinnati received significant 2011 recognition being named #10 - Kiplinger’s Top 10 Value Cities and #5 - List of America’s Most Affordable Cities. The 2011 Cincinnati office market witnessed the much anticipated CBD tenant shuffle. Great American Insurance Group (563,300 SF); Frost Brown Todd L.L.C. (103,000 SF); Vorys, Sater, Seymour, & Pease LLP (75,000 SF) moved to the Great American Tower at Queen City Square, the 825,000 SF downtown centerpiece located at 301 East Fourth Street. Other large downtown players were Dunhumby USA, First Financial Bank and Rendigs, Fry, Kiely, & Dennis. Children’s Hospital Medical Center moved to the newly renovated Vernon Manor Hotel (156,000 SF). The largest suburban transaction was Humana RightSource at the Executive Center I building (173,884 SF). The 2012 office market challenge will be to maintain Cincinnati’s major economic players, fill the space blocks left vacant by the Great American Tower opening and create rent stability. Retail vacancy increased in 2011. Rents were slightly down year-over-year. We expect vacancy rates to improve overall in 2012. Target completed two new stores at 9023 Plainfield Rd (138,568 SF) and 120 Pavilion Parkway (134,500 SF); and Jungle Jim’s added an Eastgate location (175,000 SF). Other active retail tenants included Hobby Lobby, Remke, Dunham’s Sports, Aveda Institute, buybuy Baby, Aldi and Smashburger. While the overall industrial vacancy rate is stable, high vacancy in manufacturing is expected to continue throughout 2012. The rental rates in distribution appear to be stabilizing. A spec 550,000 SF distribution center by IDI may be a clue to rising rental rates. Significant sales included 8741 Jacquemin Drive (601,065 SF) at $47/SF, 4520 LeSaint Court (299,600 SF) at $41/SF and 1700 Carillon Blvd (335,770 SF) at $49/SF. Significant leases included Spiraledge (390,000 SF), Southwest Stainless (166,400 SF) and The Wornick Company (150,000 SF). Contact NAI Daus +1 216 831 3310 Metropolitan Area Economic Overview 2011 Population 2016 Estimated Population Employment Population Household Average Income Median Household Income Total Population Median Age 2,229,639 2,193,489 1,165,494 $73,099 $57,705 39 The Cleveland marketplace continued to show a general improvement, but the recovery has been anything but smooth and characterized by a series of ‘good news bad news’ scenarios. The over-riding good news included a noticeable increase in leasing velocity as well as the gradual loosening in the financing market. But nearly all of the leasing activity was smaller in terms of square footage and term, and the number of distressed commercial properties continued to mount. The overall office vacancy rate ended the year at 13%. Leasing rates were flat and net absorption was slightly positive. But the landscape will change in the next 24 months. Eaton Corporation, Ernst & Young and American Greetings will all move into new facilities. This will be a boom for the immediate areas they are moving to, but it could be a bust to the immediate areas they are leaving behind. The completion of the new medical mart and Horseshoe Casino will help increase activity downtown; their collective impact on the downtown office market will be closely watched. Cleveland’s economic fortune has been closely tied to the industrial sector. Bolstered by steady improvement across the automotive, construction and transportation segments, the region’s industrial sector was stable. Rents were slightly softer, overall vacancy was under 10%, which is relatively unchanged from 2010 and new construction was limited to a small handful of build-to-suit projects. The retail sector saw a similar scenario, slowly improving leasing activity, flat rents and limited new construction. It also saw good news, bad news. The good news are large-scale retail development projects announced by First Interstate in Cleveland Heights & South Euclid and by the Jacobs Group in Avon. The bad news is the continuing struggle among many retailers headlined by the bankruptcy filings of Borders Books and Blockbuster Video. Looking forward, 2012 will likely look a lot like 2011. Businesses will exercise caution when making any decision, particularly with regards to their real estate needs. Lending will continue to loosen and market rate sales will again be in short supply. The result will be a sustained slow improvement that stretches into 2013. Cincinnati At A Glance (Rent/SF/YR) low High effective avg. Vacancy doWntoWn offIce New Construction (AAA) Class A (Prime) Class B (Secondary) suburban offIce New Construction (AAA) Class A (Prime) Class B (Secondary) IndustrIal $ $ $ $ N/A 14.00 11.00 N/A 12.46 10.00 $ $ $ $ N/A 27.00 18.00 N/A 20.97 19.86 N/A $ 20.50 $ 14.50 N/A $ 17.00 $ 14.50 N/A 18.50% 17.00% N/A 18.80% 15.00% Bulk Warehouse Manufacturing High Tech/R&D retaIl $ $ 2.15 1.00 N/A $ $ 4.25 7.00 N/A $ $ 2.90 2.64 N/A 9.30% 20.50% N/A Downtown Neighborhood Service Centers Community Power Center Regional Malls $ $ $ $ 9.00 2.30 5.00 12.00 $ $ $ $ 12.50 30.00 30.00 24.00 $ 12.11 $ 10.62 $ 12.76 $ 18.77 2.40% 19.10% 11.00% 12.00% deVeloPment land Low/Acre High/Acre Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park Retail/Commercial Land Residential $ $ $ $ $ $ 100,000.00 50,000.00 26,000.00 15,000.00 150,000.00 15,000.00 $ $ $ $ $ $ 500,000.00 400,000.00 200,000.00 400,000.00 600,000.00 85,000.00 Cleveland At A Glance (Rent/SF/YR) low High effective avg. Vacancy doWntoWn offIce New Construction (AAA) Class A (Prime) Class B (Secondary) suburban offIce New Construction (AAA) Class A (Prime) Class B (Secondary) IndustrIal Bulk Warehouse Manufacturing High Tech/R&D retaIl Downtown Neighborhood Service Centers Community Power Center Regional Malls $ $ $ $ $ $ $ $ $ $ $ 31.00 17.00 14.00 24.00 16.00 12.00 3.00 2.75 N/A N/A 5.00 6.00 5.00 $ $ $ $ $ $ $ $ $ $ $ 34.00 24.00 18.00 26.00 23.00 16.00 5.50 5.75 N/A N/A 32.00 30.00 70.00 $ $ $ $ $ $ $ $ $ $ $ 33.00 17.90 14.10 22.00 18.40 15.20 4.00 3.75 N/A N/A 12.00 14.00 25.00 44.00% 13.50% 22.50% 28.20% 12.00% 11.90% 9.20% 9.00% N/A N/A 18.30% 16.40% 7.60% deVeloPment land Low/Acre High/Acre Office in CBD Land in Office Parks Land in Industrial Parks Office/Industrial Land - Non-park $ $ $ $ 125,000.00 100,000.00 60,000.00 80,000.00 $ $ $ $ 300,000.00 400,000.00 125,000.00 150,000.00 Retail/Commercial Land $ 60,000.00 $ 1,000,000.00 Residential $ 6,000.00 $ 100,000.00 2012 Global Market Report n www.naiglobal.com 124
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2012 Global Market report Values, t
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n n n table of contents General Inf
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Global Outlook US Year in Review As
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55% (1.1 million) owning and 45% (8
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short-term leases, the multifamily
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Alberta is home to Canada’s oil a
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Office The sovereign debt crisis an
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Area Type Q1 2010 Q2 2010 Q3 2010 Q
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obust telecom infrastructure and av
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For 2012, absorption in the commerc
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n us Highlights - northeast region
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n us Highlights - midwest region n
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n us Highlights - West region n Ari
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Adelaide, Australia Brisbane, Austr
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Sydney, Australia Beijing, China Co
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Shanghai, China Shenzhen, China Con
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Chennai, India Mumbai, India Contac
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Jakarta, Indonesia Tokyo, Japan Con
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Christchurch, New Zealand Wellingto
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Taipei, Taiwan Ho Chi Minh City, Vi
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Calgary, Alberta, Canada Edmonton,
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Halifax, Nova Scotia, Canada Ottawa
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Regina, Saskatchewan, Canada Contac
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The Baltics (Latvia/Estonia/Lithuan
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Helsinki, Finland Paris - lle de Fr
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Tel Aviv, Israel Almaty, Kazakhstan
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Amsterdam, The Netherlands Oslo, No
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Moscow, Russia St. Petersburg, Russ
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Madrid, Spain Stockholm, Sweden Con
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Istanbul, Turkey Kiev, Ukraine Cont
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Leeds, England, United Kingdom Lond
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Latin America sectIon contents Buen
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Rio de Janeiro, Brazil Sao Paulo, B
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San Jose, Costa Rica Contact NAI Co
Page 73 and 74: Guadalajara, Jalisco, Mexico Guanaj
Page 75 and 76: Mexico City, Mexico Contact NAI Mex
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Page 79 and 80: Lima, Peru Caracas, Venezuela Conta
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Page 83 and 84: Little Rock, Arkansas Bakersfield,
Page 85 and 86: Oakland, California Orange County,
Page 87 and 88: San Francisco, California Ventura C
Page 89 and 90: Hartford, Connecticut Wilmington, D
Page 91 and 92: Fort Lauderdale, Florida Ft. Myers/
Page 93 and 94: Miami, Florida Ocala/Gainesville, F
Page 95 and 96: Tampa Bay, Florida Atlanta, Georgia
Page 97 and 98: Boise, Idaho Southeast (Idaho Falls
Page 99 and 100: Fort Wayne, Indiana Indianapolis, I
Page 101 and 102: Des Moines, Iowa Sioux City, Iowa C
Page 103 and 104: Baton Rouge, Louisiana Lake Charles
Page 105 and 106: Greater Portland, Maine Baltimore,
Page 107 and 108: Greater Springfield, Massachusetts
Page 109 and 110: Minneapolis/St. Paul, Minnesota Jac
Page 111 and 112: Billings, Montana Bozeman, Montana
Page 113 and 114: Omaha, Nebraska Las Vegas, Nevada C
Page 115 and 116: Portsmouth, New Hampshire Atlantic
Page 117 and 118: Ocean/Monmouth Counties (“Shore M
Page 119 and 120: Las Cruces, New Mexico Albany, New
Page 121 and 122: Westchester, New York Asheville, No
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Page 129 and 130: Berks County, Pennsylvania Bucks Co
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Page 135 and 136: Sioux Falls, South Dakota Chattanoo
Page 137 and 138: Memphis, Tennessee Nashville, Tenne
Page 139 and 140: Corpus Christi, Texas Dallas, Texas
Page 141 and 142: Houston, Texas Contact NAI Houston
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