MARKETBEAT - Cushman & Wakefield | Cornerstone

MARKETBEAT
INDUSTRIAL SNAPSHOT
NASHVILLE, TN
Q1 2015
A Cushman & Wakefield Research Publication
Cornerstone Commercial Real Estate Services
5106 Maryland Way
Brentwood, TN 37027
www.cushmanwakefield.com/knowledge
For more information, contact:
Ashley Albright, Director
+1 (615) 727 0010
aalbright@cornerstonecres.com
Q1 2015
Y-O-Y
CHANGE
8.4%
6.4%
2.0 pp
$3.51
$3.90
10.0%
1,070,871
1,814,629
41.0%
Overall Vacancy
Direct Asking Rents (psf/yr)
YTD Leasing Activity (sf)
12 MONTH
FORECAST
OVERALL RENTAL VS. VACANCY RATES
$3.90
15.0%
$3.80
12.5%
$3.70
10.0%
$3.60
7.5%
$3.50
5.0%
$3.40
2.5%
$3.30
0.0%
2011
2012
2013
2014
OVERALL NET RENTAL RATE
Q1 2015
OVERALL VACANCY RATE
OVERALL OCCUPIER ACTIVITY
8.2
10.0
0.2
2.0
0.5
4.0
1.8
2.8
4.4
6.0
6.6
8.0
msf
The industrial market closed the quarter out with a positive
absorption totaling 493,605 square feet (sf), an increase of nearly
470,000 sf from Q1 2014. Nashville’s industrial market had a strong
leasing quarter with year-to-date leasing totaling 1,814,629 sf, a 41
percent increase from this time last year. Both the Southeast and
Wilson County submarkets experienced a robust leasing quarter with
Ingram Holdings subleasing 313,854 sf in the Crossings, Federal Mogul
leasing 200,000 sf in SouthPark, and Denso leasing 165,980 sf in
Wilson Commerce Center A. As rental rates continue to increase,
many companies have found it to be more cost-effective to purchase
a property rather than to pay a landlord each month.
Q1 2014
2.2
The Nashville industrial market remains tight with a majority of the
submarkets with vacancy rates in the single digits. With the overall
vacancy rate of 6.4%, 200 basis points lower than this time last year,
choices for companies looking to relocate or expand are quickly
dwindling. Nashville closed out the quarter with roughly 2.5 million
square feet (msf) under construction with all scheduled for
completion by the end of this year. With the exception of Panattoni’s
Centrepointe, all of the projects that are currently under
construction are build-to-suits with Under Armour’s distribution
center being the largest at roughly 1.1 msf. This $100-million
investment is the company’s third U.S. distribution center and will
employ approximately 1,500 workers.
STATS ON THE GO
1.4
NASHVILLE INDUSTRIAL MARKET
Nashville will see its first true speculative construction since 2007
with multiple projects on the horizon. Since vacancy continues to
tighten to record levels, rents will continue to increase as landlords
look to capitalize on the current boom in the industrial market.
4.1
Fueled by thousands of new jobs and an
unemployment rate well below the state and
national average, 2015 will be a banner year for
the Nashville MSA. Now firmly positioned
inside the top fastest growing big cities in the
U.S. by the Census Bureau and Forbes, Nashville is projecting a
population growth of roughly 1.5% over the next 12 months and a job
growth rate of 2.75%. Nashville’s recent growth history will continue
through 2015 with Moody’s Analytics projecting that by 2016, 48,000
more jobs will be added to the job pool. About 70% of the new jobs
added in 2014 came from existing companies already in the area
looking to expand. Since July 2013, Nashville has experienced over
165 relocations and expansions comprising over $2.6 billion in capital
investments.
OUTLOOK
psf/yr
ECONOMIC OVERVIEW
0.0
2011
2012
LEASING ACTIVITY
2013
2014
YTD 2015
USER SALES ACTIVITY
The market terms and definitions in this report are based on NAIOP standards. No
warranty or representation, express or implied, is made to the accuracy or completeness
of the information contained herein, and same is submitted subject to errors, omissions,
change of price, rental or other conditions, withdrawal without notice, and to any special
listing conditions imposed by our principals.
© 2015 Cushman & Wakefield, Inc. All rights reserved.
1
NASHVILLE, TN
SUBMARKET
INVENTORY
OVERALL
VACANCY
RATE
YTD LEASING
ACTIVITY
YTD USER
SALES
ACTIVITY
YTD DIRECT
NET
ABSORPTION
YTD OVERALL
NET
ABSORPTION
East
15,176,625
2.0%
56,740
0
50,541
0
243,332
243,332
IBD
18,132,148
3.5%
154,362
0
0
0
42,394
42,394
$9.00
$4.82
Maury County
10,784,597
6.3%
0
0
0
0
0
0
$6.35
$3.12
North
42,062,898
6.1%
191,550
16,700
158,000
92,000
179,844
179,844
$10.56
$3.21
Southeast
57,678,886
6.7%
1,049,586
0
768,724
0
271,7001
271,701
$8.33
$3.35
Southwest
14,542,707
4.9%
13,171
0
0
0
(63,034)
(104,134)
$11.16
$4.96
8,209,482
12.3%
0
0
0
0
0
(254,612)
$6.55
$4.61
23,589,473
9.9%
349,220
129,210
1,564,453
0
(180,632)
(180,632)
$5.92
$3.18
190,186,816
6.4%
1,814,629
202,910 2,541,718
92,000
493,605
197,893
$9.25
$3.45
West
Wilson County
TOTALS
UNDER
YTD
CONSTRUCTION CONSTRUCTION
COMPLETIONS
DIRECT WEIGHTED
AVERAGE NET
RENTAL RATE
OS
W/D
$9.63
$3.96
* RENTAL RATES REFLECT ASKING $PSF/YEAR OS = OFFICE SERVICE W/D = WAREHOUSE/DISTRIBUTION
MARKET HIGHLIGHTS
SIGNIFICANT 1Q 2015 LEASE TRANSACTIONS
SUBMARKET
TENANT
PROPERTY TYPE
SQUARE FEET
The Crossings
Southeast
Ingram Holdings
Warehouse/Distribution
313,854
SouthPark F
Southeast
Federal Mogul
Warehouse/Distribution
200,000
648 Couchville Pike
Wilson
Denso
Warehouse/Distribution
165,980
210 Mundy Memorial*
Wilson
Undisclosed
Warehouse/Distribution
160,000
SIGNIFICANT 1Q 2015 SALE TRANSACTIONS
SUBMARKET
BUYER
PURCHASE PRICE / $PSF
SQUARE FEET
2020 Joe B Jackson Pkwy
Southeast
Select Income REIT
$72,200,000 / $71
1,015,741
480 River Rock Blvd
Southeast
Spirit Realty Capital
$11,900,000 / $38
310,746
1414 4th Ave S
IBD
4th Avenue South Ventures, GP
$63,150,000 / $29
110,132
100 Mundy Memorial Dr
Wilson
Altaquip, LLC
$2,846,300 / $42
68,210
SIGNIFICANT 2014 CONSTRUCTION
COMPLETIONS
400 Oakbluff Ln
SUBMARKET
MAJOR TENANT
COMPLETION DATE
North
Allied Modular
Q1 2015
BUILDING SQUARE FEET
(% LEASED)
92,000 (100%)
SIGNIFICANT PROJECTS UNDER
CONSTRUCTION
Under Armour Distribution
SUBMARKET
MAJOR TENANT
COMPLETION DATE
Wilson
Under Armour
Q3 2015
BUILDING SQUARE FEET
(% LEASED)
1,079,500 (100%)
Centerpointe Distribution Park
Southeast
Undisclosed
Q3 2015
595,360 (0%)
3602 Elam Farms
Southeast
Schwan Cosmetics
Q2 2015
171,364 (100%)
Gallatin
North
Beretta
Q3 2015
158,000 (100%)
Cornerstone Commercial Real Estate Services
5106 Maryland Way
Brentwood, TN 37027
www.cushmanwakefield.com/knowledge
For more information, contact:
Ashley Albright, Director
+1 (615) 727 0010
aalbright@cornerstonecres.com
The market terms and definitions in this report are based on NAIOP standards. No
warranty or representation, express or implied, is made to the accuracy or completeness
of the information contained herein, and same is submitted subject to errors, omissions,
change of price, rental or other conditions, withdrawal without notice, and to any special
listing conditions imposed by our principals.
© 2015 Cushman & Wakefield, Inc. All rights reserved.
2