Metro Milwaukee Industrial Market Review 2018 Q3

Transcription

1 Metro Milwaukee Industrial Market Review RETAIL OFFICE INDUSTRIAL LAND INVESTMENT NAI MLG COMMERCIAL N BROADWAY, SUITE 700, MILWAUKEE, WI MLGCOMMERCIAL.COM

2 Metro Milwaukee Industrial Market Report Year-over-Year Changes 3Q17 vs. 3Q18 NET ABSORPTION AVAILABILITY 2Q18 vs. 3Q18 AVAILABILITY VACANCY Quarter-over-Quarter Changes NET ABSORPTION VACANCY ASKING S ASKING S Market Notes *Since the economic downturn, the Milwaukee market has shown continued growth and demand for quality product. This past quarter, the market showed 1.3 million SF of negative absorption, making it only the 2nd quarter in the past 28 to show negative absorption. However, this number is deceptive as the majority of the quarterly negative absorption can be attributed to JCPenney leaving a 2 million SF warehouse in Wauwatosa. The new availability has garnished interest for multiple parties and we expect it to be backfilled relatively soon. Also noteworthy is the fact there are over 20 projects currently under construction or planned with in the metro. Vacancy & Absorption 3,000,000 2,500,000 2,000,000 1,500,000 1,000, ,000 - (500,000) (1,000,000) (1,500,000) 2012 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q2 8% 7% 6% 5% 4% 3% 2% 1% 0% Quarterly Absorption Vacancy Rate (%) Source: CoStar, Catylist, Esri & NAI MLG Commercial s proprietary data. Milwaukee, Wisconsin Page 2

3 Milwaukee Metro Stats Significant Lease Transactions Property City Tenant Size SF Holy Hill Rd Germantown Briggs & Stratton 700, S. 3rd St Milwaukee Ryder Integrated Logistics, Inc. 360, International Dr Cudahy RR Donnelley 153,300 Significant Sale Transactions Snapshot Use / Inventory Availability Vacancy Quarterly 2018 Quarter (SF) Rate (%) Rate (%) Absorption Absorption Flex 43,273, % 2.8% 52, ,757 Lt Ind 144,209, % 3.1% 91, ,291 Whse/Dist 138,028, % 6.5% (1,177,776) (322,521) 325,511, % 4.5% (1,033,280) 363, Q2 323,744, % 3.7% 926,003 1,374, Q1 322,915, % 3.9% 448,041 4,249, Q4 322,859, % 4.2% 991,388 2,298,044 Property City Buyer Size SF Price 1100/1022 Milwaukee Ave South Milwaukee Reich Brothers, LLC 750,300 $13,275, W. Calumet Rd Milwaukee AGI Fabricators 181,692 $7,400,000 N31W22386/W22350 Green Rd Pewaukee Pam Joy Realty, Inc. 136,593 $7,050,000 Significant Q3 Absorption Changes Positive Absorption Changes Negative Absorption Changes Property Absorption Property Absorption 4620 W Oakwood Park Dr 162, W Burleigh St* (1,995,825) 5201 International Dr 153, th St (121,052) 8501 W Brown Deer Rd 118, N 60th St (98,927) 525 W Marquette Ave 112,144 N8W22270 Johnson Dr (80,000) W Greenfield Ave 90, International Dr (73,598) 500 N Spring St 82,241 N60W16590 Kohler Ln (62,430) N Commerce St 81, W Park Pl (56,293) 3282 N 35th St 75, W Edgerton Ave (54,632) Source: CoStar, Catylist & NAI MLG Commercial s proprietary data. Milwaukee, Wisconsin Page 3

4 Metro Milwaukee 3.0% 92,358 (38,414) Ozaukee Vacancy (%) Q3 Absorption 2018 Absorption 3.6% 97, ,895 Washington Vacancy (%) Q3 Absorption 2018 Absorption 1.3% 74,459 80,597 Milwaukee Vacancy (%) Q3 Absorption 2018 Absorption 7.1% (1,211,364) (1,127,424) Waukesha Vacancy (%) Q3 Absorption 2018 Absorption 2.0% (171,446) 321,828 Central Racine Vacancy (%) Q3 Absorption 2018 Absorption 5.5% 118, ,727 South Walworth Vacancy (%) Q3 Absorption 2018 Absorption 2.8% 17,570 89,926 South Kenosha Vacancy (%) Q3 Absorption 2018 Absorption 3.6% (50,327) 516,564 Central North North North Sheboygan Vacancy (%) Q3 Absorption 2018 Absorption South Industrial Market Report Source: CoStar, Catylist, Esri & NAI MLG Commercial s proprietary data. Milwaukee, Wisconsin Page 4

5 Milwaukee Metro Stats Central Central South South North North North South Submarket Milwaukee Inventory (SF) Available (SF) Available (%) Vacancy (SF) Vacancy (%) Qtrly Absorption (SF) 2018 Absorption (SF) Flex 21,398,403 1,419, % 644, % (42,049) 16,648 Lt Ind 55,106,276 4,348, % 2,904, % 165, ,347 Whse/Dist 47,531,039 7,257, % 5,231, % (1,334,636) (1,389,419) Waukesha Total 124,035,718 13,024, % 8,780, % (1,211,364) (1,127,424) Flex 9,690, , % 208, % (28) 86,250 Lt Ind 37,643,056 1,268, % 522, % (200,838) 2,032 Whse/Dist 28,841,576 1,679, % 759, % 29, ,546 Racine Total 76,175,231 3,404, % 1,489, % (171,446) 321,828 Flex 2,321, , % 86, % 11,305 (11,795) Lt Ind 17,195,734 1,223, % 438, % 32,061 89,424 Whse/Dist 11,971,291 2,060, % 1,214, % 75, ,098 Kenosha Total 31,488,521 3,431, % 1,739, % 118, ,727 Flex 977, , % 78, % 1,324 (23,176) Lt Ind 6,678, , % 2, % - 84,300 Whse/Dist 25,745,528 2,665, % 1,132, % (51,651) 455,440 Washington Total 33,401,226 3,269, % 1,213, % (50,327) 516,564 Flex 3,994, , % 82, % 88, ,388 Lt Ind 8,609, , % 59, % - (49,800) Whse/Dist 7,363, , % 113, % (13,887) 27,009 Sheboygan Total 19,967, , % 254, % 74,459 80,597 Flex 525,357 16, % 16, % (9,250) 160 Lt Ind 4,643,831 61, % 25, % 13,000 1,536 Whse/Dist 10,397, , % 447, % 88,608 36,718 Ozaukee Total 15,567, , % 489, % 92,358 38,414 Flex 3,458, , % 92, % 2,863 (21,157) Lt Ind 6,168, , % 341, % 94, ,252 Whse/Dist 2,584, , % - 0.0% - 4,800 Walworth Current Stats Total 12,211,057 1,099, % 434, % 97, ,895 Flex 907,829 47, % 10, % - (9,561) Lt Ind 8,163, , % 248, % (11,800) (20,800) Whse/Dist 3,593, , % 100, % 29, ,287 Total 12,665, , % 359, % 17,570 89,926 Grand Total 325,511,915 26,251, % 14,760, % (1,033,280) 363,527 Source: CoStar, Catylist & NAI MLG Commercial s proprietary data. Milwaukee, Wisconsin Page 5

6 Metro Milwaukee Industrial Market Report Historic Vacancy Millions % 7% 6% 5% 4% 3% 2% 1% 0% Regional Vacancy Vacant SF 3 yr. Trailing Average 1 yr. Trailing Average 12% 10% 8% 6% 4% 2% 2008 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q2 0% North Central South Source: CoStar, Catylist, Esri & NAI MLG Commercial s proprietary data. Milwaukee, Wisconsin Page 6

7 Trends Historic Absorption 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000, ,000 - (500,000) (1,000,000) (1,500,000) 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% -0.5% -1.0% -1.5% Q Absorption SF 1 yr. Trailing Average Growth Regional Absorption Millions Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q2 North Central South Source: CoStar, Catylist & NAI MLG Commercial s proprietary data. Milwaukee, Wisconsin Page 7

8 Metro Milwaukee Milwaukee County FLEX LIGHT IND WAREHOUSE TOTAL INVENTORY (SF) 21,398,403 55,106,276 47,531, ,035,718 AVAILABILITY (SF) 1,419,861 4,348,026 7,257,036 13,024,923 AVAILABILITY (%) 6.6% 7.9% 15.3% 10.5% VACANCY (SF) 644,726 2,904,055 5,231,557 8,780,338 VACANCY (%) 3.0% 5.3% 11.0% 7.1% Q3 ABSORPTION (SF) (42,049) 165,321 (1,334,636) (1,211,364) 2018 ABSORPTION (SF) 16, ,347 (1,389,419) (1,127,424) Year-over-Year Changes 3Q17 vs. 3Q18 # People 947,960 # Businesses 28,941 # Employees 511,710 Unemployment Rate 5.9% NET ABSORPTION AVAILABILITY VACANCY ASKING S Vacancy & Absorption 1,000, ,000 - (500,000) (1,000,000) (1,500,000) 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% Quarterly Absorption Vacancy Rate (%) Source: CoStar, Catylist, Esri & NAI MLG Commercial s proprietary data. Milwaukee, Wisconsin Page 8

9 Industrial 2018 Availability Milwaukee County Available Space Industrial Building Source: CoStar, Catylist & NAI MLG Commercial s proprietary data. Milwaukee, Wisconsin Page 9

10 Metro Milwaukee Waukesha County Year-over-Year Changes 3Q17 vs. 3Q18 FLEX LIGHT IND WAREHOUSE TOTAL INVENTORY (SF) 9,690,599 37,643,056 28,841,576 76,175,231 AVAILABILITY (SF) 456,992 1,268,001 1,679,890 3,404,883 AVAILABILITY (%) 4.7% 3.4% 5.8% 4.5% VACANCY (SF) 208, , ,063 1,489,737 VACANCY (%) 2.1% 1.4% 2.6% 2.0% Q3 ABSORPTION (SF) (28) (200,838) 29,420 (171,446) 2018 ABSORPTION (SF) 86,250 2, , ,828 # People 402,229 # Businesses 16,802 # Employees 274,596 Unemployment Rate 2.6% NET ABSORPTION AVAILABILITY VACANCY ASKING S Vacancy & Absorption 800, , , ,000 - (200,000) (400,000) (600,000) (800,000) 5% 4% 3% 2% 1% 0% Quarterly Absorption Vacancy Rate (%) Source: CoStar, Catylist, Esri & NAI MLG Commercial s proprietary data. Milwaukee, Wisconsin Page 10

11 Industrial 2018 Availability Waukesha County Available Space Industrial Building Source: CoStar, Catylist & NAI MLG Commercial s proprietary data. Milwaukee, Wisconsin Page 11

12 Metro Milwaukee Racine County Year-over-Year Changes 3Q17 vs. 3Q18 FLEX LIGHT IND WAREHOUSE TOTAL INVENTORY (SF) 2,321,496 17,195,734 11,971,291 31,488,521 AVAILABILITY (SF) 148,725 1,223,116 2,060,071 3,431,912 AVAILABILITY (%) 6.4% 7.1% 17.2% 10.9% VACANCY (SF) 86, ,917 1,214,072 1,739,054 VACANCY (%) 3.7% 2.6% 10.1% 5.5% Q3 ABSORPTION (SF) 11,305 32,061 75, , ABSORPTION (SF) (11,795) 89, , ,727 # People 197,399 # Businesses 6,018 # Employees 89,139 Unemployment Rate 5.6% NET ABSORPTION AVAILABILITY VACANCY ASKING S Vacancy & Absorption 600, , , , , ,000 - (100,000) (200,000) (300,000) 2012 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q2 Quarterly Absorption Vacancy Rate (%) 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% Source: CoStar, Catylist, Esri & NAI MLG Commercial s proprietary data. Milwaukee, Wisconsin Page 12

13 Industrial 2018 Availability Racine County Available Space Industrial Building Source: CoStar, Catylist & NAI MLG Commercial s proprietary data. Milwaukee, Wisconsin Page 13

14 Metro Milwaukee Kenosha County Year-over-Year Changes 3Q17 vs. 3Q18 FLEX LIGHT IND WAREHOUSE TOTAL INVENTORY (SF) 977,165 6,678,533 25,745,528 33,401,226 AVAILABILITY (SF) 170, ,128 2,665,202 3,269,661 AVAILABILITY (%) 17.4% 6.5% 10.4% 9.8% VACANCY (SF) 78,907 2,000 1,132,443 1,213,350 VACANCY (%) 8.1% 0.0% 4.4% 3.6% Q3 ABSORPTION (SF) 1,324 0 (51,651) (50,327) 2018 ABSORPTION (SF) (23,176) 84, , ,564 # People 170,454 # Businesses 4,535 # Employees 68,272 Unemployment Rate 7.0% NET ABSORPTION AVAILABILITY VACANCY ASKING S Vacancy & Absorption 1,800,000 10% 1,600,000 9% 1,400,000 8% 1,200,000 7% 1,000,000 6% 800,000 5% 600,000 4% 400,000 3% 200,000 2% - 1% (200,000) 0% 2012 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q2 Quarterly Absorption Vacancy Rate (%) Source: CoStar, Catylist, Esri & NAI MLG Commercial s proprietary data. Milwaukee, Wisconsin Page 14

15 Industrial 2018 Availability Kenosha County Available Space Industrial Building Source: CoStar, Catylist & NAI MLG Commercial s proprietary data. Milwaukee, Wisconsin Page 15

16 Metro Milwaukee Washington County Year-over-Year Changes 3Q17 vs. 3Q18 FLEX LIGHT IND WAREHOUSE TOTAL INVENTORY (SF) 3,994,107 8,609,969 7,363,583 19,967,659 AVAILABILITY (SF) 247, , , ,279 AVAILABILITY (%) 6.2% 2.0% 2.6% 3.1% VACANCY (SF) 82,429 59, , ,738 VACANCY (%) 2.1% 0.7% 1.5% 1.3% Q3 ABSORPTION (SF) 88,346 0 (13,887) 74, ABSORPTION (SF) 103,388 (49,800) 27,009 80,597 # People 135,837 # Businesses 4,692 # Employees 66,314 Unemployment Rate 2.8% NET ABSORPTION AVAILABILITY VACANCY ASKING S Vacancy & Absorption 400, , , , , , ,000 50,000 - (50,000) (100,000) 8% 7% 6% 5% 4% 3% 2% 1% 0% Quarterly Absorption Vacancy Rate (%) Source: CoStar, Catylist, Esri & NAI MLG Commercial s proprietary data. Milwaukee, Wisconsin Page 16

17 Industrial 2018 Availability Washington County Available Space Industrial Building Source: CoStar, Catylist & NAI MLG Commercial s proprietary data. Milwaukee, Wisconsin Page 17

18 Metro Milwaukee Sheboygan County Year-over-Year Changes 3Q17 vs. 3Q18 FLEX LIGHT IND WAREHOUSE TOTAL INVENTORY (SF) 525,357 4,643,831 10,397,942 15,567,130 AVAILABILITY (SF) 16,250 61, , ,735 AVAILABILITY (%) 3.1% 1.3% 6.0% 4.5% VACANCY (SF) 16,250 25, , ,271 VACANCY (%) 3.1% 0.5% 4.3% 3.1% Q3 ABSORPTION (SF) (9,250) 13,000 88,608 92, ABSORPTION (SF) 160 1,536 36,718 38,414 # People 116,309 # Businesses 4,281 # Employees 68,007 Unemployment Rate 3.7% NET ABSORPTION 500, , , , ,000 - (100,000) AVAILABILITY VACANCY ASKING S Vacancy & Absorption 9% 8% 7% 6% 5% 4% 3% 2% 1% (200,000) 2012 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q2 Quarterly Absorption Vacancy Rate (%) 0% Source: CoStar, Catylist, Esri & NAI MLG Commercial s proprietary data. Milwaukee, Wisconsin Page 18

19 Industrial 2018 Availability Sheboygan County Available Space Industrial Building Source: CoStar, Catylist & NAI MLG Commercial s proprietary data. Milwaukee, Wisconsin Page 19

20 Metro Milwaukee Ozaukee County FLEX LIGHT IND WAREHOUSE TOTAL INVENTORY (SF) 3,458,680 6,168,048 2,584,329 12,211,057 # People 88,799 AVAILABILITY (SF) 354, , ,031 1,099,913 AVAILABILITY (%) 10.3% 10.2% 4.4% 9.0% VACANCY (SF) 92, , ,723 VACANCY (%) 2.7% 5.5% 0.0% 3.6% Q3 ABSORPTION (SF) 2,863 94, , ABSORPTION (SF) (21,157) 193,252 4, ,895 Year-over-Year Changes 3Q17 vs. 3Q18 # Businesses 3,775 # Employees 49,534 Unemployment Rate 3.5% NET ABSORPTION 350, , , , , ,000 50,000 - (50,000) (100,000) (150,000) 2012 Q Q2 AVAILABILITY 2012 Q Q Q Q Q3 VACANCY 2013 Q Q Q Q3 ASKING S Vacancy & Absorption 2014 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q2 14% 13% 12% 11% 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% Quarterly Absorption Vacancy Rate (%) Source: CoStar, Catylist, Esri & NAI MLG Commercial s proprietary data. Milwaukee, Wisconsin Page 20

21 Industrial 2018 Availability Ozaukee County Available Space Industrial Building Source: CoStar, Catylist & NAI MLG Commercial s proprietary data. Milwaukee, Wisconsin Page 21

22 Metro Milwaukee Walworth County Year-over-Year Changes 3Q17 vs. 3Q18 FLEX LIGHT IND WAREHOUSE TOTAL INVENTORY (SF) 907,829 8,163,978 3,593,566 12,665,373 AVAILABILITY (SF) 47, , , ,290 AVAILABILITY (%) 5.2% 5.9% 5.0% 5.6% VACANCY (SF) 10, , , ,127 VACANCY (%) 1.1% 3.0% 2.8% 2.8% Q3 ABSORPTION (SF) 0 (11,800) 29,370 17, ABSORPTION (SF) (9,561) (20,800) 120,287 89,926 # People 103,235 # Businesses 4,136 # Employees 50,310 Unemployment Rate 2.8% NET ABSORPTION 500, , , , ,000 - (100,000) (200,000) AVAILABILITY VACANCY ASKING S Vacancy & Absorption 6% 5% 4% 3% 2% 1% (300,000) 2012 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q2 Quarterly Absorption Vacancy Rate (%) 0% Source: CoStar, Catylist, Esri & NAI MLG Commercial s proprietary data. Milwaukee, Wisconsin Page 22

23 Industrial 2018 Availability Walworth County Available Space Industrial Building Source: CoStar, Catylist & NAI MLG Commercial s proprietary data. Milwaukee, Wisconsin Page 23

24 Metro Milwaukee Industrial Market Report Methodology, Definitions & Submarket Map Methodology: The report includes all industrial properties larger than 10,000 SF within the 8 county Milwaukee metro. Excluded from the report are government owned buildings and those buildings considered special use industrial. For reporting purposes, incubator space is included within Flex; bulk warehouse, truck terminals, warehouse freezer space is included within Warehouse Distribution; light industrial is included under Manufacturing. Inventory: The total square footage of a building that can be occupied. Available Rate: A measurement expressed as a percentage of the total amount of available space divided by the total amount of existing inventory. Vacancy Rate: A measurement expressed as a percentage of the total amount of vacant space divided by the total amount of existing inventory. Net Absorption: The net change in occupied space over a given period of time. Unless noted, all net absorption figures include both direct and sublease space. Past Year Trailing Absorption %: The sum of the past four quarters net absorption divided by the current inventory. Sources used Data: CoStar, Catylist, Esri, JSonline/USA Today, Milwaukee Business Journal, BizTimes Media, internal market knowledge. Source: CoStar, Xceligent & NAI MLG Commercial s proprietary data. Milwaukee, Wisconsin Page 24

25 NAI MLG Commercial Industrial Team Our Team Barry Chavin, SIOR Principal t (414) m (414) bsc@mlgcommercial.com Stephen Provancher Principal t (414) m (414) sp@mlgcommercial.com Vytau Barcas Vice President t (414) m (262) vbarcas@mlgcommercial.com Anthony Bareta Senior Vice President t (414) m (414) tbareta@mlgcommercial.com Brett Garceau Senior Vice President t (414) m (262) bgarceau@mlgcommercial.com Adam Matson, SIOR Senior Vice President t (414) m (414) amatson@mlgcommercial.com Curt Pitzen Senior Vice President t (414) m (262) cpitzen@mlgcommercial.com Travis Tiede Senior Vice President t (414) m (920) ttiede@mlgcommercial.com Mitchell Starczynski Senior Vice President t (414) m (262) mstarczynski@mlgcommercial.com Kris Kucharski Sales Associate t (414) m (262) kak@mlgcommercial.com Patrick Hanrahan Sales Associate t (414) m (847) pgh@mlgcommercial.com Kris Kucharski Sales Associate t (414) m (262) kak@mlgcommercial.com Milwaukee, Wisconsin Page 25

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