Q1 2014 | INDUSTRIAL

CHARLOTTE, NORTH CAROLINA

INDUSTRIAL MARKET REPORT

Developers are One Step Away From

Breaking Ground
In the first quarter, net absorption in the Charlotte Industrial Market was a positive
486,450 square feet bringing the vacancy rate to 6.19% as both medium and large users
continue to return from the sidelines.
The largest lease signed in the 1st quarter was 950,000 square feet within Riverwalk
Business Park in Rock Hill, SC.

MARKET INDICATORS

Due to dwindling large blocks of Class A space, the average warehouse rents are
hovering at $4.18 psf. At this level it will create the momentum needed for additional
developers to enter our market place.

FORECAST

VACANCY

Beginning in the second half of last year, tenants have capitalized on favorable financing
terms and have actively been pursuing purchasing their existing leased buildings. An
example of this is Inteplast Group, Ltd., located within Beacon Commerce Park, acquired
their 178,442 SF building from landlord Beacon Partners.

ABSORPTION
RENTAL RATE
CONSTRUCTION

Speculative momentum in the market has continued within the southern corridor.
Developers East Group and Childress Klein will add to their portfolios at Steele Creek
Commerce Business Park and Ridge Creek West.
Along I-85 N Childress Klein, Silverman Group and Trinity Capital are under
construction with speculitive projects.

> E-commerce and Manufacturing

demands will drive developers to
build larger distribution centers.

CHARLOTTE INDUSTRIAL MARKET

> Q1 2014 STATISTICS

3,000,000
2,000,000

132,677,635 SF

15%

TOTAL MARKET INVENTORY

10%

6.19%

2014

2013

2012

2011

2010

2009

2008

2007

OVERALL VACANCY RATE

2006

(1,000,000)
(2,000,000)

Absorption

www.colliers.com/charlotte

20%

1,000,000

2005

Square Feet

> Landlords continue to push

warehouse and flex rents.

25%

4,000,000

> Single Tenant free standing buildings

are in demand for purchase.

2004

RELATIVE
TO PRIOR
QUARTER

Deliveries

Vacancy %

5%

5.05%

0%

WAREHOUSE VACANCY RATE

RESEARCH & FORECAST REPORT | Q1 2014 | CHARLOTTE, NC

CHARLOTTE, NORTH CAROLINA INDUSTRIAL MARKET

Bldgs

Total
Inventory
Sq Ft

Direct
Vacant
Sq Ft

Direct
Vacancy
Rate

Sublease
Vacant
Sq Ft

Sublease
Vacancy
Rate

Total
Vacant
Sq Ft

Vacancy
Rate
Current

Vacancy
Rate
Prior Qtr

Net
Absorption
Current Qtr
SF

Net
Absorption
YTD SF

Net
New Supply
Current Qtr
SF

Net New
Supply
YTD SF

Under
Construction
Sq Ft

Avg
Rental
Rate

CENTRAL
281

8,865,730

488,374

5.51%

0.00%

488,374

5.51%

5.52%

1,446

1,446

$4.21

FLEX

22

904,329

76,946

8.51%

0.00%

76,946

8.51%

8.24%

(2,450)

(2,450)

$16.57

Total

303

9,770,059

565,320

5.79%

0.00%

565,320

5.79%

5.78%

(1,004)

(1,004)

$6.76

$3.91

WAREHOUSE

AIRPORT/WEST
243

12,468,568

684,326

5.49%

0.00%

684,326

5.49%

5.69%

25,295

25,295

FLEX

48

1,863,727

162,567

8.72%

0.00%

162,567

8.72%

8.91%

3,438

3,438

$6.99

Total

291

14,332,295

846,893

5.91%

0.00%

846,893

5.91%

6.11%

28,733

28,733

$4.30

28,881

28,881

78,319

$4.84

WAREHOUSE

NORTH
195

16,077,197

521,635

3.24%

46,000

0.29%

567,635

3.53%

4.82%

234,689

234,689

FLEX

93

3,741,275

433,607

11.59%

3,300

0.09%

436,907

11.68%

10.53%

(42,867)

(42,867)

Total

288

19,818,472

955,242

4.82%

49,300

0.25%

1,004,542

5.07%

5.90%

191,822

191,822

28,881

28,881

WAREHOUSE

$8.31

78,319

$5.66

$3.93

NORTHWEST
222

13,487,987

841,107

6.24%

0.00%

841,107

6.24%

6.43%

26,206

26,206

FLEX

13

528,593

20,125

3.81%

0.00%

20,125

3.81%

3.24%

(3,000)

(3,000)

$5.96

Total

235

14,016,580

861,232

6.14%

0.00%

861,232

6.14%

6.31%

23,206

23,206

$3.94

WAREHOUSE

503

19,908,264

717,090

3.60%

0.00%

717,090

3.60%

3.86%

50,611

50,611

$4.36

FLEX
Total

97
600

3,751,567
23,659,831

510,117
1,227,207

13.60%
5.19%

0
0

0.00%
0.00%

510,117
1,227,207

13.60%
5.19%

15.70%
5.73%

78,727
129,338

78,727
129,338

$7.91
$5.01

WAREHOUSE

681

44,218,023

2,259,755

5.11%

255,260

0.58%

2,515,015

5.69%

5.56%

77,538

77,538

140,542

140,542

FLEX

191

6,862,375

1,182,963

17.24%

9,852

0.14%

1,192,815

17.38%

17.92%

36,817

36,817

Total

872

51,080,398

3,442,718

6.74%

265,112

0.52%

3,707,830

7.26%

7.23%

114,355

114,355

140,542

140,542

419,760

$4.76

498,079

$4.18

WAREHOUSE

EAST

SOUTH
419,760
-

$4.06
$7.45

CHARLOTTE TOTAL
2,125

115,025,769

5,512,287

4.79%

301,260

0.26%

5,813,547

5.05%

5.28%

415,785

415,785

169,423

169,423

FLEX

464

17,651,866

2,386,325

13.52%

13,152

0.07%

2,399,477

13.59%

13.99%

70,665

70,665

Total

2,589

132,677,635

7,898,612

5.95%

314,412

0.24%

8,213,024

6.19%

6.44%

486,450

486,450

169,423

169,423

WAREHOUSE

498,079

$7.99
$4.84

QUARTERLY COMPARISON AND TOTALS

Q4-13

2,589

132,572,116

8,234,754

6.21%

426,577

0.3%

8,661,331

6.53%

7.65%

1,503,530

3,307,646

19,554

31,554

199,342

$4.76

Q3-13

2,584

132,103,407

9,828,229

7.44%

342,577

0.3%

10,170,806

7.70%

8.22%

704,842

1,804,116

12,000

12,000

109,554

$4.82

Q2-13

2,588

132,193,965

10,859,123

8.21%

320,800

0.2%

11,179,923

8.46%

9.10%

844,061

1,099,274

12,000

$4.82

Q1-13

2,588

132,174,406

11,647,284

8.81%

376,700

0.3%

12,023,984

9.10%

8.50%

275,352

275,352

46,000

46,000

12,000

$4.60

Q4-12

2,721

139,718,727

11,368,747

8.10%

437,923

0.3%

11,806,670

8.50%

9.00%

823,715

1,907,785

46,237

369,114

270,400

$4.75

Q3-12

2,716

138,447,289

12,075,139

8.7%

639,914

0.5%

12,715,053

9.2%

9.7%

709,880

Q2-12

2,713

139,546,710

13,320,871

9.5%

727,169

0.5%

14,048,040

10.1%

9.7%

(464,342)

Q1-12

2,712

140,432,884

13,155,044

9.40%

654,649

0.50%

13,809,693

9.80%

10.00%

265,776

265,776

Q4-11

2,710

140,330,463

13,391,864

9.5%

581,184

0.40%

13,973,048

10.0%

9.9%

(8,290)

9.5%

598,140

0.4%

13,653,964

9.9%

10.3%

937,898

10.1%
10.9%

248,724
405,185

0.2%
0.3%

14,473,220
15,666,169

10.3%
11.2%

11.2%
#REF!

1,192,949
(22,612)

COMPARISON
LEASE RATES
Q3-11
2,709 OF140,315,563
13,351,718
Q2-11
Q1-11

2,708
2,708

140,279,243
140,279,243

14,224,496
15,260,984

Class A & B Existing Buildings

| COLLIERS INTERNATIONAL

64,456

102,421

472,637

102,421

266,693

$4.65

102,421

102,421

220,456

$4.60

2,017,623

14,900

51,220

258,421

$4.43

2,108,235

36,320

36,320

29,900

$4.28

1,170,337
(22,612)

66,220
-

$4.27
$4.27

(157,144)

$4.65

$4.05

$3.25

AVERAGE
CURRENT
RATE

AVERAGE
CURRENT
RATE

CLASS A BULK BUILDINGS - Lease rates derived from a representative set of

newer tilt-up, concrete buildings averaging 250,000 SF with bulk ceiling height
and standard dock door configuration.

P. 2

1,084,070

CLASS B WAREHOUSES - Lease rates derived from a representative set

of facilities from 50,000 SF to 150,000 SF with 20+ clear height and a
functional dock loading configuration.

INDUSTRIAL MARKET REPORT | Q1 2014 | CHARLOTTE, NC

The

2014 INDUSTRIAL LEASE & SALES TRANSACTIONS

PROPERTY

SUBMARKET

TENANT

SIZE (SF)

999 Paragon Way

York

Exel

950,000

1087 Lincoln County Parkway

Lincoln

Room & Board

148,000

10325 Ridge Creek

Southwest

Genco

81,000

Crosspoint II

North

Brooks Equipment Co.

64,800

PROPERTY

SUBMARKET

TENANT

SIZE (SF)

North

LabCorp

24,819

WAREHOUSE LEASES

FLEX LEASES
5900 Northwoods Business Parkway

SIZE (SF)

$ / SF
OR ACRE

Weima America

10,000

$105

Southwest

Pinnacle Films Corporation

178,000

$61

11601 Feuehauf Dr.

Southwest

OSI Properties LLC

53,000

$31

12345 Steele Creek Road

Southwest

InChem Corp.

140,313

$53

PROPERTY

SUBMARKET

BUYER

3678 Centre Circle Drive

York

10701 S. Commerce

225 Mooresville Blvd.- Colliers International

represented both seller and purchaser of the
building located at 225 Mooresville Blvd. in
Mooresville, NC. Toyo Seal was the seller and
Reger Holdings was the buyer. It is a 51,200
SF building situated on 25 acres.

INDUSTRIAL SALES

COMPANY

TYPE

SIZE
(SF)

PARK

STATUS

Eclipse Packaging- Colliers International

represented Eclipse for their first US location
at 2920 Whitehall Park Dr. in Charlotte. The
25,000 square foot facility will be used for
automated filling and assembly line components
for the manufacturing industry.

COMPLETED & UNDER CONSTRUCTION BUILDINGS

996 Paragon Way Bulk Distribution

River Walk

950,000 Completed

Childress Klein

Bulk Distribution

Afton Ridge

360,000 Under Construction

Silverman

Bulk Distribution

Childress Klein

Bulk Distribution

Ridge Creek West

310,960 Under Construction

Trinity Partners

Bulk Distribution

215 International Drive

277,235 Under Construction

Concord Airport Business

Park

400,000 Under Construction

Bold text indicates Colliers International transaction

UNDER CONSTRUCTION

222 Rampart St.- Colliers International

sold the 24,210 SF Headquarters for GMI
to Carolina Capital Investment Partners for
$2,550,000. The building is 100% leased by
Global Medical Imaging.

Demand for Class A

space has outstripped
supply.
Five buildings are
currently under
construction.

STEELE CREEK COMMERCE PARKSouthwest

108,200 SF
4th Quarter 2014 Delivery

P. 3

| COLLIERS INTERNATIONAL

CONCORD AIRPORT BUSINESS PARKConcord

400,000 SF
1st Quarter 2014 Delivery

2900 Gray Fox Rd.- The 45,000 SF

distribution building is 100% leased to WESCO
Distributors and sold for $2.15 million. Colliers
represented Tal Investments, the buyer in the
acquisition.

INDUSTRIAL MARKET REPORT | Q1 2014 | CHARLOTTE, NC

1ST QTR 2014 | Vacant Space By Class

1ST QUARTER 2014 | Net Absorption by Submarket

485 offices in
63 countries on
6 continents

250,000

CLASS A
629,307 SF

200,000

management

Class A

Class B

Class C

EAST

UNITED STATES:
SOUTH

NORTHWEST

50,000

Over 15,800 professionals

NORTH

100,000

AIRPORT/WEST

CLASS B
3,853,861 SF

Charlotte Industrial Team

Greg Copps | SIOR
Managing Partner

(50,000)

Lawrence Shaw | SIOR

Managing Partner

Investment Highlights
The first quarter saw several notable transactions of both multi-tenant flex and bulk industrial
distribution space. The Stockbridge acquisitions represent the highest price per square foot
trades in the multi-tenant flex market since 2007 and are indicative of the continued interest from
regional and national investors in the Charlotte market. Exeter Property Group continued with
its bullish strategy in acquiring Catawba DC and, in doing so, has added another bulk Industrial
property to its southwest holdings. The private client market remains active with the two notable
single tenant sub $5 million trades at healthy cap rates.



PRICE
PROPERTY NAME
SUBMARTRANSACCAP

RSF
PER
ADDRESS

billion in annual revenue

Over 1.46 billion square feet under

CENTRAL

CLASS C
3,729,856 SF

Square Feet

$2.1
150,000

KET

TION VALUE

RSF

TENANCY

RATE

BUYER

Grant Miller
Vice President

Rob Speir
Vice President

Don Moss | SIOR | CCIM

Vice President

INVESTMENT SALES
Catawba Distribu-

South-

tion Center

west

Charlotte Business
Park

Chemway

Arrowridge

South-

Business Park

west

Global Medical
Imaging HQ
Wesco Distribution
Center

Southend
Monroe

$18,000,000 478,000

$37.65

NA

Multi

$10,500,000

$27.08

8.00%

Multi

387,745

$11,100,000

194,553

$57.05

NA

$2,550,000

24,120

$106

NA

$2,150,000

45,000

$47.78

Harris Corners

North

$11,000,000

125,156

$87.89

NA

Harris Ridge

North

$15,500,000

160,354

$96.66

NA

North

$7,500,000

174,506

$42.98

NA

Northridge Business
Center

Group
Partners

Multi

Medalist Properties
JV

Single
Multi
(Flex)
Multi
(Flex)
Multi
(Flex)

Carolina Capital Investment Partners

Tal Investment
Holdings

Adam Russ
Investment Services Group

301 S College Street | Suite 3350

Charlotte, NC 28202
This market report is a research document of Colliers International.
Information herein has been deemed reliable and no representation
is made as to the accuracy thereof. Colliers International-Charlotte,
Inc., and certain of its subsidiaries, is an independently owned and
operated business and a member firm of Colliers International

Stockbridge

Property Consultants, an affiliation of independent companies with

over 482 offices throughout more than 62 countries worldwide.

Stockbridge
Stockbridge

Bold text indicates Colliers International transaction

www.colliers.com/marketname

Justin Smith
Industrial Specialist

Equity Industrial

(Flex)
Single

9.20%

Exeter Property

Accelerating success.