St. Joseph County

Transcription

St. Joseph County

RETAIL
OFFICE
ST. JOSEPH COUNTY
BRADLEY COMPANY
MULTI-HOUSING
FUTURE REAL ESTATE TRENDS
MARKET STUDY
INDIANA | MICHIGAN
SINCE 1978
COMMERCIAL REAL ESTATE
INDUSTRIAL
INSIGHT & ANALYSIS 2012 - 2013
INSIGHT + ANALYSIS
INCE 197
ST. JOSEPH COUNTY
www.bradleyco.com
CONTENTS
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ST. JOSEPH COUNTY...........................................................................................................................
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ELKHART COUNTY.............................................................................................................................
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KOSCIUSKO COUNTY.......................................................................................................................
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MARSHALL COUNTY.........................................................................................................................
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LAPORTE COUNTY.............................................................................................................................
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PORTER COUNTY................................................................................................................................
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LAKE COUNTY.......................................................................................................................................
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SOUTHWEST MICHIGAN...............................................................................................................
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KALAMAZOO COUNTY..................................................................................................................
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OUR PROFESSIONALS........................................................................................................................
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OUR COMPANY.....................................................................................................................................
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UNDERWRITERS....................................................................................................................................
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LETTER FROM THE PRESIDENT...................................................................................................
RESEARCH AND ANALYSIS
Mary Willkom
LAYOUT AND DESIGN
Alyssa Wertz
INSIGHTLauren
+ ANALYSIS
Brown
NEW NAME SAME COM
Thanks to the combined efforts of many individuals within our
company, along with the support of our underwriters 1st Source
Bank, Barnes & Thornburg, Great Lakes Capital, Lake City Bank,
Krieg DeVault, First State Bank, Centier Bank and KeyBank, we
are proud to present our 20th annual market study and the first
to be branded as Bradley Company.
Until recently, we had been operating under various business
units: CBRE|Bradley, Bradley Residential Management and
Bradley Maintenance Services. This spring, we had a unique
opportunity to consolidate these business units under one
single brand name in order to better serve our clients by
growing as they grow. We are now simply known as “Bradley
Company.”
Our firm has been a part of the local business community for
35 years, and we remain the same team of seasoned, dedicated
professionals, providing clients with earnest and responsive
services to execute on our clients’ real estate needs.
This brand enhancement will allow us to:
• Better streamline our client experience
• Renew our emphasis on local markets
• Provide a more personal and specialized feel for clients
• Grow with our clients without geographic restriction
With many of our clients growing and expanding into new
markets, we at Bradley Company feel the need grow with our
clients. It is with that in mind that we announce our newest
market, Fort Wayne. In order to maximize our client experience
in Fort Wayne, we have decided to merge with the best real
estate firm in that market: NAI Harding Dahm. In the future,
clients in our existing markets doing business in Fort Wayne will
be able to conduct the entire transaction within the purview of
Bradley Company rather than needing to find a real estate firm
in Fort Wayne. This allows for seamless market-to-market real
estate transactions.
Following this merger, our combined entities will now:
• Have eight offices located in South Bend
(headquarters), Elkhart, Fort Wayne, Goshen,
Kalamazoo, Merrillville, Michigan City and Warsaw
• Manage over 7 million square feet of office, medical
office, industrial and retail space
• Manage over 2,300 multi-housing units
• Have nearly 40 full-time brokers
• Retain nearly 250 total employees and brokers
This market study provides analysis on the performance
of our markets relating to current conditions and
indications of potential trends in the commercial real
estate market.
Like much of the preceding year, 2012 continued on
a path of positive momentum. Unemployment was at
a 4-year low by the end of the year, companies are
increasing production and overall business in the area
saw a considerable supply of various opportunities
entering the market.
With an increase in activity among both new and existing
users, the industrial market showed signs of modest
growth and stability. As the market continues to improve,
it is anticipated that speculative construction will
reemerge and eliminate the current struggle of finding
quality product to meet potential users’ needs.
A shift from renovations to expansions and new
developments was the driving force of the retail market
in 2012. The area saw the start of several built-to-suit
projects, ventures that were relatively nonexistent over
the last several years. Another shift was the increase in
activity among big-box users. Several retailers, including
Kohl’s, Meijer, Whole Foods, Big R, Ace Hardware,
MPANY
ST. JOSEPH COUNTY
TJ Maxx and HH Gregg, migrated into the area either with new construction
projects or absorbing existing space. As the retail sector continues to show
signs of positive absorption, 2013 will continue to bring increased asking rates
and a reduction in the amount of rent concessions offered by landlords.
On a similar path from 2011, the office market witnessed users continuing to
excercise caution and maintain focus on consolidation and upgrading rather
than expansion. Recent job creation will help alleviate market uncertainty and
volatility and result in an increase in demand for office space. The availability of
Class A product puts new and existing users in a position to take advantage of
quality space at lower than average rates.
The multi-housing market was the top performing sector in 2012 and
continues to thrive in 2013. Occupancy rates are at levels significantly higher
than 2011 and higher than that of rates prior to the economic downturn. All
markets experienced an increase in rental rates and a decrease in concessions
offered to tenants. Over $50 million was invested in new construction and
renovation projects across all aggregated markets. The multi-housing market
has experienced rapid growth, indicative of a potential evolution away from
home ownership, especially among the younger generation.
As we move into the second half of 2013, we have seen the continued
stabilization of all sectors. New construction activity has increased, property
values and leasing rates are leveling off and the overall sense of wariness is
beginning to diminish. We are confident that our region will effectively sustain
growth and strengthen during the continued challenges and adjustments, taking
full advantage of the opportunities that the remainder of 2013 has to offer.
bradley j. toothaker, cpm, sior
President and CEO
INSIGHT + ANALYSIS
At-A-Glance
Fourth largest county in Indiana
The largest industries within the county are
health care, education, small business and tourism.
Overnight parcel delivery logistics from
South Bend serve 40.2 million people with
one-day ground service.
The South Bend Regional Airport serves over
one million passengers annually, making it the
second-busiest airport in Indiana.
7
$36m
$3m
# of newly constructed
restaurants in 2012
multi-housing
investment in 2012
increase in total value of
industrial construction
projects from 2011 to 2012
Transportation
The South Bend Regional Airport is the second-
The South Bend Public Transportation Corporation
busiest airport in Indiana, serving over one million
(Transpo) provides local bus service. Six additional
passengers annually. The airport also serves as a
bus lines provide nationwide service.
rail service station for the South Shore Railroad.
The South Shore Railroad provides daily east-west
The Indiana Toll Road (I-80/90) extends 157 miles
transportation to 19 destinations. It connects with the
across Northern Indiana, running parallel to the
Metra, which provides additional service to 10 north-
Michigan border. US Highway 31 links the area to
south destinations within Chicago. Amtrak provides
Michigan and Indianapolis and also connects to
two daily trips to New York, Boston and Washington,
I-94, a direct route to Chicago and Detroit. Other
and service to other destinations nationwide.
US and State Highways intersecting the area
include 6, 20 and 2, 4, 23, 104, 331, and 933.
4
St. Joseph County is the fourth-largest county in Indiana with a
population of 266,314. The largest cities in the county are South Bend
and Mishawaka, with populations of 102,808 and 46,851, respectively. A
combination of air, rail and road access connects St. Joseph County to
various regional and national markets, making it the hub of North Central
Indiana. The County draws users within the fields of industrial, technology,
retail, healthcare and education.
Education
In addition to the University of Notre Dame,
Diamondbacks. The 5,000-seat stadium recently
St. Joseph County benefits greatly from several
underwent a $10 million renovation project to
other top-notch post-secondary education
enhance the game experience and also open the
institutions including Saint Mary’s College,
stadium to outside events, including concerts.
Indiana University South Bend, Bethel College,
Holy Cross College and Trine University.
Other major tourist draws include the Studebaker
Furthermore, there are several schools in the
National Museum, Potawatomi Zoo, Morris
area that offer more specific career and training
Auditorium and the East Race Waterway, the
opportunities, including Ivy Tech, Brown
nation’s first artificial whitewater course.
Mackie College and Michiana College.
Shopping
local demographics
The county provides an abundance of shopping
2013 Estimates
opportunities within the University Park Retail
Population
266,314
Households
102,978
feet of retail, office and hotels, the trade area is
Average Household Income
$56,510
the second-largest retail trade area in the State.
Average Housing Value
$140,575
Employed Population
123,770
Trade Area, one of the most dominant retail
markets in the State. With over 6.5 million square
Recreation and Entertainment
Located in Downtown South Bend, Coveleski
Stadium is home to the Silver Hawks, a
Class A minor league baseball affiliate of the Arizona
5
ST. JOSEPH COUNTY
IND U STRI A L
With its diversity of product, proximity to
regional highways and interstates, as well as
accessibility to major rail lines and airports, St.
Joseph county continues to be an ideal location
for local, national and international industrial
users. The Blackthorn Economic Development
Area on South Bend’s northwest side remains the
main industrial submarket within the County.
The BEDA encompasses over 10 million square
feet of industrial space and includes several
industrial parks such as the Airport Industrial
Park, AmeriPlex Industrial Park, Toll Road
Industrial Park, Blackthorn Corporate Park
and Blackthorn West. Smaller submarkets are
positioned immediately south of Downtown
South Bend, including Ignition Park, Oliver
Plow Works, Monroe Business Park and Burnett
Industrial Park. Other industrial areas include
Southwest Mishawaka on 12th Street, Clover and
Home Streets, east of the City and New Carlisle.
Vacancy and Asking Rates
The industrial vacancy rate for St. Joseph
County increased throughout 2012, ending
the fourth quarter at 12.6 percent, an increase
of approximately one percent from the start
of the year. All areas of the industrial sector
experienced an increase in the amount of
available square footage, with warehouse and
distribution experiencing the greatest increase,
adding approximately 400,000 square feet.
Despite the amount of available product, being
able to match product with the prospect’s needs
continues to be an issue, as the amount of quality
space remains limited and spec projects remain
nonexistent. 2012 did, however, bring with it an
improvement in the level of activity, with users
looking to expand or locate within the area. As
users become more confident in the overall
economy and less hesitant to react, the St. Joseph
County industrial market is expected to gradually
rebound at a moderate pace through 2013.
INDUSTRIAL AVAILABLE SQ. FT.
6,000,000
5,000,000
Manufacturing
4,000,000
Warehouse
3,000,000
Flex Space
Other Industrial
2,000,000
TOTAL
1,000,000
0
1st
2nd
3rd
4th
Despite original assumptions that asking rates would trend
upward in 2012, rates stayed at comparable levels to 2011.
Average asking rates for general-industrial and manufacturing
space range from $2.85 to $3.75 per square foot, triple-net.
Industrial-flex space ranges from $4.00 to $5.00 per square
foot, triple-net. Warehouse and big-box distribution space
ranges from $3.50 to $4.50 per square foot, triple-net. The gap
between landlord and tenant’s market expectations has slowly
narrowed and it is expected that actual rates in 2013 will be
more in line with those before the economic downturn.
Transactions
The number of industrial sale transactions increased
slightly throughout 2012; however, the number of lease
transactions decreased approximately 30 percent as a result
of less new-tenant activity bringing the total number of
industrial transactions down from the previous year. Despite
the dip, industrial transactions are expected to increase
through 2013 at a measurable pace, as we continue to see
new and expanded user activity within the market.
INDUSTRIAL TRANSACTIONS
60
50
40
Lease
30
Sale
20
10
0
2008
6
2009
2010
2011
2012
New Construction
New-construction projects in the St. Joseph
County industrial market totaled over 250,000
square feet with a value of over $15 million in
2012. Despite a 50,000 square foot decrease in new
construction from 2011 to 2012, the total value of
new-construction projects in 2012 increased by
about $3 million. Significant projects included
the new 45,000 square foot Data Realty center, the
132,000 square foot addition to Tire Rack and the
30,000 square foot expansion of Lock Joint Tube.
Growth and Development
Tire Rack, a South Bend-based national
performance tire, wheel, and accessory distributor,
added 132,000 square feet of warehouse space
to its 532,000 square foot operation located at
7101 Vorden Parkway along the Indiana Toll
Road and also constructed a separate, standalone 36,000 square foot, three-story office
building on-site adjacent to its test track.
The project value totaled $10 million and
created an additional 200 full-time jobs.
Data Realty, LLC completed construction on a
45,000 square foot data center in South Bend’s
Ignition Park. The $25 million data center was the
first tenant in the new park and employs 20 people.
FDC Graphic Films Inc. completed a 60,000
square foot expansion of its building on William
Richardson Drive. As a result of continued growth,
FDC Graphic Films Inc. expanded its operations
and hired several additional employees.
Steel tubing manufacturer Curtis Products
announced plans to occupy the former Bosch
property on North Bendix Drive. The South Bendbased company was approved for a 12-year lease
by the South Bend Redevelopment Commission
and expects to move into the site in May. The
Bosch site, which consists of two buildings totaling
more than 350,000 square feet, will allow the
Company’s 325 employees to locate at one site
instead of the four buildings they currently occupy.
North American Composites Co., a division of
Interplastic Corporation of Minnesota, has relocated
to a chemical distribution facility in Mishawaka.
Renovations were completed on the 50,000 square
foot facility located at 1460 E. 12th Street.
The 25,000 square foot expansion to South Bend-based
Elkhart Plastics Inc.’s existing 83,000 square foot facility
located at 3300 N. Kenmore Street began in October. The
$3.8 million investment will create nearly 50 jobs by 2015.
The expansion is expected to be completed in early 2013.
Steel tube maker, Lock Joint Tube, completed
a 30,000 square foot expansion of its facility on
Walnut Street in South Bend. The $9 million
investment created over 10 full-time jobs.
Michigan-based automotive parts manufacturer,
Federal-Mogul Corp., expanded its St. Joseph
County operations. The Company invested nearly
$22 million in upgrades at the South Bend facility.
A consolidation by Champion Windows Manufacturing
resulted in an expanded market and more employees
for the local operation at 715 W. Edison in Mishawaka.
Because the Fort Wayne location was one of seven
stores closed, the market of the Mishawaka location
was expanded to compensate for the loss.
Manufacturing company RACO relocated its
distribution center from South Holland, IL to
South Bend. The Company invested $1.5 million
to lease, renovate and equip the 100,000 square
foot facility in the Ameriplex complex.
Plans have been announced to restore the 800,000
square foot former Studebaker factory building located
just north of Ignition Park in South Bend. The building
will be converted to a mixed-use space that will
include data centers, high-tech office space and other
uses. The area, which will be called the Renaissance
District, has approximately $3.7 million in private
funds invested and, in a new partnership with the
City of South Bend, investors have committed to at
least $17.5 million total to renovate and rehabilitate
the industrial space and surrounding area.
INSIGHT + ANALYSIS
7
OFFIC E
The South Bend Central Business District and
Mishawaka’s Edison Lakes Corporate Park
remain the two main office submarkets within
St. Joseph County. Blackthorn Corporate Park,
located on the northwest side of South Bend, and
Foundation Center, located near the University
Park Retail Trade Area, also encompass a
substantial amount of professional office space.
Similar to 2012, the healthcare industry continues to
play a dominate role in the office market. Medical
users continue to vie for space proximal to
Saint Joseph Regional Medical Center and
Memorial Hospital. A trend has also emerged with
medical office users beginning to absorb traditional
office space or even retail space, in particular space
with good visibility and accessibility, rather than
in specialized and concentrated medical centers.
The vacancy rate for South Bend’s suburban market
increased slightly over the last two quarters of the year,
with a bump of just over 1 percent from the start of 2012,
while the Central Business District experienced a 3 percent
decrease. Mishawaka’s suburban market followed a similar
suit to South Bend’s CBD with a decrease of nearly 2.5
percent and, despite a slight increase at the end of the first
quarter, Mishawaka’s Central Business District remained
steady through the year with approximately 25,000 square
feet of actively marketed space. Office vacancy rates in
2013 are expected to continue to improve as the market
sees slow-but-steady absorption of Class A office space
coupled with the lack of new office construction.
OFFICE ASKING RATES (GROSS)
Central Business
District
Suburban
Class A
$17.75- $22.50
$18.00-$25.00
Class B
$9.75-$15.50
$10.50-$15.00
Despite a decrease in the overall vacancy, average asking
Despite a slight increase of actively
marketed space
SB/Mishawaka Office Vacancy‐ graph 1
rates for office space within both the Central Business
over the first three quarters of the year, the overall
1st
2nd District
3rd
4th markets remained at similar levels to
and suburban
office vacancy rate
decreased
to
approximately
2012. As the
amount of
quality space available continues
Mishawaka‐ CBD
15.5%
18.3%
18.3%
18.3%
9 percent by the end of the year, down over 170,000
to decrease,
it is anticipated
South Bend‐ CBD
17.0%
15.2%
15.2%
14.0%that landlords will have the
square feet from the 4th quarter of 2011 and over
opportunity
to
insist
on
higher rates and tenants will
Mishawaka‐ Suburban
15.3%
14.7%
14.1%
13.7%
250,000 square feet from the start of the year.
begin to see a decrease in leasing incentives provided.
South Bend‐Suburban
13.2%
11.0%
12.9%
14.7%
OFFICE VACANCY
20.0%
18.0%
16.0%
Mishawaka- CBD
South Bend- CBD
14.0%
Mishawaka- Suburban
12.0%
South Bend-Suburban
10.0%
8.0%
1st
8
2nd
3rd
4th
ST. JOSEPH COUNTY
OFFICE TRANSACTIONS
100
90
80
70
60
Leases
50
Sales
40
30
20
10
0
2009
2010
2011
2012
Transactions
As 2011 came to an end, the St. Joseph County office
market began to see an increase in overall transactions.
The trend continued through 2012, with both sale and
lease transactions increasing to levels achieved before the
economic downturn. Leasing continues to generate the
most activity with the office market, with 55 percent of
lease transactions resulting from new activity, 41 percent
from renewals and 5 percent from expansion projects.
New Construction
New office construction projects within the County for
2012 included less than 20,000 square feet, with a value
of just over $3.2 million. New-construction projects
included the Physicians Immediate Care $1.25 million,
4,100 square foot facility on Cleveland Road, Stoller
Dental’s 3,600 square foot facility on US 31 South and
Davita Dialysis’s $1.6 million facility on Trinity Place
in Mishawaka. Despite the lack of new construction,
a significant amount of office building permits were
filed throughout the year. Many office users focused
on their existing space and completed expansion and
remodeling projects. The majority of these projects
were centered around the medical office sector and
included a $500,000 remodeling project completed by
Allied Family Medicine on Main Street in Mishawaka;
Granger Community Medicine completed a $900,000
remodeling project on State Road 23 in Granger and
Memorial Hospital completed several remodeling/
alteration projects totaling more than $6 million.
Office Growth and Development
The former Wells Fargo building, now
Citizen’s Bank and Trust, located at 112 W.
Jefferson Boulevard in Downtown South
Bend, is currently undergoing extensive
renovation work. Renovations on the
six-story, 50,000 square foot building are
expected to be completed by the beginning
of third quarter, with plaza development
scheduled to be completed some time
this summer. New tenants to the building
include Bradley Company, Great Lakes
Capital Development and Tango Design.
Centier Bank has announced future plans to
expand its local Mishawaka location to a fullservice operation within the next three years.
The Company currently has 45 retail locations,
two business banking centers and a loan
production center all within Indiana. Preliminary
plans include a free-standing building
within the Edison Lakes Corporate Park.
St. Joseph Valley Metronet relocated from
the third floor of the Commerce Center to a
vacant storefront in the 100 block of South
Michigan Street. Metronet signed a four-year
lease with two, three-year options for renewal.
Brandywine Development Corp. has gained
initial approval to rezone 3.62 acres of land
at the corner of Indiana State Road 23 and
Brick Road in Granger for the construction
of two 8,000 square foot office buildings.
Bayer Healthcare expanded its occupancy at its
current location, 3930 Edison Lakes Parkway.
Due to the expansion, two tenants relocated
to other office spaces within the Edison Lakes
Office Park. Newmark Grubb|Cressy and Everett
relocated into 9,680 square feet in the Mutual
Bank Plaza building located at 4100 Edison
Lakes Parkway and Indiana Trust relocated into
9,614 square feet at 4045 Edison Lakes Parkway.
INSIGHT + ANALYSIS
9
Accounting firm H.J. Umbaugh and Associates signed
a lease in Mishawaka’s IronWorks building. The
accountancy firm was the first tenant to sign a lease at
the 17,000 square foot riverfront building constructed
in 2008. H.J. Umbaugh and Associates will occupy
the building’s entire third floor. All 15 of the firm’s
employees relocated from their previous location
in Plymouth to the 5,790 square foot office space.
R E TA I L
Medical Office Growth and Development
Two walk-in urgent-care centers announced plans to
open area locations on Cleveland Road in Mishawaka.
Physicians Immediate Care Center prepared a site
north of University Park Mall, next to 1st Source
Bank, for the construction of a 4,200 square foot
facility that is expected to open its doors for business
this spring. Doctors Express occupies 3,000 square
feet of space in Mishawaka’s Heritage Square.
Afdent Dental Services has announced a building
project on Douglas Road in Mishawaka. The
dental company is constructing a two-story
dental center consisting of ten exam rooms, a
reception and lobby area, lab rooms, offices,
a break room and a conference room.
The Department of Veterans Affairs health clinic
opened in a portion of the empty Gates Toyota
building on Western Avenue. The City paid
$1.9 million for the 13 parcels and another
$14 million to prepare the building and grounds
for the VA to operate the clinic. The VA will pay
$280,000 annually to lease the building and the City
will reap another $60,000 per year in lease payments
from the Gates service center still in operation.
Granger Community Medicine completed work
on its $1 million expansion. The medical office
expanded the existing 2,000 square feet of space
with an extra 5,000 square feet at the office location
at 12563 Indiana State Road 23 in Granger. Plans
include a larger waiting room, expanded exam
rooms, as well as added space for X-ray.
10
The University Park Retail Trade area, located along
Grape Road and Main Street in Mishawaka, continues
to be a regional retail destination, attracting shoppers
from throughout the 11-county Michiana region. The
area is anchored by the 923,000 square foot regional
Simon-owned
University Park
Mall, which also
features the Village,
an outdoor lifestyle
center component. A
long list of big-box
retailers in the area
includes Walmart,
Lowe’s, Bed Bath &
Beyond, Gordman’s,
Kohl’s, Target, Meijer,
Best Buy and Dick’s
Sporting Goods.
Tenan
have the
landlords
flexible in
Eddy Street
Commons, adjacent
to the University
of Notre Dame,
features tenants
including Fairfield
Inn & Suites, Old National Bank, Chipotle, Hot
Box Pizza, Anytime Fitness, Camellia Cosmetics,
Five Guys Burgers and Fries, Jamba Juice, Nicolas J
Salon, Outpost Sports, Urban Outfitters, McAlister’s
Deli, Brothers Bar and Grill and Biggby Coffee.
ST. JOSEPH COUNTY
City Plaza, a three-phase upscale shopping center in
Granger, remains another location of choice for retailers and
restaurants within the area. Tenants within the shopping
center include Tilted Kilt, Ruth’s Chris Steakhouse,
Anytime Fitness, Papa John’s and Temper Grill.
Toscana Park and Heritage Square, both located on Gumwood
Road in Mishawaka, continue to generate interest within the
nts continue to
advantage as
continue to be
n negotiations
area. Less than a year ago, Toscana Park was at a 30 percent
occupancy rate and is now nearly fully occupied. New
tenants to the development in 2012 included Tony Sacco’s
Pizza, Progressive Insurance, Cross Fit and Zumba Fitness.
The City of South Bend experienced a significant increase
in businesses investing in the downtown area in 2012.
Downtown South Bend’s third annual Holiday PopUp Shop program, a program designed to fill vacant
storefronts for a temporary period of time during the
holidays, produced several permanent businesses.
These businesses include South Bend Brew
Werks, Studio 217 by the Acting Ensemble
Stage Company and Bicycle Gallery. Edible
Arrangements also located within the
downtown district in Michigan Street Shops.
Plans have been approved for a brew pub to
locate within the City’s historic State Theater,
and LaSalle Grille has announced plans to open
a gastropub on the restaurant’s third floor.
The DoubleTree by Hilton Hotel underwent
major renovations and converted the former
Sean O’Casey’s Irish restaurant to a fullservice Starbuck’s. Additionally, the City
has taken advantage of state legislation to
develop a Downtown South Bend Municipal
Riverfront Development District, which
makes liquor licenses available to dining,
entertainment and cultural establishments
for $1,000 if they are located within 1,500
feet of the St. Joseph River. Thus far, Chicory
Café , Ciao’s and The Exchange have
acquired liquor licenses through the new
program, with four others in the works.
The south side of South Bend is another
concentrated retail area within the County,
with Erskine Village and Erskine Commons.
The new US 31 entrance to South Bend is
taking shape and is expected to further
facilitate development as it nears completion.
Retailers, such as Dunkin Donuts, continue to
show interest and expand in the area due to
a lack of availabilities in the past and Southside retailers remain optimistic about these
changes and the enhanced possibilities.
INSIGHT + ANALYSIS
11
Despite positive signs through 2011 and into 2012, the St. Joseph
County retail market struggled through the last two quarters of the
year. With over 1.3 million square feet of retail space available, the
vacancy rate at the end of the fourth quarter was approximately
6.4 percent, an increase of over 2 percent from the end of 2011.
The movement toward local ownership that started in 2012 is
expected to continue into 2013, with real potential for success
as more people are participating in the “shop local” effort.
RETAIL ASKING RATES (NNN)
Type
Range
New Construction
(1,000-5,000 SF)
$16.50-$22.00
2nd Generation
(1,000-5,000 SF)
$8.00-$11.50
2nd Generation
(Mid/Big Box)
$5.50-$8.00
As expected, with an increase in vacancy, average asking rates
remained relatively flat compared to 2011. There continues to be
a significant amount of mid-size and second-generation spaces to
be filled and, with such little demand, landlords have no leverage
to increase rates or decrease the amount of concessions offered.
Transactions
The leasing market continues to be more dominant than the
sales market within the retail sector. With an increase in vacancy,
tenants continue to have the advantage, as landlords continue
to be flexible in negotiating lease rates, terms and concessions.
New Construction
Approximately 30,000 square feet of new retail product was
planned for St. Joseph County in 2012, resulting in an investment of
over $7.5 million. The amount of square footage planned was down
over 10,000 square feet from 2011, but the total investment increased
significantly. Projects were centered around the restaurant industry,
including two Dunkin Donuts, Cheddar’s Casual Café, Panda
Express and Golden Corral. The area is beginning to see more “built
to suit” projects as the demand for new-construction retail space has
increased. 2012 also saw construction of the area’s first completely
speculative building in about five years. The 10,000 square foot
building is located in Mishawaka’s Heritage Square. Until this year,
developers had been reluctant to construct new buildings without
signed tenants in place.
12
As the enconomy has shifted in a more
positive direction, developers are once
again confident that there will be a
demand for unoccupied space.
The once-vacant Comfort Suites outlot on
Indiana 933 now contains a 6,240 square foot
multi-tenant building, constructed by Great
Lakes Capital Development. Tenants in the
building include Dunkin Donuts, Jimmy
Johns, Little Caesar’s and Sport Clips.
Noodles & Company opened its first
area location at Princess City Plaza on
Grape Road in Mishawaka. The restaurant
renovated the 3,286 square foot space
formerly occupied by Quizno’s.
Whole Foods opened April 2013 in the
former Borders Books and Music building
on Grape Road, occupying nearly 24,000
square feet. The high-end grocery
chain employs 90 to 100 workers.
7-Eleven opened this fall at Eddy Street
Commons in the 2,800 square foot
space formally occupied by Anytime
Fitness near Old National bank.
Golden Corral constructed a 400-seat
restaurant on the southeast corner of Main
Street and Douglas Road in Mishawaka.
The restaurant opened in December.
Cheddar’s Casual Café opened in August
at the northeast corner of Main Street and
Edison Lakes Parkway in Mishawaka.
Construction on the 8,000 square foot
restaurant began last November.
Holladay Properties announced
that a Hampton Inn & Suites hotel
will be constructed in Mishawaka’s
Heritage Square retail plaza.
ST. JOSEPH COUNTY
Renovations began at the DoubleTree by Hilton
in Downtown South Bend. The Sean O’Casey’s
restaurant was converted to a full-service
Starbucks. The Great American Grill became
Baker’s Bar and Grill, a Studebaker-themed
full-service restaurant open for breakfast, lunch
and dinner, and work began on the upstairs
meeting space including a ballroom and several
smaller breakout rooms. In total, $13 million has
been invested to renovate the hotel building.
Panda Express opened a free-standing
restaurant with a drive-through on the Meijer
outlot on Grape Road in Mishawaka.
Edible Arrangements opened two area locations
the first at 7225 Heritage Drive, Suite 230 in
Mishawaka and a second location in Downtown
South Bend in Michigan Street Shops.
PROPERTY STATISTICS*
Number of Properties
Total Units
The multi-housing sector of the commercial real
estate industry has been a top-performing line
of business in the past year. St. Joseph County
multi-housing trends have followed closely
those on the national level. New multi-housing
construction has increased and the area has
seen a significant return of interest in urban and
downtown living. A few major trends have been
the driving force for the success of the multihousing industry this past year. These trends
include a renewing interest in downtown living,
a rise in college and university enrollment and
financial difficulty following the great recession.
Due to the continued decline in single-family
housing values as well as a renewed desire
among the younger generation to live in urban
and downtown areas, and a more transient
workforce, it is no longer the “American Dream”
to own a home. These factors, coupled with
increasing employment levels, are driving
demand for apartments across all classes,
buoying both occupancy and rental rates.
11,531
Average Units
329
Average Occupancy Rate
94.20%
Smallest Property
16 units
Largest Property
1,134 units
Earliest Year Built
1914
Latest Year Built
2012
Average Year Built
1981
Rent and Occupancy
Market fundamentals continue to improve, evidenced by
the decline in vacancy and overall increase in rental rates
as well as new construction, creating a positive outlook
for the St. Joseph County multi-housing market. Market
occupancy increased from 92 percent in 2011 to 94.2
percent in 2012.
Average monthly apartment rates significantly increased
from 2012, an average of $15 for one-bedroom units, an
average of $50 for two-bedroom units, and an average of
$118 per month for three-bedroom units. One noticeable
trend driving the increase in monthly rental rates for
three-bedroom units is an increase in the number of
families utilizing three-bedroom apartment units, as
opposed to individuals, rather than opting for the more
traditional single-family home. With the increase in
demand for three-bedroom units, landlords have had
the ability to increase rental rates on these units.
M ULT I -HOU S I NG
35
MULTI-HOUSING APARTMENT RATES
Apartment Size
Range
Average
1 Bedroom
$395-$1,400
$621
2 Bedroom
$495-$1,890
$813
3 Bedroom
$640-$2,655
$1,114
INSIGHT + ANALYSIS
13
Renewed desire among t he
younger genera tion to live in
urban and downtown areas
New Construction
Transactions
The amount of new multi-housing construction
significantly increased from 2011 to 2012.
Approximately $36 million in new multi-housing
developments was invested in St. Joseph County
in 2012. Projects include The Belfry, University
Edge, River Race Townhomes and Irish Flats.
The majority of the ongoing projects are focused
primarily around the University of Notre Dame
in South Bend but have extended to Downtown
South Bend, as well as some mostly single-family
residential areas in the Granger/Mishawaka area.
Several significant transactions occurred in 2012, an
indication that the investment multi-housing market
has begun an earnest rebound in St. Joseph County.
Bittersweet Pointe, a conventional 116-unit complex,
was acquired for $4.75 million in January. Bittersweet
Pointe was 91 percent occupied at the time of the
transaction. Madison Apartments, a 29-unit apartment
operated as a non-profit with ICHDA subsidies, was
acquired in June for $750,000. Madison Apartments was
100 percent occupied at the time of the transaction.
MULTI-HOUSING BUILDING PERMITS
$40,000,000
$35,000,000
$30,000,000
$25,000,000
$20,000,000
$15,000,000
$10,000,000
$5,000,000
$0
2009
14
2010
2011
2012
ST. JOSEPH COUNTY
The 310-unit conventional property,
Candlewood Apartments & Townhomes,
sold in August for $14,250,000 with a 4.04
percent cap rate. Candlewood was 92 percent
occupied at the time of the transaction.
Monroe Park Apartments sold for $1.5 million
with a cap rate of 4.55 percent in March of
2012. Multi-housing transactions for St. Joseph
County totaled more than $20 million in 2012.
Ground was broken on an upscale apartment
complex, The Residences of Toscana Park.
Once finished, the development will feature
approximately 12 buildings with a total
of 100 units including one, two and three
bedrooms, most of which will include a den
option. The units are expected to range in
size from 960 square feet to 1,530 square
feet and are expected to cost anywhere from
$1,250 to $2,168 per month. The luxury
units will include a direct-access attached
garage, vaulted ceilings, granite countertops
and stainless steel appliances. A swimming
pool, fitness center and clubhouse will
also be among the property’s amenities.
A $7.3 million renovation project at Main
Junior High Apartments on Lincoln Way
West in Mishawaka began in early 2012.
The four-story building, built in the 1920s
as a high school and then later converted
into a furniture store, was rehabilitated
into 32 low-income, senior apartments. The
apartment building houses low-to-moderate
income tenants, 55 and older. The property
was purchased by the City of Mishawaka
in 2009 for this adaptive, re-use project.
Construction is underway on Irish Flats, a
$9 million student housing project at Dunn Road
and Burdette Street near the University of
Notre Dame. The developers are constructing three
separate, two-story buildings that will include
60 units and house about 140 total students.
Construction is underway on The Belfry, a new
18-unit student housing development planned for
Notre Dame Avenue in South Bend. Construction
on the 16,800 square foot complex began in
October and is scheduled to be complete by early
summer 2013. Each unit will include furnishings
and a 50-inch, flat-screen TV. Tenants will be
required to pay approximately $700 per month.
The multi-million dollar renovation project of
the 54-unit apartment complex near Ivy Tech
Community College, Heritage Homes Southeast,
spearheaded by The South Bend Heritage
Foundation, was completed this year. Improvements
to the affordable rental units located at 505 E.
Broadway in South Bend included new roofs,
flooring, cabinetry, water-conservation toilets and
showerheads as well as energy-star-rated furnaces,
air conditioners, windows, doors and programmable
thermostats. A new office and community room
were also part of the renovation work.
Income-based, senior-living complex Penelope
60 Apartments moved the first of its tenants
in this year. The 50-unit apartment complex is
located on Merrifield Avenue near Ninth Street in
Mishawaka and is operating on money from the US
Department of Housing and Urban Development.
Construction began on University Edge, a
$25 million student housing development located
off State Road 933 in Roseland. The three-story,
10-building complex will include a 24-hour fitness
center, heated swimming pool, game room, grilling
area and cyber café. Each unit features wood flooring
and a washer and dryer and comes furnished.
INSIGHT + ANALYSIS
15
At-A-Glance
Elkhart County is a national leader in logistics,
as its location in the State of Indiana offers the
advantage of being within a day’s drive of 70
percent of the US population.
Elkhart’s cost of living is significantly lower than
most of the Midwest and 37 percent less than
Chicago.
Elkhart County ranks #2 in Indiana (behind
Indianapolis/Marion County) for intellectual
property and new patents. The County boasts its
unique entrepreneurial business climate.
Elkhart County is one of the fastest-growing counties in Indiana.
The County provides its 200,504 residents with a rich cultural and rural
agricultural heritage. The highly encouraged entrepreneurial spirit, combined
with the strong network of supply industries, presents a dynamic business
climate to residents and newcomers. The area has a growing number of
industrial and manufacturing opportunities, supported by its skilled labor
force, low business costs and development of technology. The city of Elkhart
is known as the “RV Capital of the World” and is the birthplace of the vision
and innovation of many products making it one of the county’s three thriving
cities.
Transportation
The Michiana Area Council of Governments
Major highways serve the area, including the Indiana
developed and manages Elkhart’s Heart City
Toll Road I-80/90 which has four exits in Elkhart County.
Rider and Goshen Transit Service. The transit
The railroad switching yard is the second largest
systems operate 24 hours a day, seven days a
freight classification yard in the world. Thirty national
week. The Interurban Trolley provides three
trucking companies provide services to the area.
fixed routes between Goshen, Elkhart and major
areas in between. The city of Elkhart is a base for
Greyhound bus services to major cities nationwide.
16
Education
With more than nine higher educational facilities, the
Museums, parks, lakes, golf courses, and hiking
region has some of the most acclaimed schools in the
and biking trails are just a few of the county’s
nation. Located directly within the borders of Elkhart
many recreational amenities. The newly restored
County is Goshen College, one of the nation’s top
and expanded Lerner Theatre seats 1,000 and
liberal arts schools. There is also an Ivy Tech campus
not only serves as a performing arts complex but
and the Associated Mennonite Biblical Seminary.
contains a banquet hall and classroom space.
Shopping
Located within the Amish Country, Heritage Trail
local demographics
offers a variety of shopping experiences, including
2013 Estimates
artisan shops, boutiques, and small town stores with
Population
200,504
novel merchandise. Concord Mall is the home of over
Households
71,129
are national brands. This consumer-frequented area
$45,390
has the highest traffic counts in Elkhart County.
$150,413
60 different retailers and services, many of which
Employed Population
5.1%
115K
7.4%
decrease in
industrial
vacancy rate
from 2010
to 2012
size (SF) of
Elkhart’s
Shoppes on
Six Phase II
increase in
employment
from 2011
to 2012
94,844
17
ELKHART COUNTY
IND U STRI A L
Signs of modest growth and stability were seen in
Elkhart County’s industrial market in 2012. Lack
of speculative construction, coupled with steady
user activity, helped keep the vacancy rate in single
digits. Despite
this positive
trending,
landlords have
not been quick
to return to
speculative
development.
Economic
uncertainty
still lingered
through the
year with the
November
election, which
caused users to
be hesitant to
make long-term
commitments
and impacted
both shortand longterm real estate decisions.
Elkhart County’s 85.5 million square foot industrial
market posted an impressive single-digit vacancy
rate of just 5.6 percent at the end of 2012, down
from 6.9 percent in Fourth Quarter 2011 and 10.7
percent in Fourth
Quarter 2010. Leasing
concessions are
still present in the
marketplace, but not
as aggressive as those
offered from 2009 to
2011. It’s anticipated
that unless speculative
development is robust
in 2013, concessions
will start to diminish.
Continue
to see positive
g ains wit h
continua tion of
a single-digit
vacancy ra te
Although challenges remain for Elkhart County,
2013 should continue to see positive gains with
continuation of a single-digit vacancy rate and
a slight rise in rental rates as the vacancy rate
decreases further. In the coming year, with reduced
supply, land sales should pick up nominally with
developers returning to speculative development.
18
Average asking lease
rates for generalindustrial and
manufacturing space
ranged from $1.44
to $3.75 per square
foot, triple-net while
rates for flex space
ranged from $2.00
to $4.00 per square
foot, triple-net. Asking rates should increase
slightly from their current position in 2013.
7,000,000
6,000,000
5,000,000
Manufacturing
4,000,000
4 000 000
W h
Warehouse
Flex
3,000,000
Other
2,000,000
TOTAL
1,000,000
0
1st
2nd
Transactions
As apparent by the decrease in vacancy, industrial
transactions experienced a significant increase over
the course of the year. Lease transactions increased
over 40 percent from 2009 and sales transactions
were up over 55 percent from the same time frame.
Despite an increase in transactions, a disconnect
remains between landlords/sellers and tenants/buyers
as to the value of commercial real estate. However,
this gap is starting to close as the numbers indicate
the market is on its way to a steady recovery.
Lippert Components Manufacturing Inc. and Kinro
Manufacturing, Inc., both subsidiaries of Drew
Industries Incorporated, announced plans to expand
the existing Elkhart and Goshen sites for a new
thermo-forming operation and expanded glasstempering and awning line. The expansions are
expected to create up to 260 new jobs by 2015.
3rd
4th
Forest River, Inc. constructed a 100,000
square foot facility in Goshen to meet the
demands of the growing market. The new
facility is located between the Company’s
Wildwood and Surveyor plants, and Forest
River is expected to increase their workforce by
up to 25 percent with the new addition.
The Company will also expand its operations
in both Middlebury and Millersburg. With
the support of tax phase-ins, the Company
is expected to expand its complex at 11555
Harter Drive in Middlebury and hire an
additional 40 employees. The Company also
hopes to expand its existing operations in
Millersburg, located at 66135 Indiana 13,
and hire an additional 120 employees.
INSIGHT + ANALYSIS
19
INDUSTRIAL TRANSACTIONS
80
70
60
50
Leases
40
Sales
30
20
10
0
2009
2010
2011
Agdia Inc. has broken ground on a new 50,000-squarefoot facility that will replace its 16,000-square-foot
plant and consolidate its operations at 30380 County
Road 6 in Elkhart. The Company hopes to hire
additional employees when the plant opens in 2013.
Oregon-based Scientific Developments
Inc. purchased a manufacturing facility
in the City of Elkhart. The 50,000 square
foot facility is located north of the Elkhart
Municipal Airport at 1655 Gateway Court.
S
partan Motors Inc. relocated Utilimaster
Corporation’s manufacturing operations,
headquarters, and all supporting departments
and functions to Bristol from Wakarusa. The
move consolidated Utilimaster’s operations into
one facility from its campus of 16 buildings.
German seating manufacturer, Kiel NA, LLC,
has announced plans to locate its first US facility
in the City of Elkhart. The Company expects
to create up to 65 new positions and plans to
invest nearly $3.8 million to lease and equip a
20,000 square foot facility at 4519 Wyland Drive.
Supreme Industries, Inc. plans to add 350 jobs
at its Goshen campus, part of a multi-milliondollar expansion project through 2014. The
project is expected to take three years and will
bring the total employment at the Goshen
campus up to 980, making it the fifth-largest
for-profit employer in Elkhart County.
Chicago Lands has purchased the 102,062
square foot former Pilgrim Plant facility
at 14489 U.S. 20 in Middlebury for $1.1
million. Chicago Lands plans to lease the
building to an unnamed metals business.
Elkhart auto supplier, Automotive Climate Control
Inc., announced it would invest nearly $5 million for
new equipment at the Elkhart location. The expansion
is expected to create up to 40 new positions by 2015.
20
2012
Elkhart auto supplier, Kem Krest, plans to
expand operations with the purchase of a
208,000 square foot facility at 3221 Magnum
Drive in Elkhart. The property was the former
site of THINK, and provides tremendous
growth potential and local impact through
the facility acquisition by Kem Krest.
ELKHART COUNTY
L ess demand fo r bri c k s
a n d mor t a r w i t h t he growin g
u s e o f te ch no lo g y
O FFIC E
Elkhart County’s 3.2 million square foot office market is closely
tied to its industrial base. Relative to other regional markets,
it has fewer freestanding office buildings. Instead, the office
market is predominately comprised of owner-occupied office
buildings, most of which are attached to manufacturing
plants, which helps companies save on occupancy costs.
The office market in Elkhart County saw a significant increase
in vacancy during 2012, from 17 percent at year-end 2011 to 23
percent by year-end 2012. Less demand for bricks and mortar with
the growing use of technology and the remaining uncertainty in
the global marketplace all had an effect on occupancy demands.
With an increase in vacancy, average asking rates experienced
little change from the end of 2011. Landlords will have to remain
competitive in 2013 with aggressive rental rates and concessions to
attract and retain tenants.
OFFICE ASKING RATES (NNN)
Office Rates
Central Business
District
Suburban
$8.35-$15.00
$8.50-$12.00
Elkhart County Clubhouse, an
international organization that
provides a support system for
individuals with mental illness,
opened in Downtown Goshen. The
Clubhouse is located at 114 S. Fifth
Street in the old J.M. Dale House.
First State Bank has relocated its Trust
and Wealth Management Department
from its headquarters in Middlebury
to 200 NIBCO Parkway in Elkhart.
The Economic Development
Corporation of Elkhart County
relocated to the Old National
Bank building at 300 NIBCO
Parkway in Downtown Elkhart.
RV manufacturer Jayco Inc.
announced plans to expand its
Middlebury headquarters and add
up to 65 new jobs by 2015. The
Company will invest $2.9 million
to construct a 77,000 square foot
addition to the existing 62,000
square foot facility. The project is
expected to be complete in May.
INSIGHT + ANALYSIS
21
RETAIL
Aside from its downtown communities, the main retail
submarkets of Elkhart County are located in the Central
Business District and along Cassopolis and Bristol Streets
in Elkhart and along the US 33 corridor in Goshen.
Elkhart County’s retail market continued to see activity
from boutique/local retailers and slightly more activity
from regional and national tenants. Thompson Thrift
Development, Inc., the developer of Elkhart’s Shoppes on
Six, has unveiled plans for the shopping center’s second
phase which will feature three prominent anchors and
several other stores and restaurants. Anchor tenants will
include T.J. Maxx, PetSmart and Shoe Carnival, while
other tenants are currently being sought to fill the 115,000
square foot retail center. The $13.5 million construction
project is expected to create between 200 and 250 jobs.
Discount
ret ailers
a g gressively
expanding
t hroughout
t he Midwes t
22
As manufacturing employment continues
to increase in the next year, it is anticipated
there will be more activity in the retail
sector, particularly from discount
retailers, which seem to be aggressively
expanding throughout the Midwest.
The retail vacancy rate increased slightly
over the last two quarters of the year,
ending the year at 8.3 percent, an increase
of approximately 1.2 percent from the
beginning of the year. Of the 12 million
square feet within the County, approximately
840,000 square feet was being actively
marketed at the end of the year. The vacancy
is expected to decrease in 2013 as activity
within the market continues to increase.
Asking rates for new-construction space
ranges from $11.00 to $16.50 per square
foot, triple-net; second-generation space
ranges from $7.50 to $11.50 per square foot,
triple-net and big-box rates range from
$2.60 to $5.50 per square foot, triple-net.
The Big R Store located in the old Kmart
building opened for business. The
retailer specializes in farm supplies,
hardware, clothing and shoes, as
well as lawn and garden items.
Biggby Coffee’s first Elkhart location
opened for business at 195 C.R. 6 in
front of the Walmart Supercenter.
A new Dollar General store was erected at
County Road 46 and Indiana 15 in New Paris.
Fairfield Inn & Suites is planning a new
hotel location at 3401 Plaza Court, north
of the Hilton Garden Inn, in Elkhart. The
hotel should open in August of 2013.
ELKHART COUNTY
O’Reilly Auto Parts announced plans for
a new 7,053 square foot business at Main
Street and Lusher Avenue in Elkhart.
M U LT I -H O U S I N G
Rent and Occupancy
Honey’s Self Serve Frozen Yogurt opened a
new 2,000 square foot restaurant in Goshen
in the former Domino’s Pizza location at
620 Lincoln Avenue in Linway Plaza.
Apartment rental rates in Elkhart County remained stable
from 2011 to 2012 with an average increase of $5 to $10
per month for all apartment sizes. Occupancy increased
slightly to 93.5 percent, but generally the county saw
little activity in terms of new construction and renovation
projects.
Garber’s outgrew its downtown location
on South Main Street and moved to
County Road 17 in the same shopping
center as Lucchese’s Italian Restaurant.
Kaizen Hibachi Grill Sushi & Bar opened for
business at the former Pagoda Inn in Goshen.
The building, located at 2820 Elkhart Road,
was completely gutted and a contemporary
Japanese-inspired atmosphere was created.
Iechyd Da Brewing Co., Elkhart’s newest
brewery, opened at 317 N. Main Street.
Ace Hardware of Middlebury
relocated and expanded into a
23,000-square-foot facility located at
the intersection of US 20 and Ind. 13.
Total Units
Average Units
28
5,404
193
93.50%
Smallest Property
24 units
Largest Property
707 units
Earliest Year Built
1922
Latest Year Built
2004
Average Year Built
1981
The former Mor For Less store, located
at 300 E. Elkhart Street in Bristol, was
converted to Harding’s Market.
1st Source Bank opened a new branch
in Nappanee, outside of Martin’s Super
Market. The new banking center replaces
the location at 1409 E. Market Street.
A gasoline station and convenience store
was constructed on the north side of
Kercher Road at Waymouth Boulevard
on Goshen’s south side. A Subway
Restaurant and Park North Food Mart
are the anchor retailers at the site.
INSIGHT + ANALYSIS
23
At-A-Glance
Warsaw was ranked number 11 in Forbes Top 15
US small cities in which to raise a family.
Known as the “Orthopedic Capital of the World”
and the site of one of the largest gravure printers
in North America.
Kosciusko County is home to the world’s largest
bio-diesel plant.
Kosciusko County produces over 12,000 tons of
tomatoes annually which are made into Red Gold
tomato products.
Lake Wawasee covers 3,200 acres and is the largest
natural lake in the State of Indiana.
24
8
# of new tenants at
Warsaw Commons
$15m
Meijer investment
into new Warsaw
location
100
acreage within
new certified
technology park
Kosciusko County is the
home of several major industries.
The County has one of the largest
gravure printing companies that
employs 7,000 workers and a
manufacturing industry that employs
16,000 workers. Kosciusko also has
a major agri-business that supplies
food products not only within the
United States, but internationally as
well. The City of Claypool has the
largest bio-fuel plant in the
United States. Warsaw is known
as the “Orthopedic Capital of
the World,” with a $3.7 billion
impact on Northern Indiana. With
a population of 77,279, Kosciusko
County provides its diverse group
of residents with a high quality of
living at a low cost.
Education
Higher educational opportunities within Kosciusko
County include Ivy Tech’s Warsaw campus, Indiana
Wesleyan University and an Indiana Purdue
Fort Wayne center located in Warsaw. There are
also specialized schools such as Grace College &
Seminary, Freedom Academy and Indiana Tech.
Shopping
Shopping in Kosciusko County is both a historic
and unique experience for residents and visitors.
Wawasee Village Shopping and White Front shops
offer an expansive range of shops and boutiques
with one-of-kind, locally made products. Village
at Winona is a thriving arts community on the
shores of Winona Lake, home to numerous
galleries, studios, shopping, dining, museums and
cultural and entertainment events year-round.
Kosciusko County is one of the most popular resort
areas in the Midwest. Its over 100 lakes attract people
to the County to enjoy activities such as swimming,
fishing and boating. Two of the finest golf clubs are
located within the County, along with museums,
parks, live theaters and several annual festivals.
Transportation
Several contract carriers and one major trucking
firm lie in the center of I-80/I-90 N, I-69 E,
local demographics
US 24 S and US 31 W. Major freight carriers such as
2013 Estimates
Air Cargo Carriers Inc. and FedEx serve the area.
Population
77,279
Households
29,307
courtesy cars. The installation of the Instrumental
$59,779
Landing System provides better and safer access to
$180,774
The Warsaw Municipal Airport has all of the safety
features of a large, city airport; two-mile runways and
Warsaw and is an attraction for future businesses
planning to locate or expand within the County.
Employed Population
37,487
25
KOSCIUSKO COUNTY
IND U STRI A L
The orthopedic industry remains the foundation of the
Kosciusko County industrial market, providing a stable
workforce and economy. With 29 bioscience companies in the
area, including Biomet, DePuy, Medtronic, OrthoPediatrics,
Symmetry and Zimmer, Warsaw appropriately earns the
title as “Orthopedic Manufacturing Capital of the World.”
The success of orthopedic manufacturing in Warsaw
continues to attract companies worldwide to the region
and local orthopedic companies continue to expand.
The most significant decrease in vacancy
was seen in the manufacturing sector and,
with a lack of new construction, vacancy is
expected to remain at similar levels in 2013.
Average asking rates experienced a slight increase
from 2011. Asking rates for general-industrial
and manufacturing space currently range from
$2.95 to $3.50 per square foot, triple-net, and
warehouse and distribution space ranges from
$2.75 to $5.25 per square foot, triple-net. As the
market continues to stabilize in 2013 and the
vacancy rate continues to fall, it is expected that
asking rates will continue to gradually increase.
Transactions
The industrial sector of Kosciusko County saw
approximately $8.7 million in sale transactions
throughout 2012, with the average transaction
valued at approximately $482,000. Significant
transactions include the $1.2 million sale of
the former Liberty Homes manufacturing
facility to Patrick Industries in Syracuse.
INDUSTRIAL VACANCY
1,000,000
900,000
800,000
700,000
700 000
600,000
500,000
400,000
300,000
1st
2nd
3rd
4th
Other dominant players in the Kosciusko industrial market
include RR Donnelley, the Nation’s largest provider of
commercial printing; Da-Lite, the world’s largest manufacturer
of projection screens; and Louis Dreyfus, the Nation’s largest
biofuel plant. Leading agricultural contributors are CBT
Inc., Maple Leaf Duck Farms, Midwest Poultry Services,
Creighton Brothers and Kip Tom Farms with a state-of-theart 2,250,000 bushel storage and loading/unloading facility.
The amount of actively marketed industrial space decreased
during 2012, beginning the first quarter with approximately
925,000 square feet of available space and ending the
fourth quarter with just over 410,000 square feet of actively
marketed space. The vacancy rate for Kosciusko County
decreased over 3 percent throughout the year, ending the
fourth quarter with a vacancy just under 3 percent.
26
Micro Machines, a Kalamazoo-based
orthopedic device manufacturer, expanded
operations and opened a second facility at
4310 Corridor Drive. The Company invested
$2.59 million to lease, renovate and furnish
the 10,000 square foot building and will hire
60 new employees over the next two years.
CTB Inc., an agricultural systems manufacturer,
expanded its Milford operations and purchased
a 125,000 square foot manufacturing facility
from Georgia Gulf Corp. The building formerly
housed Royal Building Products and is located
a quarter mile east of CTB’s current property.
Patrick Industries Inc. announced plans
to purchase and renovate an existing
142,000 square foot facility for its
AIA Countertops division in Syracuse.
The Company will plan to invest
$3 million at the plant and expects to
add up to 65 new positions by 2014.
Iconacy Orthopedic Implants, LLC, a
hip replacement manufacturer, invested
more than $2.6 million to lease, renovate
and equip a 50,000 square foot facility
at 4130 Corridor Drive in Warsaw.
The expansion is expected to create
up to 50 new positions by 2015.
Plans have been approved for a new
certified technology park that will be
located on US 30 on the west side of
Warsaw and includes the Robinson
Business Park, the new campus of Ivy
Tech and the recently annexed 100 acres
of property. Organizations involved
in the planning and development of
the park include the Indiana Economic
Development Corp., OrthoWorx Inc.,
Kosciusko Economic Development
Corp., Kosciusko County government,
Warsaw, Winona Lake, Grace College
and Ivy Tech. The Kosciusko Economic
Development Corporation has already
secured a commitment from Winona
PVD Coatings LLC to invest more
than $9 million to expand in the new
industrial area of the proposed technology
park and add 70 jobs in 2013.
OFFICE
The Kosciusko County office market is primarily
driven by the orthopedic industry, making the medical
office sector its strongest division. The focus of medical
office space is near Kosciusko Community Hospital,
along Provident Court and Dubois Drive. General
office space is mostly situated in Downtown Warsaw
with proximity to government offices and area banks.
The office vacancy rate increased at the start of the first
quarter to 4.7 percent and then gradually decreased
through the year, ending the fourth quarter at
4.2 percent with approximately 77,000 square feet
of space being actively marketed. With construction
of new office space at a standstill, it is expected that
the vacancy rate will remain stable through 2013.
Evident by the decrease in vacancy, the Kosciusko
County office market is beginning to show
signs of improvement and average asking rates
increased slightly from 2011. Class A average
asking rates range from $11.00 to $13.50 per
square foot, triple-net and Class B rates range
from $9.50 to $12.75 per square foot, triple-net.
With the economy beginning to turn around and
an increase in demand for office space, rates are
likely to continue on a slight incline during 2013.
Transactions
Approximately 20 office sales totaling just over
$9.5 million transacted within the County in 2012. The
average transaction was valued at $530,000. Significant
transactions include the $6.2 million investment
sale of the Beyer Medical Building in Warsaw.
INSIGHT + ANALYSIS
27
The Warsaw City Council relocated from 302 E. Market
Street to its $2.1 million newly renovated space at 102
N. Buffalo Street. The City purchased the 30,000 square
foot building that formerly housed National City
Bank and began renovation work in January of 2012.
New retail development Warsaw Commons
has created a new retail pocket on the
north side of Warsaw. The plaza is located
at State Road 15 and County Road 300.
The Kosciusko County retail market
experienced an increase in the amount of
actively marketed retail space in the third and
fourth quarters of 2012, rising to 3.5 percent
vacancy. The vacancy rate is expected to remain
at similar levels throughout 2013, as retail
growth is expected to remain fairly flat.
Average asking rates for new construction
retail space ranges from $12.00 to $18.00
per square foot, triple-net while secondgeneration space ranges from $8.00 to
$10.50 per square foot, triple-net.
PMG Agency, an insurance firm, expanded
its business and moved to a new branch
in Warsaw at 616 S. Buffalo Street.
Center Street Partners opened a new office
at 1303 E. Center Street in Warsaw.
Michael Suhany State Farm opened a new
location at 616 S. Buffalo Street in Warsaw.
Combined Community Services relocated
to 1195 Mariners Drive in Warsaw.
The Whitman Group opened a new office and national
headquarters at 220 Parker Street in Warsaw.
Interra Credit Union opened a new branch at
1401 South Huntington Street in Syracuse.
Transactions
Kosciusko County experienced over
$15 million in retail sales transactions in
2012, with the average value at around
$340,000. Significant transactions included
the $6.5 million investment sale of the Kohl’s
department store building in Warsaw.
Trine University’s Warsaw Education Center opened
a new location at 907 Wooster Road in Winona Lake.
R E TAIL
28
The major retail submarkets of Kosciusko County are
concentrated within the City of Warsaw. The State
Road 15 and US 30 corridor continues to attract a large
majority of the retail growth within the area with
tenants such as Super Walmart, Lowe’s and Kohl’s.
Other submarkets include those along US 30 and
Parker Street, with tenants including Menard’s and
Martin’s Super Market, and along US 30 East with three
separate shopping plazas: Market Place of Warsaw
featuring Carsons/Elder Beerman, Lake Village featuring
K-Mart, and Woodland Plaza with Big R and Staples.
Warsaw Commons, a 76,000 square foot multitenant retail strip center was constructed
at the northeast corner of County Road 300
North and Sheldon Street north of Kohl’s in
Warsaw. Tenants within the shopping center’s
first phase include Kohl’s, Verizon, Anytime
Fitness and Zoyo Frozen Yogurt. Phase II of
the retail development celebrated its grand
opening this year and includes tenants such as
Dollar Tree, TJ Maxx, PetSmart, Shoe Carnival,
Ulta, Taco Bell, Aspen Dental, Maurice’s and
Kay Jewelers. Phase II has approximately
5,600 square feet of available space.
KOSCIUSKO COUNTY
Maurice’s announced plans to open a new store at
570 W. 300 County Road North in Warsaw at
Warsaw Commons II.
A new Subway restaurant was constructed in Silver
Lake at the corner of Indiana 15 and Indiana 14.
The 1,700 square foot space features a fireplace,
lounge chairs and TVs.
Wing’s Etc. relocated from its location at
2604 Sheldon Drive to a more visible location in
the former Blockbuster building in the Lake Village
Shopping Center on Warsaw’s east side.
The Warsaw Meijer, which began construction on
the 190,000-square-foot store last spring, is expected
to open for business in late June. The $15 million
retail business will employ 250 full and part-time
employees.
The Blue Lion Mercantile opened a new location
at 105 W. Market Street in Pierceton. The Blue
Lion offers café-style snacks and coffee as well as
consignment gift items.
Average monthly rental rates increased significantly
for one- two- and three-bedroom units from 2011,
an average of $50 per month. The occupancy
rate slightly increased to 97.6 percent. With a
lack of new construction, rates and occupancy
are expected to remain stable into 2013.
Transactions
Approximately $3.9 million in multi-housing
investment sales were transacted in 2012 in
Kosciusko County. Transactions of multi-housing
complexes with less than 50 total units were the
most common trend for the multi-housing sector,
with average sale prices at around $650,000.
Apartment Size
Range
Average
1 Bedroom
$399-$625
$523
2 Bedroom
$459-$875
$648
3 Bedroom
$619-$865
$717
Nappannee Fabrics, a retail fabric shop, opened a
new store located at 8178 W. 640 North in Etna Green.
M ULT I-H O U SI NG
Total Units
Average Units
28
5,404
193
93.50%
Smallest Property
24 units
Largest Property
707 units
Earliest Year Built
1922
Latest Year Built
2004
Average Year Built
1981
INSIGHT + ANALYSIS
29
At-A-Glance
Marshall County is home to several thriving
business clusters including agribusiness, forest
and wood products and advanced materials;
and chemical, fabricated metal, machinery, and
transportation equipment manufacturing.
Hoosier Tire is the world’s first and only factory
solely devoted to the production of racing tires and
is located in Plymouth.
Culver Military Academy and Culver Girls
Academy have earned international acclaim as
outstanding college preparatory schools.
$27.3M
2
20
renovation/
expansion
investment
within the
industrial
sector
# of Culver’s
Wings
opened in
2012
# of years
spent
organizing
& preparing
Culver’s
Garden
Court’s
construction
Within a 100-mile radius of Plymouth, there are
nearly 12 million people and markets providing
feasible access to every product and service.
Just south of the southern tip of Lake Michigan, Marshall County
provides its 47,028 residents with a high quality of life, low cost of living, warm
and inviting communities and excellent schools. Marshall County’s promising
investment potential and market proximity makes it well-positioned to the
needs of today and tomorrow’s
local demographics
businesses. The progressive
community encourages businesses
2013 Estimates
to grow and prosper by offering
Population
47,028
an unbeatable combination of
Households
17,432
assets, enticing programs and
$45,247
incentives to promote growth
and development, and access
$156,949
to hundreds of thousands of
Employed Population
22,441
employees.
30
Transportation
boarding schools, have some of the finest
Situated at the crossroads of Highways US 30 and US 31,
athletics programs and have earned
Marshall County has excellent transportation support.
international acclaim as outstanding schools.
Whether rail, air or road services, the transportation
corridor is excellent for business and easily accessible,
giving businesses a competitive national and global
reach. The area is served by one Class 3 and two Class
1 railroads. Well-positioned for air service, Marshall
County is 23 miles from the South Bend Regional
Airport, which serves major cities from coast to coast.
Additionally, Chicago O’Hare International Airport,
one of the busiest in the US, is within easy reach.
Education
Marshall County has excellent educational opportunities
within or in close proximity, such as Ancilla College, a
liberal arts institution that serves a diverse population
of students. The University of Notre Dame and St.
Mary’s College are only 25 miles north of the County.
Culver Academies, independent college preparatory
Shopping
The County employs a small-town approach
to quality and customer service. Distinctive
specialty stores, antique shops and larger
retail establishments serve the region.
Marshall County offers residents and visitors a wide
variety of entertainment options including genuine
performances at the Riverside Amphitheater, the
artwork of talented local painters and sculptors,
musical entertainment and a local drive-in theater.
The County’s proximity to water promotes
canoeing, fishing and hiking along the rivers,
or swimming in the surrounding lakes. The
famous Blueberry Festival tradition adds to the
County’s sense of community and rich heritage.
31
MARSHALL COUNTY
IND U STRI A L
The main industrial submarket of Marshall County
includes PIDCO East and West, located near Oak
Road and US 30. Other industrial areas within
the County include Van Vactor Park, located
along Pine Road and US 30 in Plymouth, which
features a mix of manufacturing, warehouse,
showroom and distribution facilities.
The Tech Farm, located at the intersection of
US 30 and Pine Road, remains one of the major
components of Marshall County’s economic
development strategy. The 40-acre technology
park continues to gain interest from technology,
light manufacturing and AgriTech businesses.
The Indiana Major Moves project, a component of
which will upgrade US 31 from US 30 in Plymouth
to the US 20 bypass in South Bend, continues and
is expected to be completed in 2014. The project
will reduce congestion and improve safety and
mobility along the route, easing travel from
South Bend to Plymouth and on to Indianapolis.
The amount of actively marketed space decreased
slightly from the beginning of the year from
308,500 square feet to approximately 270,000
square feet at the end of the fourth quarter.
The major hurdle for the County continues to be the
lack of existing available buildings within established
industrial parks. In today’s economy, potential new
businesses are looking for the most economical
option and that often includes purchasing or leasing
empty structures that require little renovations.
Despite the slight decrease in available space, average
asking rates for industrial space decreased slightly from
2011 ranging from $2 to $3.60 per square foot, triple-net.
32
Hoosier Racing Tire Corp, a Lakevillebased business, has invested $8 million to
expand its rubber mixing plant and has
created 20 new jobs in Plymouth.
Culver Tool & Engineering, Inc. expanded its
existing production facility in Plymouth.
The Company spent nearly $1 million
for new equipment and added about
six new positions this year.
Major
hurdle
continues
to be lack
of exis ting
available
buildings
Zentis Food Solutions North America, LLC
announced plans to expand and create up to 67
new jobs by 2014 at their facility in Plymouth.
The Company will invest $15.6 million to expand
their production operations as well as renovate
the existing facility. The Company also acquired
Philadelphia-based Sweet Ovations and, as a
result, doubled in size to approximately 500
total employees. The Company is planning
to expand into additional markets.
Plymouth’s AK Industries invested $800,000 in new
machinery and to expand their existing facility at
2055 Pidco Drive. The manufacturing company
plans to hire an additional four employees.
Gramm Holdings/Headsight, Inc. in Bremen
was granted a tax abatement to allow for an
18,000-square-foot expansion intended to house
new research and development, computer-aided
design and prototype production equipment.
The building expansion represents a $1.7 million
investment, while the equipment represents
an additional $1.7 million investment, and
will result in approximately six new hires.
OFFI CE
The Marshall County office market is concentrated
in the Central Business District of Plymouth,
with users occupying primarily one- or twostory office buildings. LifePlex office park
creates an additional office submarket along
US 30. Half of the 132,000 square foot building
is occupied by medical office users including
Holm Medical Clinic, Grossnickle Eye Center,
LifePlex Urgent Care Center, Nephrology Inc.,
and Fitness FORUM Sports and Wellness.
The vacancy rate in Marshall County experienced
a slight increase from 2011 with a vacancy rate at
approximately 4.5 percent at the end of the fourth
quarter and approximately 22,000 square feet of
actively marketed space. The majority of available
space is located in smaller office buildings within
Plymouth’s Central Business District.
Average asking rates for office space ranged from
$7.50 to $14.50 per square foot, full service.
The three-story Community Resource Center of
Marshall County (CRC) provides the community
with an additional 29,800 square feet of office
space. The building, which completed construction
in the spring of 2012, is currently occupied with
tenants such as Real Services, Center Township
Trustee, FSSA Department of Family Resources,
WIC, Utility Resource Group and Hoosier Driving.
Announcements were made regarding Saint Joseph
Regional Medical Center and their plans to open
the first SJRMC health insurance and exchange
information center at the CRC building. The new
office is designed to help people understand
their health insurance situation under the federal
Affordable Care Act.
The Plymouth WorkOne office moved from its
location on Kingston Road to a new 5,000 square
foot office at 2852 Miller Drive in Pine Creek Plaza.
Bremen Castings, located at 500 North Baltimore
Street in Bremen, partnered with Ancon
Construction to expand their office space with
a 1,480 square foot addition. The new office
addition includes an open office area with several
workstations, a window-wall conference room
and a media hub/kitchenette. The interior design
of the addition features an open and exposed
technological scheme.
INSIGHT + ANALYSIS
33
RETAIL
Marshall County retail is centered near Oak Road,
SR 17 and US 30 in Plymouth, with several national
and local tenants occupying space in shopping
centers such as Pine Creek Plaza, Plymouth Centre
and Pilgrim Plaza. Major tenants include Walmart,
Kmart, Sears, Applebee’s and Bob Evans.
The Marshall County retail market experienced a decrease
in the amount of actively marketed retail space throughout
2012, ending the year with approximately 60,000 square
feet of actively marketed space and a vacancy rate of
2.4 percent, down from 80,000 square feet at the beginning
of the year. With a lack of new construction, the vacancy
rate is expected to remain stable throughout 2013.
Newer construction retail asking rates range
from $10.00 to $17.00 per square foot, triplenet while second-generation asking rates range
from $7 to $12.50 per square foot, triple-net.
Clothing retailer Rue 21 opened a new
4,500 square foot location in the former
Blockbuster space at 1445 Pilgrim Lane, at
Pilgrim Place shopping center in Plymouth.
Culver’s Wings opened two new locations over
the course of the year-one at the site of the former
Yacht Club at 115 E. Jefferson in Downtown
Culver and the other on State Road 10 at the site
of the former Ten Spot Restaurant and Bar.
Malibu Tanning opened a 3,000-square-foot
tanning facility at 1913 N. Michigan Street in
the Kroger shopping plaza in Plymouth.
Amore Jules Salon opened at 304 N.
Center Street in Plymouth.
Several businesses leased space in Downtown
Plymouth’s store fronts. They include Room with
a Past at 114 N. Michigan Street, Rock on 109
Boutique at 109 N. Michigan Street, Ely Lane at
110 W. Garro Street, Meme’s Boutique at
309 Jefferson Street, Furore Photography at
203 N. Michigan Street, L & K Serendipity
consignment at 100 W. Garro Street,
Healing Hands Massage Therapy at
203 N. Michigan Street, and Encore
Consignment at 109 N. Plymouth Street.
Evil Czech Brewery opened at 530
S. Ohio Street in Culver.
Unique Pet Boutique and Grooming Salon
opened in the Kroger shopping plaza at 2011
N. Michigan Street in Plymouth. The specialty
pet retailer carries items such as pet clothing
and food and offers grooming services.
34
MARSHALL COUNTY
M ULT I-H O U SI NG
Average monthly rental rates increased slightly for
one-, two-, and three-bedroom units from 2011,
an average of $10 per month. The occupancy rate
increased from 94.5 percent to 97 percent.
7
Total Units
388
Average Units
55
97.00%
Smallest Property
8 units
Largest Property
90 units
Earliest Year Built
1968
Latest Year Built
1997
Average Year Built
1981
Plymouth nursing and rehabilitation center,
Miller’s Merry Manor, underwent $650,000
worth of renovations which included five
private rehabilitation suites, two lounges,
a courtyard, electric beds, cable television
and Wi-Fi. The Warsaw-based organization
began the renovations in December of 2011
and completed work in May of 2012.
Culver’s Garden Court senior-living facility held
its ribbon cutting and open house after nearly
20 years of searching for land and preparing to
actually build the facility. The new senior-living
facility, located at 801 S. Main Street Garden Court,
was constructed by Easterday Construction.
Renovation and remodeling work has been ongoing
at Plymouth’s Park Jefferson Apartments, a multihousing living complex on Jefferson Street that
was condemned by Marshall County. Work is now
being done in an effort to improve and upgrade the
current buildings and return the complex to a state
in which the units can be occupied once again.
Apartment Size
Range
Average
1 Bedroom
$379-$525
$462
2 Bedroom
$479-$605
$541
3 Bedroom
$649-$675
$662
INSIGHT + ANALYSIS
35
At-A-Glance
The County is surrounded by an excellent highway
transportation system that provides access to
regional and national markets. LaPorte is the only
city in Indiana in which four state highways meet
in the center of the City.
Michigan City is a major stop along the South
Shore Line, connecting the City with Downtown
Chicago as well as the South Bend Regional
Airport.
Michigan City offers acreage and buildings that are
available for any type of business at a fraction of
national average prices.
The Blue Chip Casino, located in Michigan City, is
the largest riverboat casino in Indiana.
Transportation
Shopping
Just 60 short miles from Chicago, LaPorte County is easily
The Lighthouse Premium Outlets offers an impressive
accessible from I-94 and the I-80/I-90 Toll Road. LaPorte’s
collection of over 120 brand-named stores that
distribution and logistics systems are another element
draws visitors from several outlying areas. Plenty
of the County that gives it a competitive advantage. The
of local small retail shops highlight LaPorte’s
LaPorte Municipal Airport and Michigan City Municipal
history with antiques and nostalgic gift shops.
Airport are both located within the County. The airports
are serviced by most major airlines and businesses can
gain corporate access. The county also has bus services
For the enjoyment of residents and visitors, LaPorte
that travel nationally including United Limo and Tri
County has entertainment opportunities that include
State Coach, as well as local services such as the MC
art and nautical history museums, public and private
Transit whose essential services are used every day.
golf courses and theatres with stages that rival large
cities. The Blue Chip Casino and Spa is situated on
Education
35 acres and includes a full-service, 65,000 square
LaPorte County provides residents with educational
foot casino, a 22-story hotel, the 15,000 square
opportunities that include Purdue University North
foot Spa Blue, and several bars and restaurants.
Central, Brown Mackie College and Ivy Tech State College.
LaPorte’s proximity to Lake Michigan provides
residents with beaches and sailboat charters.
36
Located at the southern tip of Lake Michigan, LaPorte County has
one of the strongest manufacturing industries in the Michiana area.
A diverse range of products such as steel, shoes, machine tools, groceries
and televisions is produced within the limits of the County. For more than
150 years, LaPorte’s business community has provided for its 111,216
residents. The County’s state-certified “Shovel Ready” sites, low business
operating costs, a willing and able workforce, and competitive wages gives it
an advantage when attracting new businesses.
local demographics
1.2M
2013 Estimates
Population
111,216
Households
42,375
$51,681
$156,943
Employed Population
49,653
$20m
amount (SF)
Woodland
planned for
Cancer
Thomas Rose Care Center
Industrial
investment in
Park
new facility
expansion
5
Retailers
opened at
Lighthouse
Place
Premium
Outlets
in 2012
37
LAPORTE COUNTY
INDUSTRI A L
Both I-80/90 and I-94 run through LaPorte County,
making it an ideal location for industrial users who
benefit from convenient access to regional markets
such as Chicago, Detroit and Indianapolis.
The main industrial park continues to be the Thomas
Rose Industrial Park on the northeast side of LaPorte,
which held a groundbreaking ceremony to celebrate
the start of the 137-acre expansion project this year.
The plan includes the construction of nine buildings
ranging in size from 75,000 to 400,000 square feet,
totaling about 1.2 million square feet of industrial
space, as well as a new dual rail service from Norfolk
and South Shore railways. The expansion, which
is designed to bring in large industrial users, is
expected to bring around 1,000 new jobs to the area.
and 8-inch gas lines, over 45,000 linear feet of
10-inch water lines and is zoned for heavy
industrial. The Park also has access to the large
local labor pool of skilled and unskilled workers
within close proximity. The site is being developed
with help of $6 million from LaPorte County
as well as $3 million a piece from CSX and the
State, representing a $12 million investment.
Other industrial submarkets within the County
include the North Pointe Industrial Park, South Shore
Industrial Railroad Park along the I-39 Corridor,
the Millennium Industrial Park as well as Guardian
Industrial Park along I-212 in Michigan City.
The industrial vacancy rate increased over the first
three quarters of the year and then decreased to
Ex i s t i n g users cont inue
to ge ne r a te movement
Another industrial park going through significant
changes is the Kingsbury Industrial Park on
US 35 and US 6 on the south side of LaPorte.
Work on the Park’s intermodal facility began
in September. Plans for the site include the
construction of a cold storage warehouse that will
be served by CSX railroad. Construction work for
the 2-mile extension of the rail line is expected to
be completed no later than June of 2013. Initially,
about 50 warehouse jobs and more than 100
trucking-related jobs are expected to be created.
The site infrastructure features an onsite NIPSCO
power substation, an on-site sewer treatment
facility with extensive available capacity, 20-inch
38
9.5 percent at the end of the fourth quarter with
approximately 2.2 million square feet of actively
marketed space. The overall increase was the result
of the 29 percent increase in warehouse space, from
1.1 million square feet to nearly 1.7 million square
feet. Available manufacturing space decreased from
nearly 780,000 square feet to 425,000 square feet
and the amount of available flex space remained
unchanged. While there continues to be an abundance
of available product, the lack in quality product
continues to be challenge for those looking for space.
Existing users within the area continue to generate
movement with several announcing expansion and
upgrade opportunities over the course of the year.
Asking rates for general-industrial and
manufacturing space increased slightly as the
amount of available space decreased, with ranging
rates from $2.00 to $3.00 per square foot, triple-net.
Industrial-flex space ranged from $3.50 to $4.50
per square foot, triple-net. Warehouse and bigbox distribution rates decreased as expected with
the increase in available space, with rates ranging
from $2.00 to $3.50 per square foot, triple net.
KTR Corp., a power transmission components
manufacturer, expanded its North American
headquarters in Michigan City. The Company
invested more than $1.5 million to purchase
equipment and renovate its 42,000 square foot facility
at 122 Anchor Road in Michigan City. The Company
intends to add 20 jobs by 2014. Renovations to the
facility are expected to be completed in 2013.
Hearthside Food Solutions of Michigan City received
approval from the Michigan City Board of Zoning
Appeals for a more than $6 million expansion of
its existing plant at US 6 and Ohio Street. 8,600
square feet will be added to the Company’s existing
180,000-square-foot facility. The expansion is
expected to create up to 30 new full-time positions.
MonoSol, a manufacturer of water soluble film, has
been approved for a 10-year tax abatement by the
LaPorte City Council this month. The Company is
planning a $39 million expansion of its operations
at the Thomas Rose Industrial Park on the City’s
east side. MonoSol plans to invest $5 million into
the new 50,000-square-foot building, which will
be the Company’s third building in the industrial
park, $34 million on new manufacturing equipment
and expects the expansion to create 37 jobs.
Retail packaging products manufacturer
Michigan City Paper Box Co. spent $725,000
on two new production lines and added four
new positions. The new positions represent an
addition of $90,000 to the Company’s $1.6 million
payroll, bringing its workforce up to 58.
OFFICE
Local downtown areas of LaPorte and
Michigan City hold the majority of office
space within LaPorte County. Office space
includes Marquette Mall, Commerce Square,
Whirlpool Cadence Chemical, National City
Bank, Horizon Bank and Fifth Third Bank.
The office vacancy rate decreased at the start of
the first quarter and then remained stable through
the year, ending the fourth quarter at 4.2 percent,
with approximately 88,000 square feet of space
being actively marketed, down 2 percent from
the end of 2011. With construction of new office
space at a standstill, it is expected that the vacancy
rate will experience little change through 2013.
Without much of a demand for office space, average
asking rates experienced no change from 2011, with
Class A rates ranging from $10.95 to $ 13.00 per
square foot, triple-net and Class B rates ranging
Construction on the 20,000 square foot, $20 million
Woodland Cancer Care Center was completed
in October. The new cancer care center is located
at 400 North near 900 West in Michigan City.
The LaPorte County Commissioners granted final
approval to allow for commercial development of
a 40-acre parcel along Interstate 94 in Michigan
City. The site, which already has an IU Health
medical clinic, has been named Life Works Business
Park. The developer, Holladay Properties, says
additional medical offices, along with hotels
and restaurants, are envisioned for the site.
Vector Marketing opened a new sales office
in Michigan City. The office, located at 1401 S.
Woodland Ave., Ste. 3, Michigan City, is used
for the recruitment and training of new sales
representatives as well as for team meetings where
additional training and mentorship is provided.
INSIGHT + ANALYSIS
39
The Michigan City Ivy Tech campus has
announced plans to expand the library
from 700 square feet to 2,400 square feet of
renovated space. The new space will allow
for an expanded resource center of books,
periodicals, CDs, DVDs and other materials
for student access. The expansion will also
include a conference room and a general
tutoring area with computers, printers,
digital projectors and a remote screen.
Onset of
specul a t ive
buil ding s,
so met hing
t ha t had be e n
no nex is tent
in t his ma rke t
for t he l a s t
severa l
yea rs
First Trust Credit Union expanded its
location at 402 J Street in LaPorte. The new
features include two additional offices,
a new lobby, additional parking and an
extra drive-through lane. Average monthly
rental rates increased slightly for oneand three-bedroom units from 2011, an
average of $10 to $20 per month. Average
monthly rental rates for two-bedroom units
remained the same as 2012. The occupancy
rate slightly decreased to 96.1 percent.
R ETA I L
40
The primary retail submarket within LaPorte
County continues to be the I-94 and US 421
corridor in Michigan City. Shoppers are
drawn to the area by the Lighthouse Place
Premium Outlets with over 120 outlet stores,
which continues to welcome new outlet
retailers. Marquette Mall and other big-box
retailers such as Walmart, Menard’s, Lowe’s,
Meijer, Big R and Hobby Lobby also attract
shoppers from outlying areas.
Demolition work on the former Kmart and Hobby
Lobby buildings at Michigan City’s Dunes Plaza
was completed at the end of 2012. The nearly
cleared site will make way for a new 50,000
square foot Kohl’s and two multi-tenant buildings
which are expected to house other national retail
and commercial tenants.
The LaPorte County retail market began to see signs of an
improvement over the course of the year as evident in the
overall retail vacancy.
The vacancy rate decreased from 3.1 percent at the start
of the year to just under 2 percent at the end of the fourth
quarter, down nearly 2 percent from the end of 2010.
The vacancy rate will likely remain at similar levels
throughout 2013, but may experience a slight uptick as
speculative space enters the market.
There was no significant change in average asking rates
over the year.
LAPORTE COUNTY
Average asking rates for second-generation space
remained stable at $8.00 to $12.00 per square foot,
triple-net, while rates for new-construction space
remained at $15.00 to $18.00 per square foot, triple net.
With the onset of speculative buildings, something
that had been nonexistent in this market for the last
several years, it is expected that asking rates for new
construction will slightly increase, while rates for
second-generation space will decrease as landlords
struggle to compete with the newly added space.
New Construction
Similar to previous years, few significant retail
construction permits were issued for LaPorte County
in 2012; however, several projects are planned for 2013.
Upcoming new-construction projects include Kohl’s
and the two adjacent multi-tenant retail buildings.
Evergreen Furniture has also announced plans to
construct a new building directly across from its
current location. Buffalo Wild Wings in Michigan City
also plans to build a new restaurant at 5000 S. Franklin
Street, with construction expected to begin late first
quarter.
M U LT I -HO U S I N G
Kroger, at 55 Pine Lake Avenue in LaPorte, underwent
a $3.9 million remodel project.
Family Dollar, Tely’s Sports Bar & Restaurant and
Dunham’s Sports opened in LaPorte’s Towne Square
on State Road 2.
Ignoffo’s Italian Bistro held a grand-opening ceremony
to celebrate the start of business in the historic
building at the northwest corner of Lincolnway and
Monroe Street at 701 Lincolnway in LaPorte.
Several new tenants opened in the Lighthouse Place
outlet mall in Michigan City. Tenants include Michael
Kors, Finish Line, Lane Bryant and Vera Bradley.
Nike also remodeled its store within the center.
Total Units
649
Average Units
108
97.60%
Smallest Property
14 units
Largest Property
148 units
Earliest Year Built
1982
Latest Year Built
2011
Average Year Built
1996
Transactions
The Edgewood and Superior Apartments, a 52-unit
complex located in Michigan City, sold in May for
$1,950,000 with an asking price above $2 million.
Marcus & Millichap Real Estate Investment Services
represented both the seller and buyer for the deal.
The Edgewood and Superior Apartments were an
appealing sale as both complexes were at nearly
100 percent occupancy at the time of the sale, and
both have a historical record of high occupancy.
Al’s Supermarket relocated from its location at 2600
Franklin Street in Michigan City to the former JewelOsco facility at 3535 Franklin Street, nearly doubling
its retail floor plan.
6
Briarwood Apartments & Villas, located on 18th
and Highway 39 in LaPorte, completed construction
in July and began leasing the newly built one-,
two-, and three-bedroom units. The development
includes 24 duplexes and 120 apartment units,
48 of which have been newly constructed.
Apartment Size
Range
Average
1 Bedroom
$410-$699
$523
2 Bedroom
$525-$985
$689
3 Bedroom
$679-$1,275
$934
INSIGHT + ANALYSIS
41
At-A-Glance
Indiana Dunes National Lakeshore is one of
Indiana’s three national parks providing over
15,000 acres of wilderness and extending 15 miles
along the shoreline of Lake Michigan.
The city of Portage is home of the International
Port of Indiana, the largest port on the Great
Lakes, which services lake barges and over 100
international ships.
Valparaiso University is recognized as one of the
“best regional universities in the Midwest.”
Portage is located at the tip of Lake Michigan and
in the heart of the American steel industry.
Porter County is quickly
growing due to the expanding Chicago
metropolitan area. According to the
2010 US Census, the population
increased 12 percent between the
years of 2000 and 2010. In 2013, the
population is estimated to be 166,889.
Highways and railways connect the
County to Chicago, Detroit and other
Indiana cities. Manufacturing and
healthcare are the two major industries
in the County.
42
75
# of units in Indiana’s
first “green” apartment
community
$225m
investment made on
the newly constructed
Porter Regional Hospital
500
jobs Fronuis
International
expects to bring to
the Portage area
Transportation
Healthcare
The Indiana Toll Road (I-80/90) runs east and west
Over 7,000 Porter County residents work within the
across the northern part of the County, providing
healthcare industry. Porter Heath System, a network
quick and easy access to Chicago and other
of hospitals, is the largest employer in the County.
Indiana cities such as South Bend. I-94 connects
With primary locations in Valparaiso and Portage, the
the area to Chicago and Detroit. US Route 41 heads
network covers Porter, LaPorte, Jasper, Newton, Pulaski
directly south to Jasper County. Amtrak, South
and Lake Counties. The Hospital is known for its cardiac
Shore, Canadian National and Norfolk Southern
care and accolades have been given in orthopedics,
railways connect the county to nearby cities.
gastrointestinal procedures and pneumonia care.
Education
Valparaiso University is a top academic institution
Hundreds of acres in parks and an expansive
located in Porter County. Just an hour east of Chicago,
lakefront make Porter County a very relaxing county.
the main entrance of the 320-acre campus is just off
Recreation in Porter County focuses on golf, country
US Highway 30. The growing university enrolls
clubs, nature parks, fitness facilities and recreational
around 4,000 students and has been named one
sports. The County is home to high-ranked beaches
of the best colleges in the Midwest. Additionally,
and Indiana Dunes National Lakeshore. The Dunes
Valparaiso University has a comprehensive visual
offers dozens of fishing hotspots, 70 miles of hiking
and performing arts program, a number of academic
and biking trails and 15 miles of sandy shoreline.
resources and is a Division I athletics member.
Shopping
Small, locally owned boutiques and well-known retail
chains present shopping opportunities to residents and
visitors in Porter County. A wide variety of products,
Photo credit:
www.in.gov/mylocal/porter_county.html
from unique antiques and art to apparel and accessories,
can be found in the many different stores in the region.
local demographics
2013 Estimates
Population
166,889
Households
63,096
$61,964
$200,995
Employed Population
81,137
43
PORTER COUNTY
INDUSTRIAL
Much like its neighbor Lake County, the steel
manufacturing industry plays a vital role in Porter
County’s economy. ArcelorMittal’s plant in Burns
Harbor employs about 6,000 workers and is a fully
integrated steel-producing facility with access to
Lake Michigan and nearby railways. The plant
produces $1 billion in revenue and primarily
serves the automotive industry. Additionally, the
U.S. Steel Corporation plant in Portage employs
about 1,550 workers and produces steel bringing in
about $105 million in revenue. The steel plants are
major tax sources for the County and account for
much of the economic development in the area.
The amount of actively marketed industrial space
decreased during the first two quarters of the
year and then remained stable, finishing 2012
with approximately 900,000 square feet. The most
significant decrease was seen in the warehouse
sector, down 35 percent over the course of the year,
a positive sign after the 22 percent increase in 2011.
The amount of flex space increased slightly, up
just over 100,000 square feet from 1st quarter.
Even with a decrease in the amount of actively marketed
square footage, asking rates experienced little change
from 2011. Average asking rates for general- industrial
and manufacturing space ranged from $3.50 to $4.50
per square foot, triple-net. Industrial flex space
ranged from $5.00 to $7.00 per square foot, triple-net.
Warehouse and big-box distribution space ranged from
$4.00 to $5.00 per square foot, triple-net. Asking rates
are expected to gradually increase as the demand and
competition for quality industrial space increases.
A Minnesota steel company, Ratner Steel Supply
Co., is planning to locate a new operation in Portage.
Ratner Steel Supply Co. says the more than $14 million
investment is expected to create 30 jobs by 2015. The
Company will build a massive steel service facility
at the Port of Indiana Burns Harbor in Portage.
Manufacturing company Fronius USA could have its
new North American headquarters in Portage completed
and up and running by year’s end. The project includes a
20,000 square foot office and a welding shop and service
center for Fronius’ products. Design and finish selection
work is almost complete and construction is slated to
begin in April and continue through September. About
100 employees could be located in Portage later this
year and up to 500 could be employed there by 2016.
1,200,000
1,000,000
Manufacturing
800,000
Warehouse
600,000
Flex
Other
400,000
Total
200,000
0
1st
44
2nd
3rd
4th
Pennsylvania-based scrap metal processing
company, Phoenix Services LLC, will open a
new 13-acre facility in Portage at the Port of
Indiana-Burns Harbor. The Company will also
install processing equipment at several locations
throughout the ArcelorMittal complex. The
Company expects to create up to 80 new jobs.
Despite a slight increase in the amount of actively
marketed square footage from the end of 2011 to
the end of the first quarter, the Porter County office
market rebounded over the last three quarters, ending
the year with approximately 420,000 square feet of
space. The amount of available general-office space
is expected to remain stable into 2013, although an
increase in available medical-office space is possible
as the demand to be near the new Porter Regional
Hospital continues to grow and medical users
look into new-construction space in that area.
Average asking rates experienced a slight
increase from 2011 but are expected to stay at
similar levels in 2013, especially rates for existing
medical office space as landlords continue to
compete with new medical-office construction.
Paul Wurth Inc., a steel and iron engineering firm,
has invested $3.6 million to buy, renovate and
equip a 55,000 square foot facility at 2800 E. Evans
Avenue in Valparaiso. The company expects to
create up to 40 new jobs over the next six years.
OFFICE
The medical industry continues to play an important
role in the growth of the Porter County office market.
The 430,000 square foot, $225 million Porter
Regional Hospital opened on the site of the
former Valparaiso Hospital campus located at
the northwest corner of US 6 and Indiana 49 in
Valparaiso. The transition from the old building
to the new $225 million facility was intended to
provide more efficient, modern care for patients.
The Medical Plaza, an addition to the Porter Regional
Hospital, opened during the fall. The three-story,
60,000 square foot facility is adjacent to the new
hospital building at 85 US 6 and is connected to
the Hospital via an enclosed
walkway. The plaza houses
the Cancer Care Center, the
Center of Women’s Health and
Class A
Class B
several physicians’ offices.
St. Mary
Medical
Center
opened its
new $17
Office Rates
$13.50-$17.50
million
Valparaiso
Health
Center at 3800 St. Mary Drive in Valparaiso. The
55,000 square foot outpatient facility provides
a wide array of services including family and
internal medicine, obstetrics and gynecology,
cardiology, neurology, general surgery, oncology,
pain management, weight-loss and bariatric
medicine, as well as integrative medicine.
Other medical projects in the area included the 60,000
square foot Medical Plaza, University Promenade and
the new Franciscan St. Anthony Health Hospital.
$9.50-$13.50
The first building of
University Promenade was
completed in December.
Medical users occupy the majority of the first floor of
the east building and plans have been presented for a
3,156 square foot office space for a Valparaiso medical
research business on the south side of the building.
The new Franciscan St. Anthony Health hospital, built
on the site of the long-vacant former Jewel grocery
store on Indian Boundary Road in Chesterton, is now
providing emergency medical care in the County’s
northern end. The $22 million, LEED-certified
facility houses an on-site laboratory, physician
offices and around-the-clock emergency care.
INSIGHT + ANALYSIS
45
Charter School of the Dunes broke ground on a
new 64,000 square foot school in Gary. The new
$11 million school building will be located at
the corner of Melton and Old Hobart roads.
The 31,500 square foot Portage University Center,
located at 6260 Central Avenue was completed
and serves Ivy Tech Community College, Purdue
University North Central, Indiana University
Northwest and Valparaiso University.
Abonmarche opened a new office in Portage.
The firm now has six locations, including South
Bend and Michigan City. The Company serves the
Northern Indiana communities with engineering,
architecture, surveying, planning, landscaping
architecture and development offerings.
The Portage-based Construction Advancement
Foundation broke ground on the new 7,000
square foot Safety Training Institute. The new
building is being constructed at a site adjacent to
the CAF’s headquarters. The facility is expected
to open in the second quarter of 2013.
RETAIL
46
The main retail submarket of Porter County is situated
within Valparaiso surrounding Valparaiso University.
Shopping centers in the area include Cumberland
Crossings, a redeveloped retail center that serves the
high-income areas; Market Place which includes bigbox tenants such as Kohl’s, Home Depot and Target;
Valparaiso Walk, which features national tenants Best
Buy, Michaels, Bed Bath & Beyond and Marshalls; and
the new Porters Vale, which includes JC Penney and a
39,000 square foot, 12-screen Cinemark Movie Theater.
Smaller retail pockets can be found along
Indian Boundary and State Road 49 in
Chesterton and along US Highway 6, Center
Avenue and Willowcreek Road in Portage.
The Porter County retail market saw little change
in the amount of actively marketed square footage
through 2012, starting the year with approximately
385,000 square feet of available space and ending the
fourth quarter down just under 2 percent with 378,000
square feet.
With the amount of space remaining nearly
unchanged, asking rates followed suit and remained
at levels similar to 2011.
Type
Range
New Construction
(1,000-5,000 SF)
$18.00-$20.00
2nd Generation
(1,000-5,000 SF)
$12.00-$14.00
2nd Generation
(Mid/Big Box)
$8.00-$10.00
Michigan-based Meijer Inc. took possession of the
former Kmart building on US 6 and Willowcreek
Road in Portage. The Company spent the year
renovating the site and the grocery retailer is expected
to open in 2013.
McDonald’s constructed a 4,500 square foot restaurant
at the southwest corner of Ameriplex Drive and
Olmstead Drive in Portage.
Texas Roadhouse opened a new 6,700 square foot
restaurant at 6130 US 6, just south of Menard’s and
adjacent to the new Panda Express restaurant. The
new restaurant seats about 245 people.
The White Castle restaurant, located at the Speedway
gas station at US 30 and Indiana 2, announced plans
to relocate to a vacant 3-acre lot on the southeast
corner of US 30 and Sturdy Road in Valparaiso.
Current plans include the construction of a 2,600
square foot building that will house the White Castle,
a 2,500 square foot retail building south of that on
Sturdy Road and a 5,000 square foot restaurant
building east of the White Castle.
PORTER COUNTY
The Portage Redevelopment Commission approved
the $590,000 sale of about 3.4 acres on US 6 to Family
Express. Family Express will construct a gas station,
convenience store and car wash on the site.
Full-service discount party store, Party Masters,
celebrated the grand opening of their new location at
6538 US 6. in Portage.
The former Porter County jail, which has been under
reconstruction for the last five years, is expected to
open by spring 2013. The building, which has been
repurposed for a home décor store and restaurant, is
located at 157 Franklin Street in Valparaiso. The home
décor store will occupy four floors and the restaurant,
Casa Del Mar, will be located on the building’s first
floor.
MULTI-HOUSING
Total Units
Average Units
28
4,150
148
98.30%
Smallest Property
30 units
Largest Property
432 units
Earliest Year Built
1965
Latest Year Built
2012
Average Year Built
1986
Rent and Occupancy
Average monthly rental rates remained at similar
levels for one-bedroom units from 2011. Average
monthly rental rates for two bedroom and threebedroom units increased from 2011 an average of
$50 and $150 per month, respectively. The average
occupancy rate significantly increased to 98.3 percent,
up from 93 percent in 2011. With a lack of new
construction, rates and occupancy are expected to
remain stable into 2013.
Apartment Size
Range
Average
1 Bedroom
$472-$1,022
$688
2 Bedroom
$625-$1,204
$812
3 Bedroom
$745-$1,316
$1,051
Construction was completed on a new apartment
complex located within The Village of Burns Harbor,
In Good Company’s “Traditions,” a 75-unit community
that has been certified “green” by the National
Association of Home Builders. Traditions, located at
341 S. Boo Road, is the first apartment community in
the State of Indiana to be certified as “green.” In Good
Company obtained a $6.5 million construction loan for
the green development on 40 lots purchased from the
Village in Burns Harbor in a single-family residential
area. The first of the 10 buildings was fully leased
before the official opening in August.
A 117-acre business park and luxury apartment
complex project has been proposed for construction
in 2013 on the east side of Indiana 49 between
Evans Avenue and Vale Park Road in Valparaiso.
The business park would consume approximately
45 acres of the total property and would contain
professional businesses as well as some light
industry. The remaining acreage would be used
for the development of 500 luxury apartments of
one to three bedrooms and would have the highest
rental rates in the City. The City’s Plan Commission
approved the rezone and the developers are in
the land planning process as the property will be
rezoned to a Planned Unit Development (PUD).
INSIGHT + ANALYSIS
47
At-A-Glance
Lake County’s location makes it easily accessible.
Just 30 minutes from Chicago, the region is a hub
in mid-America’s economic activity.
US Steel Corporation is the largest employer in
Lake County.
Much of Lake County’s productive lands have
been utilized in agricultural production, including
80,000 acres of corn and 50,000 acres of soybeans.
The County is not only part of Northwest
Indiana, but it is included as part of the Chicago
metropolitan area as well.
Photo credit:
www.joeyblsphotography.com
48
350K
size (SF) of Urschel
Laboratories Inc.’s new
manufacturing facility
$15M
cost to renovate
and expand Park
Shore Commons
3
# of new tenants
at Westfield
Southlake Mall
Lake County is Indiana’s
second-most-populated county
and is home to 495,558 people,
the majority of whom live
in Gary and Hammond. The
County is part of the Chicago
metropolitan area, making it an
attractive county for business. A
number of highways and railways
provide for quick transportation
to Chicago and other Indiana
cities. Manufacturing and
entertainment are two of the
most dominant industries within
the County.
local demographics
2013 Estimates
Population
166,889
Households
63,096
$61,964
$200,995
Employed Population
81,137
Transportation
The Indiana Toll Road (I-80/90) runs east and
Beyond the professional sports of Chicago, Lake
west across Northern Indiana, providing access to
County residents root for the Gary SouthShore
Chicago and other Indiana cities. I-94 is accessible
RailCats, an independent baseball team that belongs
in the northern part of the County and connects the
to the American Association of Independent
area to Chicago and Detroit. I-65 runs southeast
Professional Baseball. On average, the RailCats
to Indianapolis. US State Road 30 provides access
bring in about 3,218 fans per game and $490,000 in
to Valparaiso from the east and west, while State
annual sales. Home games are played at Gary’s US
Road 49 provides access from the north and south.
Steel Yard, conveniently located near I-90 and I-65.
Amtrak, South Shore, Canadian National and Norfolk
Southern rail lines connect the County to Chicago,
Shopping
Fort Wayne, South Bend and other nearby cities.
Located in Merrillville is a shopping center
owned by The Westfield Group, one of the largest
retail property groups in the world. Westfield
Since the 1990s, casinos have drawn people from
Southlake Shopping Mall consists of many major
Northwest Indiana and Chicago to Lake County. The
retailers and altogether a huge assortment of
three major casinos in Lake County are Hammond’s
169 retail stores and eateries. The Mall brings in
Horseshoe Casino, Ameristar Casino in East Chicago
visitors from nearby areas including Chicago.
and Majestic Star Casino in Gary. Collectively, these
casinos accounted for $200.4 million in revenue
and, according to the Indiana Gaming Commission,
bring in a combined 10.1 million people per year.
49
LAKE COUNTY
INDUSTRIAL
The steel industry plays an important role in the economic
makeup of the industrial market of Lake County.
ArcelorMittal and US Steel, two major steel producers,
have their largest North American steel facilities
located within Lake County. Diertech Industries, a steel
framing company, is also located in Lake County. The
steel industry continues to make strides in efficiency,
safety and technology leading to a substantial economic
impact on the region by bringing in thousands in
revenue and employing many of the region’s residents.
Lake County is also home to a leading oil refinery. Located
within Whiting, BP Whiting Refinery is the second-largest
in the BP refining system and the Nation’s sixth largest.
BP invests billions of dollars into Northwest Indiana to
modernize its refinery and employs thousands of full-time
employees, making it an economic powerhouse in the
area. The refinery produces gas oil, naphtha and more.
The industrial market was stable through 2012 as the
amount of total actively marketed industrial space
remained at approximately 5 million square feet from
the first quarter to the end of the fourth quarter.
With the
number of
out-of-county
relocations
down from
previous years
and nearly
nonexistent
new
construction,
the vacancy
rate was able
to stabilize.
Average asking rates for general-industrial
and manufacturing space range from $3.00 to
$5.00 per square foot, triple-net. Industrial-flex
space ranges from $2.50 to $8.00 per square foot,
triple-net. Warehouse and big-box distribution
space ranges from $1.75 to $7.25 per square foot,
triple-net. Rates are expected to remain constant
through 2013 as the economy picks up and
creates a greater need for industrial space.
Urschel Laboratories Inc. announced plans to
relocate from Valparaiso to a new $104 million
corporate headquarters and manufacturing
plant at Chesterton’s Coffee Creek Center. The
Company, which manufactures precision foodcutting equipment, has entered into a purchase
agreement with Lake Erie Land for 160 acres in
the Coffee Creek Center and plans to construct
a 350,000-square-foot manufacturing facility in
the second quarter. The company is planning
to be ready for occupancy in spring 2015.
Land O’Frost, a producer of pre-sliced, pre-packaged
lunchmeats and specialty sausage products,
announced that it will relocate its corporate
headquarters from Lansing,
IL to an unnamed 3-acre
campus in Munster. The
Company will construct
a new 25,000 square foot
facility this summer. The
Manufacturing
$6.4 million investment
Warehouse
is expected to create up
Flex
to 50 new jobs by 2014.
Other
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
Total
1,000,000
0
1st
2nd
It is expected
that the amount of actively marketed square footage
will decrease in 2013 as the number of new businesses
opening and relocating to the area increases.
50
2rd
Construction began
on Potash Corporation’s
136,000 square foot transfer
facility at Hammond’s
4th
Gibson Yard. The Company
will invest a total of $64
million to build the facility. Additionally, the Indiana
Harbor Belt Railway will spend $9 million to lay
track and build facilities to service Potash Corp., and
Hammond will spend $5 million for demolition and
other work. The project is expected to be completed
by spring 2014 and will create approximately 285
temporary construction jobs and 25 permanent ones.
Munster Steel left its long-time home in
Munster for a 123,000-square-foot building
in the West Point Industrial Park in
Hammond. The Company invested between
$5 million and $6 million in the move.
A Minnesota company constructed a solargenerating facility on 49th Avenue in Hobart. The
Company erected 4,576 solar panels on about
10 acres of a 50-acre parcel on 49th Avenue.
Construction of the facility began in the spring
and took about three to four months to complete.
Canadian National Railway announced
plans to scale back its expansion at Gary’s
Kirk Yard from $165 million and 251 jobs to
$141 million and 119 additional jobs. The
expansion, announced in August of 2011, is
still moving forward, but a planned locomotive
repair center will remain in Illinois.
The developers of Northwind Crossings
in Hobart began construction of a seventh,
speculative building in the industrial park. The
150,000-square-foot multitenant building, located
at 62nd Street and Northwind Parkway, has
room to accommodate three to five tenants.
Chester Inc. Architectural & Construction Services
of Valparaiso broke ground on a $17 million,
60,000-square-foot forging facility for Modern
Drop Forge Company at a new site in Merrillville.
The company announced in August 2011 that it
would relocate from Illinois to Indiana and bring
approximately 240 jobs to Northwestern Indiana.
Hobart’s City Council granted a tax
abatement to Becknell Development for a new
150,000-square-foot spec building. The facility
is being constructed at its Northwind Crossings
Business Park located off Mississippi Street
and is expected to create 75 to 100 new jobs.
The Hobart City Council approved a property tax
abatement for Indiana Land Becknell Investors LLS,
developers of the industrial park at Mississippi
and 62nd, to construct a 100,000-square-foot
building at 6301 Northwind Parkway that would
be solely occupied by ITR America LLC. ITR
America occupied 30,000 square feet of space
within the industrial park and plans to hire an
additional 20 employees upon their move to the
larger space. ITR America, which specializes in
heavy machinery equipment parts distributing,
will invest $6.2 on eight acres of land in the North
Wind Crossing Business Park for the expansion.
Merrillville’s Prime Conveyor was granted a 10year tax abatement to expand its existing facility
at 8903 Louisiana Street. The 12,000 square foot
production space expansion is expected to add
about three new positions at the business.
Huhtamaki Inc., a subsidiary of Finland-based
Huhtamaki Oyj, announced plans to invest $8.48
million into its Hammond facility located at 6629
Indianapolis Boulevard. As a result of increased
demand for its recycled paper products, the Company
will purchase additional manufacturing equipment
and will create up to 12 new jobs by 2014.
Kiemle-Hankins, an industrial repair and maintenance
service company, relocated from its Gary location to
a larger facility at 1011 E. Summit Street in Crown
Point. The larger facility allows for an expansion
of the power equipment service area as well as
improvements to the motor testing capabilities
and crane system. The project represents a more
than $2 million investment and the new facility
became fully operational in February 2013.
Positron Corp., a Central Indiana nuclear medicine
company, has announced plans to build a $65
million plant in Gary. The plant will employ
up to 50 people over the next five years.
INSIGHT + ANALYSIS
51
OFFICE
Northwest Indiana’s concentration of professional
office space is located in Lake County in
Merrillville along US 30 East near the intersection
of I-65 and along Broadway Avenue. Several
multi-tenant office buildings surround the
area, including Environ Professional Center,
Merrillville Corporate Center, Park Tower,
Merrillville Corporate Lakes, Park 84, Broadfield
Square North and Westfield Commons.
Purdue Research Park of Northwest Indiana,
located in the 386-acre AmeriPlex at the
Crossroads, is a research park modeled after
Purdue Research Foundation’s successful
incubation program in West Lafayette, IN.
The 60,000 square foot Purdue Technology
Center is the Park’s flagship technology
center and offers the community flexible
incubation space as well as shared office
services to emerging technology firms.
Community Hospital has partnered with Alliance Imaging
to offer another convenient location for Magnetic Resonance
Imaging services in Crown Point. An open house was held in
February to celebrate the addition of Community Hospital
MRI Center at 5363 Commerce Boulevard.
ClarkDietrich has signed a lease to occupy 4,161 square feet of
the 21,448 square foot One Professional Center in Crown Point.
The new office location comes after the formation of a joint
venture between ClarkWestern and Dietrich Metal Framing.
Methodist Hospitals of Merrillville broke ground in February
on a new $8 million emergency department at its Southlake
Campus. The new department is the latest in a series of
improvements the Hospital has been making at its Merrillville
campus at 8701 Broadway since 2010.
A new health center that provides free support for women
experiencing unplanned pregnancies opened in March
in Hammond. Women’s Care Center, located at 7127 S.
Indianapolis Boulevard, is sponsored by The Dorothy Abel
Purcell Pro-Life Foundation.
Heartland Blood Centers, located at 2125 45th Street in
Availability across the office market steadily
Highland, opened for business.
increased, beginning the year at approximately
1.1 million square feet of space and ending the
Construction of a 58-unit healthcare facility for older people
fourth quarter with slightly over 1.5 million
with memory loss began during the summer. The site, at
square feet
140 E. 107th Street in Crown Point,
of actively
is expected to employ about 12 to 14
marketed
people. The facility is located on one
space.
of three lots in the second phase of
Central Business
Suburban
Activity in
Beacon Hill.
District
the office
Office Rates
$8.35-$15.00
$8.50-$12.00
The Neonatal Intensive Care Unit
sector is
at Franciscan St. Anthony Hospital in
expected
Crown
Point
is
hoping
to
expand. The Hospital has been full
to pick up throughout 2013 and, if new
to capacity several times in its first year and has already begun
construction continues to be minimal, vacancy is
working with architects to design a way to best expand the unit.
expected to decrease.
As the demand for existing office space continues
to show positive growth, landlords will have the
opportunity to increase asking rents and reduce
the number of rent incentives that are currently
being offered to new and existing tenants.
52
Valparaiso-based IVDiagnostics LLC, a company that develops
tools to help determine the effectiveness of cancer treatments,
announced plans in May to expand their company by opening
an office in the Purdue Research Park of Northwest Indiana
located in Merrillville.
LAKE COUNTY
Teleperformance USA has announced plans to
expand the business and create 600 new positions
with the Company located at Northwind Crossings,
across from Menard’s off 61st Avenue in Hobart.
The Hammond INnovation Center announced
plans to open a second facility at the former
Harris Bank building at 5243 Hohman Avenue.
The original 9,000 square foot center, located
at 5209 Hohman Avenue, is fully occupied and
the need for additional space was identified.
The new building is about 30,000 square feet,
containing five stories and will allow for several
other businesses to grow out of the center.
RETAIL
The main retail trade area of Lake County is located in
Merrillville along US 30 East near the intersection of
I-65. The area is anchored by the Westfield Southlake
Shopping Center, the area’s largest shopping mall, which
features retailers such as JC Penney, Dick’s Sporting
Goods, Macy’s and Sears. Other big-box retailers in the
immediate area include Walmart, Target, Kohl’s, Bed
Bath & Beyond, and Toys “R” Us. Smaller retail pockets
exist within Crown Point, Hammond, Hobart and Gary.
The amount of actively marketed space within the
retail sector slightly increased throughout the year,
beginning with just under 1.8 million square feet and
ending the fourth quarter with approximately 1.98
million square feet of actively marketed space.
With an increase in space, average asking rates
remained stable throughout the year. Asking rates for
new-construction and second-generation buildings
fell slightly. Asking rates for big-box space also
experienced a decrease from rates seen in 2011. The
slight decrease in asking rates is due, in part, to the
increase in available existing retail space as well as
the amount of planned retail developments available
on the market that have yet to be occupied.
South Bend-based Peoplelink Staffing
Solutions has opened a new branch location
at 190 Bracken Parkway in Hobart.
A ribbon-cutting ceremony was held in October
for the new Indiana Farm Bureau Insurance
office at 194 Deanna Drive, Suite A, in Lowell.
The Merrillville Town Council has approved a
10-year real estate and personal property tax
abatement for Horizon Financial Management.
The business, which currently operates out of six
suites in the Chase building at 8585 Broadway,
will construct a new 20,000 square foot office in
the AmeriPlex at the Crossroads development
near 101st Avenue and Broadway. Investment
for the new facility is expected to be about $3
million, and the facility could house up to 240
employees. Construction began in March of 2013
and could take about five months to complete.
A ribbon-cutting ceremony was held in December
to celebrate the grand opening of the new labs
at the Water Institute and the Energy Efficiency
& Reliability Center located in the basement of
Purdue University-Calumet’s Schneider Avenue
Building in Hammond. The 2,000 square foot
Institute basement labs addresses the importance
of water and its relation to industry and the
environment, while the 1,000 square foot energy
lab conducts research on new energy systems.
Type
Range
New Construction
(1,000-5,000 SF)
$16.50-$22.00
2nd Generation
(1,000-5,000 SF)
$8.00-$11.50
2nd Generation
(Mid/Big Box)
$5.50-$8.00
INSIGHT + ANALYSIS
53
Two new businesses, Shirt Deli, which specializes in
screen printing and graphics, as well as All Starz 2 Barber
Shop and Beauty Salon, opened next door to each other at
322 and 326 Main Street in Hobart, respectively. Another
retailer, Von’s Victorian Tea Room, opened down the street
in November.
Bulk nut and candy store, Greco Nut and
Candy, opened a new store in Highland.
HHgregg Inc. has opened a store in
Highland, taking over the recently
vacated Borders bookstore space in the
Highland Grove Shopping Mall.
Westfield Southlake Mall of Hobart
welcomed three new tenants in February:
Cooper’s Hawk Winery & Restaurant in
summer and retailers Akira and Teavana
in spring. Cooper’s Hawk, which has its
main production facility in Countryside,
IL, will bring an estimated 125 new jobs.
Firehouse Subs celebrated its grand opening
in April at 8153 Calumet Avenue in Munster.
M&M Beauty Supply expanded its business
in Merrillville. Vacant land located at 16 W.
US 30 was purchased for the new location.
O’Reilly Automotive Stores, Inc. opened a new
store location at 10205 W. 133rd Avenue in
Cedar Lake formerly the site of a car wash.
Albert’s Diamond Jewelers celebrated the grand opening
of its new Merrillville location in Westfield Southlake Mall
in November.
New bookstore The Living Room has opened for business
at 135 S. Calumet Avenue in Chesterton.
MULTI-HOUSING
Rent and Occupancy
An overall increase in occupancy and rental rates
continues to create a positive outlook for the Lake County
multi-housing market. The market occupancy rate
increased 93 percent from 2011 to 95.5 percent at the end of
2012 and average lease terms remain around the 12-month
market. Rental rates for one-bedroom units remained at
similar levels to rates from 2011, while monthly rental
rates for two-and three-bedroom units experienced
a decrease of approximately $10-$80 per month.
Ross Dress 4 Less celebrated its grand opening
in July at 2550 E. 79th Avenue in Hobart.
A groundbreaking ceremony was held in August
to celebrate the start of construction on a new
Strack & Van Til store location in Cedar Lake.
The new grocery store replaces the old Wilco
County Market in Lincoln Plaza, located off
133rd Avenue and Parrish, and is expected to
open in the spring of 2013. The 50,000 square
foot store will also house a Centier Bank branch.
HGS Music has opened a second store location
at 1111 Breuckman Drive in Crown Point.
54
Total Units
Average Units
38
10,396
274
95.50%
Smallest Property
12 units
Largest Property
1,337 units
Earliest Year Built
1951
Latest Year Built
2008
Average Year Built
1977
LAKE COUNTY
Apartment Size
Range
Average
1 Bedroom
$525-$1,165
$750
2 Bedroom
$560-$2,103
$876
3 Bedroom
$689-$1,408
$1,100
Transactions
Miller Village Apartments sold for $9.3 million in December.
The property, a 246-unit income-based community located
in Gary, Indiana, includes one-, two-, and three-bedroom
units. The property was purchased with plans to renovate
and transform it into an all-purpose, affordable-housing
complex for low-income residents with a pilot plan
agreement in place. In total, the buying company plans to
spend $24 million, $9 million of which covered the purchase
price and $15 million to cover renovations and additions.
The complex is to be renamed Park Shore Commons.
Construction of a senior healthcare and living
facility, Bickford Senior Living, began in late
summer. The site, at 140 E. 107th Street in
Crown Point, is expected to employ about 12
to 14 people. The 58-bed facility is located on
one of three lots in the second phase of Beacon
Hill. The $4.5 million senior housing building
is expected to open next summer.
The Gardens on Carolina, a new incomebased senior citizen housing complex, broke
ground in May. The complex is currently
being built on a 1.55-acre parcel at the corner
of East 5th Avenue and Carolina Street in
Gary. The three-story, 39-unit, independentliving housing facility is expected to be
completed sometime in early 2013.
Brickshire Apartments, located at 9000 Lincoln Street in
Merrillville, is in the process of constructing Phase II of the
complex which includes nine new buildings with a total
of 164 units. The nine new buildings will include one-,
two- and three-bedroom units. One-bedroom units will
range in size from 718 to 756 square feet with rental rates
ranging from $945 to $1,014. Two bedroom floor plans are
expected to range in size from 872 to 1,196 square feet and
will cost $1,119 to $1,329 per month and some two-bedroom
units will include a sun room. Three-bedroom units will be
approximately 1,224 square feet and will range in price from
$1,389 to $1,404 per month. The first of the nine buildings
opened for residents in March.
INSIGHT + ANALYSIS
55
At-A-Glance
Lake Michigan is approximately 300 miles long
and 75 miles across, covering 22,300 square miles,
and has the world’s largest freshwater dunes.
local demographics
2013 Estimates
Population
494,793
Known as the “Napa Valley of the Midwest,”
Southwest Michigan offers many wineries within a
short drive along the Lake.
Households
188,147
$54,088
$160,823
The region is a national leader in the growth of
tart cherries and blueberries, while the State of
Michigan is an agricultural leader, producing
crops such as apples, strawberries, sweet corn,
cucumbers, cauliflower and many more.
Employed Population
220,995
Southwest Michigan is home to several public and
private higher-education institutions including
Western Michigan University and Southwestern
Michigan College.
Located along 50 miles of Lake Michigan, Southwest Michigan is an
attractive place to live, work and play. The region is nationally recognized as
one of the fastest-developing computer, software, telecommunications and
multimedia industries. Strategically located on the Chicago/Detroit and Grand
Rapids/Indianapolis vectors, Southwest Michigan is a site for growing industries
such as engineering, manufacturing and tool and die. The low cost of doing
business, excellent business climate and dynamic mix of work and lifestyle gives
the area a competitive advantage as an ideal and unique place for businesses
to locate and expand. Home to many established national and international
industry leaders, Southwest Michigan has been named one of Inc. Magazine’s
Top 50 Best Small Metro Areas.
56
Transportation
Shopping
The Southwest Michigan Regional Airport is
New fashions, hand-crafted furniture and décor, stylish
centrally located within the region, providing easy
jewelry and European Christmas ornaments are all goods
access to business centers and direct access to area
found in the local shops and boutiques within Southwest
tourist attractions. The airport houses 64 privately
Michigan. Orchard Mall, known as the “original shopping
owned aircrafts and several corporate aircrafts for
center,” contains 44 retail shops, dining options and a
businesses, including Fortune 500 and international
community center for meetings and year-round events.
corporations. Over 400 companies from all over the
United States and Canada utilize the local airport.
Two interstates, two federal, and eight Michigan
Southwest Michigan’s signature public beaches are
highways traverse the region, making major cities in
some of the top in the country. More than 250 inland
Indiana, Michigan and Illinois easily accessible.
lakes and five rivers engulf the area. Theatres in the
region rival some of the best venues. Located off of Lake
Education
Michigan on I-94, New Buffalo’s Four Winds Casino
Southwest Michigan is home to seven colleges
has 3,000 of the newest popular slots and table games
and universities including Lake Michigan College,
and excellent restaurants. Situated on 52 acres, the
Andrews University, Southwestern Michigan
Casino is the largest employer in the area, supporting
College, Western Michigan University, Kalamazoo
3,000 jobs, and brings in more than 4 million visitors
Valley Community College, Davenport University,
to New Buffalo. Revenue from the slot machines has
Kalamazoo College and Sienna Heights University.
generated over $20 million for the State of Michigan and
Over 111,000 students from all around the world attend
$4 million a year to the local government and agencies.
one of the various institutions of higher learning.
617.7K
1.6K
$114M
decrease in
available
flex space
(SF) due to
occupancy of
one facility
# of seats in
Four Winds
Casino’s
Silver Creek
Event Center
Harbor
Village’s
resort and
residential
first phase
development
57
SOUTHWEST MICHIGAN
INDUSTRIAL
The Southwest Michigan industrial market
is strategically located with access to several
main highways and interstates including US 31,
US 21, I-94 and I-80/90. This location provides
direct routes to Northwest Indiana, Chicago
and Detroit. Two commercial airports also
serve the area: Southwest Michigan Regional
Airport in Benton Harbor and the South Bend
Regional Airport. The industrial market is largely
concentrated in the cities of Niles, St. Joseph and
Benton Harbor within Berrien County. Primary
industrial parks within the area include Bertrand
Crossing Industrial Park, Niles Industrial Park,
Cornerstone Industrial Park, Three Oaks Industrial
Park, Edwardsburg Industrial Park, Cassopolis
Industrial Park and Marquette Industrial Park.
Cassopolis Recycling constructed two new
buildings on five acres at 849 Labar Drive
in the Cassopolis Industrial Park.
The amount of actively marketed square footage
decreased throughout the year across all industrial
types, with some fluctuation. Manufacturing space
increased from the first quarter to the second
quarter, but then decreased to 1.4 million square feet
at the end of the fourth quarter. Warehouse space
steadily decreased from the first quarter through
the year to approximately 1.3 million square feet.
Flex space significantly decreased through the
year, mainly due to the occupancy of the 617,000
square foot facility located at 415 E. Prairie Ronde
in Dowagiac, ending the year with approximately
330,000 square feet of space being marketed.
Florida-based Pratt Industries opened a third
Michigan Facility at 2070 S. Third Street in Niles
Township in the former United Fixtures building.
The manufacturer created 200 to 400 new jobs.
Average asking rates for general-industrial and
manufacturing space in the area ranged from
$0.95 to $3.25 per square foot, triple-net, with no
significant change from 2011. Average asking rates
for warehouse and distribution space ranged from
$1.50 to $2.95 per square foot, triple-net. Flex space
ranges from $1 to $2.67 per square foot, triple-net.
58
Vicker’s Engineering, a precision machining and
fabrication company, expanded its operations into
a 50,000 square foot space on South Third Street in
Buchanan, the old home of Bosch Rexroth Corp.
Vickers maintained its headquarters at its 120,000
square foot manufacturing plant in New Troy. Twenty
employees were relocated to the Buchanan building.
American Axle & Manufacturing Holdings Inc.
announced plans to hire around 300 more employees
in late 2012. The Three Rivers-based company
reconfigured parts of its production area as well as
upgraded equipment and other areas of the facility.
Hanson Mold, located on Hollywood Road in
St. Joseph Township, sought a tax abatement
to expand the mold and die manufacturing
business. The Company’s president announced
plans to spend $4.7 million over the next few
years to expand and purchase new machinery.
The expansion created six new positions.
Whirlpool Corporation announced that it will close
its Evansville refrigeration product development
facility by the end of 2014 and will centralize the
remaining jobs in Benton Harbor and St. Joseph. The
shift will add at least 180 new positions to the facilities
in Benton Harbor and St. Joseph. The Company
will also plan to spend $18.6 million to renovate the
existing facility in the Benton Harbor/St. Joseph area.
Riveer Environmental completed a $1.67 million
expansion at its facility located at 233 Veteran’s
Boulevard in South Haven. A 12-year, 50 percent
tax break was granted by the City Council for
the expansion, and the Company plans to hire an
additional 10 employees over the next two years.
A site plan was approved by the Three Rivers
Planning Commission in October for a 10,000
square foot expansion of the Tamara Tool, Inc.
facility in the Three Rivers Area Enterprise Park
on the City’s southwest side. The expansion to
the existing 12,000 square foot building will
create 11 new positions with the Company.
OFFICE
The primary office markets of Southwest Michigan
are located in the downtown areas of Benton Harbor,
St. Joseph, New Buffalo and Niles. A majority of
the office space is located within small strip centers
and storefronts. Whirlpool Corporation, Lakeland
Regional Health System, Four Winds Casino,
Andrews University and Southwestern Michigan
College continue to be the dominant employers
of the area, commanding the most space.
The medical office sector continues to generate
a significant amount of activity within the
Southwest Michigan market, as numerous
healthcare organizations have recently
completed, or are in the process of completing,
major renovation and expansion projects.
St. Joe Tool Co. has announced plans to begin a $1.2
million expansion in November. The Bridgman
parts maker has received a 12-year property tax
abatement that will allow construction of a new,
16,000 square foot building and add 12 full-time
jobs over the next two years. The new building
will be located behind the Company’s two existing
facilities at 11521 Red Arrow Highway.
Office Rates
Central Business
District
Suburban
$12.00-$14.50
$9.00-$13.00
Actively marketed office space within the Southwest
Michigan office market steadily increased throughout
2012, ending the year with approximately 685,000
square feet of available space compared to 492,000
square feet of available space at the end of 2011.
With an increase in the amount of available space,
asking rates remained consistent with rates of 2011.
The average asking rates for Class A space range
from $12.00 to $14.50 per square foot. The average
rates for Class B space range from $8.00 to $13.00.
INSIGHT + ANALYSIS
59
Lakeland Healthcare announced plans to construct
a $3.8 million residential hospice building adjacent
to the nursing home located off Cleveland Avenue
in Lincoln Township. The 17,000 square foot
building began construction in August 2012 and
is expecting work to be complete by June 2013.
Lakeland Medical Suites celebrated the opening of
its new 42,000 square foot facility located at 42 N. St.
Joseph Avenue in Niles. The new building brought
together practices from several different buildings
and emergency room space nearly doubled. The
three-story building is located across from Lakeland
Community Hospital. Expansion and renovation
work began in August 2011 on Lakeland Hospital’s
emergency department and was completed in
January 2013. The $7.5 million project features a
larger and more-open waiting room, two triage rooms
instead of one and 12 additional patient rooms. The
department size increased from 6,000 to about 16,000
square feet and includes 18 rooms and 21 beds.
Construction of the $10 million, 57,000 square
foot Lakeland Continuing Care-St. Joseph facility
began in July. The facility is located about four
miles south of its current location in Stevensville.
The first phase of the Whirlpool expansion in Benton
Harbor, which included the main entrance and
administrative part of the new campus, was completed
in April. The Company is currently working on
phase two of the three-phase investment project.
60
The Cass County Council on Aging (COA) opened
a satellite office location at 227 S. Front Street in
Dowagiac in May. A ribbon-cutting ceremony
was held to mark the grand opening of the
Council’s newest facility, Front Street Crossing.
Look Insurance opened an office in May at
224 N. Front Street in Niles. The space, located
in the historic John B. Reddick building, was
the former home to Studio 224 Salon.
Law firm, Tuesley Hall Konopa, opened a satellite
office at 21550 Shore Acres Road in Cassopolis. The
firm’s main office is in Downtown South Bend.
A new hospice center is under construction off
Cleveland Avenue in St. Joseph after a $1.5 million
donation. The Merlin and Carolyn Hanson Hospice
Center is located next to the new Lakeland Continuing
Care Center which is currently under construction.
The entire 18-acre complex is named after the
donors and will be called the Hanson Care Park.
Honor Credit Union celebrated its grand
opening in June at its new Napier Avenue branch
in Benton Township. The 2,500 square foot
building is located at 1873 E. Napier Avenue.
Edwardsburg’s first optometrist, Southwest Vision
Center, opened for business in July in a former Gold
Shop at 69001 M-62, suite E, next to Chemical Bank.
Monarch Bank relocated from its previous suite at
800 Ship Street in St. Joseph to suite 109 in the same
building in September. The 2,000 square foot space will
allow for additional business and the company has
hired two additional employees to support the growth.
SOUTHWEST MICHIGAN
Plans are underway for expansive renovations
to Lake Michigan College’s Bertrand Crossing
campus. The $1.3 million renovations will
feature improved science labs and new
classrooms. The project is expected to be
complete by the start of the fall 2013 semester.
At approximately 530,000 square feet, Orchards
Mall, located at M-139 and Napier Avenue, is the
largest shopping mall in Southwest Michigan. The
retail outlet is anchored by J.C. Penney and Elder
Beerman; other tenants include Finish Line, Bath &
Body Works, FYE and Jo-Ann Fabrics. In addition to
Orchards Mall, there are several big-box retailers in
the area such as Lowe’s, Meijer, Walmart and Home
Depot. The Fairplain Plaza Shopping Center, also
located in Benton Harbor, offers 325,000 square feet
of retail space and houses tenants such as Target,
TJ Maxx, Old Navy, Office Depot, Pier 1 Imports,
Rite Aid, Dollar Tree Stores and Dunham’s Sports.
The amount of actively marketed retail space
increased from just less than 1 million square feet
at the end of the first quarter to approximately 1.5
million at the end of the year. A lack of occupancy
in many of the larger strip centers and mid-sized
buildings has resulted in increased vacancy. Smaller
“mom and pop” type shops experienced a significant
amount of activity throughout the year, and it is
expected that the primary opportunities in 2013 will
continue to be in fill as opposed to new space.
Average asking rates for new-construction, secondgeneration, and big-box space remained stable and
generally unchanged from 2011. Asking rates for
new-construction spaces range from $12.00 to $16.00
per square foot, triple-net. Asking rates for smallshop, second-generation space range from $8.00 to
$12.00 per square foot, triple-net and big-box retail
ranges from $3.00 to $5.00 per square foot, triplenet. A general lack of retail activity in this market
accounts for the relatively unchanged asking rates
for most retail spaces. As tenant sales continue to
improve, consumer confidence increases, and the
overall unemployment rate continues to decrease, it
is expected that the Southwest Michigan retail market
will see an increase in activity over the coming years.
Michigan Small Business & Technology
Development Center (MI-SBTDC) has
opened a satellite office at Michigan Works
of Berrien, Cass and Van Buren Counties.
Chemical Bank opened a new branch at 433 W.
Main Street in Downtown Benton Harbor.
A ribbon-cutting ceremony and open house
were held in December to celebrate the
completion of renovation and expansion
work on Watervliet’s Lakeland Community
Hospital emergency department. The $4 million,
6,500 square foot project took about a year to
complete and includes 11 new private exam
rooms and upgraded amenities. Work done
to the emergency department is part of the
Hospital’s larger $11.5 million renovation project
expected to finish in the summer of 2013.
RETAIL
The areas surrounding The Orchards Mall
in Benton Harbor Township and South 11th
Street in Niles continue to be Southwest
Michigan’s main retail submarkets. Many of the
downtown areas in Berrien County, including
New Buffalo and St. Joseph, also feature a mix
of local and national retailers that primarily
cater to the Lake Michigan tourism industry.
INSIGHT + ANALYSIS
61
The Udder Place opened at 2328 E. U.S.
Highway 12 in Niles, the former location of
Country Café Again, which closed in 2011.
Sears Hometown Store celebrated its grand
opening in June. The store is located at
Orchards Mall in Benton Harbor.
Lakeside Parlor at Diamond Lake Golf Club, located
at 22041 M-60 East in Cass County, opened in April.
The Parlor features Ashby’s Sterling hand-dipped
ice cream in 20 flavors made in Sterling Heights.
The Baroda Village Council welcomed the Village’s
newest business – the Round Barn Brewery at 9151
First Street- in March. The brewery fills a vacant 10,000
square foot building down the road from Village Hall.
The brewery opened with two employees and expects
to add at least six more within the next two years.
The brewery also moved its production facility to a
new location in Baroda. The brewery worked with
an architect to design an “open-air” taproom in the
former South Shore Tool and Die facility. The 10,000
square foot facility began production in July of 2012.
Popular destination restaurant Hannah’s and Harry’s
in New Buffalo reopened under new ownership and
a slightly different name on May 31 after being closed
for three years. The restaurant occupies the former
Hannah’s restaurant on Whittaker Street, just south of
US 12.
Four Winds Casino of New Buffalo began major hotel
expansions this summer. Additions include 250 extra
rooms in a new tower and an event center with seating
for 1,600. The casino also celebrated the grand opening
of a Hard Rock Café restaurant in September, one of
only two in the entire state. The 12,000 square foot
café includes seating for more than 275 guests and
more than 150 pieces of rock n’ roll memorabilia.
62
Plans for a Four Winds Casino in Dowagiac
were approved and will open for business
in the summer of 2013. The casino will also
include an in-house restaurant, Timbers.
Olfactory Hue Bistro, a restaurant offering
customers local, organic, and sustainable foods,
opened for business in Downtown Niles May 3.
Hopman Jewelers leased a storefront at
202 S. Front Street in Dowagiac.
Healthy Style, which specializes in selling
Herbalife nutritional products, leased a
storefront at 228 S. Front Street in Dowagiac.
Fat Cam’s at Garver Lake, a new
Edwardsburg restaurant located at 25020
May Street, opened for business.
A new fabric and yarn store, Lighthouse
Fibers, celebrated its grand opening in May at
404 State Street in Downtown St. Joseph.
The automotive dealership, Bennett Motor
Co., opened for business on May 14 at
26472 Main Street in Edwardsburg.
Third Coast Surf Shop celebrated its grand
opening in May at its new location at 110-C N.
Whittaker Street in New Buffalo. The new surf
and beachwear retailer nearly tripled its space
from its previous location at 22 S. Smith Street.
SOUTHWEST MICHIGAN
A ribbon-cutting ceremony was held in December
to celebrate the start of construction on a new 20,000
square foot Tyler Honda dealership in Benton
Charter Township. The new dealership is located at
4356 Red Arrow Highway. The $2.5 million facility
is located just north of the new Meijer store.
28
Total Units
5,404
Average Units
193
93.50%
Middle Eastern-inspired restaurant, La Pita,
|opened for business in September on Niles Road
in St. Joseph.
Smallest Property
24 units
Largest Property
707 units
Earliest Year Built
1922
Moe’s Southwest Grill has opened a new 2,200
square foot restaurant location at 3260 Niles Road
in St. Joseph.
Latest Year Built
2004
Average Year Built
1981
St. Joseph City Commissioners approved the
planned unit development permit for the $114
million Harbor Village resort and residential
project this month. The first phase will include
a 97-room hotel, condominiums, a marina,
a public walkway and parking lot. Later
phases will include additional condos and
cottages. Construction began in November.
Construction is underway on a new Menard’s
home improvement store located south of
Broadway and west of US 131 in Three Rivers.
The store is expected to open in 2013.
New Chinese cuisine and Japanese sushi restaurant
Ho Ping Garden opened for business in October
at 1962 S. 11th Street in Niles at Belle Plaza.
MULTI-HOUSING
Rent and Occupancy
Average monthly rental rates remained at similar
levels for one-bedroom units from 2011. Average
monthly rental rates for two-bedroom units
increased from 2011 an average of $40 per month.
Average monthly rental rates for three-bedroom
units also experienced a significant increase from
2011 by approximately $65 per month. The overall
occupancy rate decreased from 96 percent in 2011
to 95 percent in 2012.
Vineyard Place apartment complex, located in
Dowagiac, is planning a $4.8 million renovation in an
effort to retain its vitality. The complex has applied for
permission to renovate the property with tax credits
from the Michigan State Housing Development
Authority (MSHDA). As part of the process, a
payment in lieu of taxes (PILOT) will be developed.
Rehab work continues at Watervliet’s Cottage
Grove Apartments located on Red Arrow Highway.
Currently, only one of the four apartment buildings
is occupied, while renovation work continues on the
other three buildings. The one-year discount on sewer
rates awarded to the complex last year to help the
new owners with the upgrading project expired in
December.
Construction work on Southwestern Michigan
College’s third residence hall is underway and on
track. The on-campus housing building is expected to
be ready by fall of 2013.
Apartment Size
Range
Average
1 Bedroom
$343-$689
$498
2 Bedroom
$440-$1,050
$650
3 Bedroom
$530-$1,090
$750
INSIGHT + ANALYSIS
63
At-A-Glance
Over 40,000 students attend one of the five colleges
and universities within the region.
Nationally known for its vineyards and orchards,
the region’s fertile land has produced some of the
award-winning wines and juices in America.
Kalamazoo is known as the “Bedding Plant Capital
of the World,” home to the largest bedding plant
cooperative in the United States.
Kalamazoo County is located
in Southwest Michigan and is home to
266,492 residents. Its position between
Chicago and Detroit gives the region
access to the benefits of the two major
metropolitan areas without the higher
cost of living. The Economic Development
Department provides resources to
grow, relocate or start a business.
Two nationally recognized healthcare
systems, diverse housing stock, wellmaintained roadways and an awardwinning wastewater treatment plant
contribute to the growth of Kalamazoo
County. With access to over 400,000
university students and a talent-driven,
skilled workforce diversified in primary
industry sectors, the region remains a
leader in medical devices, pharmaceuticals,
design-based manufacturing, packaging,
agriculture and food processing.
64
local demographics
2013 Estimates
Population
266,492
Households
102,981
$56,338
$127,865
Employed Population
117,500
Transportation
Interstate 94 runs north along Lake Michigan and connects the area
to Chicago and Detroit. The I-94 Business Loop begins on I-94 and
loops for 11 miles from the I-94 freeway and through Downtown
Kalamazoo. US Highway 131 runs through the county as well as
the entire State of Michigan, connecting the County to metropolitan
areas. Other major highways serve the County, allowing easy travel
to other cities. Four major airlines service Kalamazoo-Battle Creek
International Airport and provide daily services throughout the
country. Metro Transit provides residents with a fixed-route bus
service through the Kalamazoo urbanized area. Amtrak provides
rail passenger services nationally, while Norfolk Southern and
CN North America provide freight service to the region.
Education
The three largest educational institutions in Kalamazoo County are
Western Michigan University, Kalamazoo College and Kalamazoo
Valley Community College. WMU has been recognized as one of the
top 100 public universities in the Nation by the US News and World
Report. The campus offers more than 230 academic programs and
NCAA Division 1A collegiate athletic programs. Job preparation
is a high priority of the educational system within the region.
Kalamazoo County’s location puts it just 40 miles from Lake Michigan.
Throughout the area there are opportunities to ski, horseback ride,
jog and cycle. The City of Kalamazoo also offers many of the cultural
attractions that you would find in larger metropolitan areas such
as museums, theatres, dance, music, restaurants, three ski resorts,
award-winning wines in the local vineyards and four nearby casinos.
The County has sports teams that include the Kalamazoo Wings,
a mid-level professional ice hockey team; the Kalamazoo Kings, a
baseball team part of the Eastern Division of the Frontier League;
and college athletic teams from the universities in the region.
3
10%
330K
# of Dunkin’
Donuts
planned
for the
Kalamazoo/
Portage area
decrease in
available
industrial
square
footage
size (SF)
of Western
Michigan
University’s
School of
Medicine
renovation
project
Shopping
Many unique shops and well-known retailers are located in
Kalamazoo County. The Crossroads, located in Portage, MI, includes
over 100 retailers. Kalamazoo Mall features over 160 retailers
consisting of eclectic shops and one-of-a-kind restaurants.
65
KALAMAZOO COUNTY
INDUSTRIAL
increased slightly over the first two quarters of the
year and then decreased through the two remaining
quarters to end the year with approximately 3.35
million square feet, down nearly 10 percent from the
end of 2011. Manufacturing and warehouse space
experienced a decrease in
available space while flex
space increased slightly.
With a downswing in
the amount of actively
marketed square footage
Manufacturing
at the end of the year, it
Warehouse
is anticipated that the
Flex
amount of available
Other
space will continue to
Total
fall going into 2013.
Kalamazoo County’s central location along Interstate
94, which connects Chicago to Detroit, makes it an ideal
location for industrial users. The majority of industrial
space is concentrated on Sprinkle Road just south of
the interstate. Midlink Business Park, a mixed-use
development
that was
the former
4,000,000
General Motors
plant, offers
3,500,000
1.7 million
3,000,000
square feet of
2,500,000
industrial-flex
2,000,000
space, 88 acres
of vacant land
1,500,000
for industrial
1,000,000
development,
500,000
dual rail
service and
0
1st
2nd
3rd
truck court
with secure
access along
I-94 at the Sprinkle Road exit. Other industrial parks
in the immediate area include Davis Creek Industrial
Park off Cork Street, Portage Commerce Industrial Park
and Portage Industrial Drive Industrial Park. Industrial
areas within the City of Kalamazoo are located along
Business I-94 and north of the City. Groves Industrial
Park is a newer industrial/R&D park area along
9th Street in Texas Township and features tenants
such as KVCC, MTEC and Bronson Athletic Club.
Looking ahead to 2013, two of the biggest challenges
for Kalamazoo County’s industrial sector will be the
limited land zoned for heavy industrial and the scarcity
of infrastructure (highway access, heavy power, and
rail access). Additionally, while there is a significant
amount of demand for it, there is a deficit of available
product in the 25,000 square foot plus range with 20’
or greater ceiling heights. Given the limited supply of
newer industrial product in the market, landlords are
not being as aggressive with incentives and tenants are
seeking move-in-ready options outside the County.
66
Asking rates for
general-industrial and
4th
manufacturing space
range from $2.00 to
$3.25 per square foot, triple-net. Industrial-flex space
ranged from $3.00 to $4.50 per square foot, triple-net.
Warehouse and big-box distribution space ranged
Midlink Business Park saw the most amount of
activity, including the announcement of Hark
Orchids’ plans to construct its first US facility
measuring 30,000 square feet at the Park. The
Company specializes in orchid breeding and hightech agriculture. Logistics company Kenco leased
an additional 100,000 square feet adjacent to its
existing 210,000 square foot facility at Midlink.
As part of its expansion plans, Imperial Beverage
moved into the former American Greetings 606,439
square foot building on Emerald Drive and relocated
their operations into a portion of the building leaving
approximately 400,000 square feet of rentable space
L i m i te d
c o ns tr uc t i on
c o up l e d
wit h l i mi ted
d em and
s u s t ai n e d
v ac anc y
ra te s
Warehousing and distribution company, Kenco,
leased 100,000 square feet of additional space
adjacent to their existing 210,000 square foot
facility at the Midlink Business Park in Comstock
Township. The expansion created approximately
12 new positions within the Company.
Sigma Machine relocated to the Midlink
Business Park in an effort to accommodate the
business’s growth. Sigma now occupies 21,664
square feet at the Park and has room to grow
up to 74,000 square feet. The stainless steel and
aluminum machining manufacturer has brought
30 employees to their new business location.
Manufacturing company Mueller Copper Tube
Products Company, located at 6700 Sprinkle Road
in Portage, has asked for a 12-year tax break on
their $26.5 million expansion that could create
up to 78 new jobs over the next two years. The
Company has proposed $2.6 million in real
property improvements, and $23.9 million in
personal property investments for the purchase
and relocation of equipment and machinery.
Kalamazoo auto parts maker Summit Polymers,
Inc. has announced plans to invest $9.3 million
at its facilities in the cities of Portage and
Sturgis, and in the village of Vicksburg. The
expansion will create a total of 70 new jobs.
OFFICE
Kalamazoo County’s office market showed
signs of stability in 2012. Limited construction
coupled with limited demand sustained vacancy
rates with no notable increase for the year.
Kalamazoo’s downtown submarket remained
healthy in 2012, posting a 12.6 percent vacancy
rate at year-end. The majority of the vacancy
in Downtown Kalamazoo is within the former
Kalamazoo Gazette building at 401 S. Burdick
Street. Phoenix Properties, the owner, has signed
a lease for a restaurant to occupy a portion of
the first floor, and also indicated they have
letters of intent out, with plans to announce new
tenants at the start of 2013. Absorption of just
half of this 130,000 square foot building would
drive the downtown vacancy rate to below
10 percent and could help boost downtown
rental rates above their weighted average of
$14.56 per square foot, modified gross.
INSIGHT + ANALYSIS
67
Kalamazoo County’s suburban submarket did not fare
as comparatively well as the downtown submarket
in 2012, with a vacancy rate of 22.1 percent. There is
a negligible difference between asking rates between
downtown at $14.56 per square foot, modified gross
and suburban properties at $14.07 per square foot,
modified gross, which has pushed some tenants to
choose downtown properties over suburban ones.
The Quads building on Romence Road has 300,000
square feet of office space available. Removing this
vacancy from the inventory would drop the suburban
vacancy rate to 11.5 percent. In 2013, the market will
watch the former Pfizer Headquarters building at 6901
Portage Road. This vacant 300,000 square foot singletenant office building will likely be redeveloped into
a multi-tenant property due to limited demand for
single-tenant facilities of this size in the Kalamazoo
marketplace. The addition of this property to the multitenant office survey could have a negative impact
on vacancy and rental rates for the submarket.
Construction started on Western Michigan University’s
(WMU) School of Medicine at the former Upjohn
Research and Development building in Downtown
Kalamazoo. WMU will completely renovate the
330,000 square foot building at 251 E. Lovell Street,
which is scheduled to open in August 2014.
Mophie, the “juice pack” power cell maker for the
Apple I-Phone, purchased 4.28 acres in Western
Michigan University’s Business Technology &
Research Park. The tech company will construct a
30,000 square foot building to house its distribution
operations, which are currently based in Paw Paw.
Design firm C2AE opened their fifth Michigan office
location at 211 E. Water Street in Downtown Kalamazoo.
The Miller Johnson Law Firm relocated from 303 N.
Rose Street to 18,000 square feet in the Radisson Plaza.
PNC Bank relocated its Kalamazoo operations from
108 E. Michigan Street to the Varnum building at
251 N. Rose Street.
68
Digital advertising agency Biggs|Gilmore capped
off a second year of unprecedented growth by
adding 12 new employees to its staff in Kalamazoo.
Biggs|Gilmore has offices in Kalamazoo and
Chicago and some of its key clients include
Heinz, Kellogg Co. and Kimberly-Clark.
The Miller Johnson law firm relocated from
303 N. Rose Street to an 18,000 square foot
space on the second floor of the Radisson
Plaza business suites in May.
In June, the Blind Training Center completed
a $3.5 million renovation of its facility at
1541 Oakland Drive in Kalamazoo.
Borgess Medical Center opened its new surgical
“hybrid” operating suites. The hospital is one of the
first in the United States to employ the FlexMove
system by Phillips Electronics. The new 1,000
square foot suites and control station required the
redesigning of existing space and installation of new
equipment for a total investment of $4 million.
Allstate Insurance Co. opened an office location at 531
N. Grand Street. The agency is the first tenant to locate
in a new, unnamed retail center in Schoolcraft.
Bronson Healthcare celebrated the groundbreaking
for a new 76,300 square foot rehabilitation and
skilled nursing community, Bronson Commons.
The new facility is expected to be completed
in August 2013. The center will be located at
23332 Red Arrow Highway in Mattawan and
is expected to employ around 150 people.
The expansion of Kalamazoo’s Family Health
Center, located at 117 W. Paterson Street,
was completed in August. The $10.3 million
expansion is expected to nearly double the
number of patients seen by the health facility.
KALAMAZOO COUNTY
Lynx Network Group, one of six companies
working to create a fiber optic network to connect
businesses, schools, and others to high-speed
internet in Kalamazoo, has occupied a space in
the Business Technology and Research Park at
Western Michigan University. The Company
expects to add 10 positions by the end of 2013
and another 10 to 12 by the end of 2014.
remained relatively unchanged in 2012 from the
end of 2011, with 1.24 million square feet of space
on the market. With the amount of new businesses
opening in the Downtown area, the amount of
unfilled and available retail space shrank slightly.
With the recent flurry of activity, coupled with
limited ground-up development opportunities,
vacancy is expected to decrease into 2013.
Similar to the amount of available space,
average asking rates remained at similar
levels to 2011, although landlords are getting
less aggressive with leasing concessions.
RETAIL
Type
Range
New Construction
(1,000-5,000 SF)
$15.50-$19.50
2nd Generation
(1,000-5,000 SF)
$8.00-$12.00
2nd Generation
(Mid/Big Box)
$8.00-$10.00
The primary retail markets within Kalamazoo County
are located in Portage and Kalamazoo. The Portage
retail area is anchored by the 770,000 square foot
Crossroads Mall, which features over 100 retailers
including Sears, Macy’s, JC Penney and Burlington
Coat Factory. Other big-box retailers along Westnedge
Avenue include Kohl’s, Target, Best Buy, Petco, Toys
“R” Us, Old Navy, Home Depot, Lowe’s, Menard’s,
Meijer and TJ Maxx. Kalamazoo’s main retail area is
centered around Western Michigan University with
Maple Hill Pavilion, Stadium Shoppes, Campus
Pointe, West Century Center and Westnedge
Shopping Center. Major tenants in the area include
Target, Hobby Lobby, PetSmart, Pier One Imports,
Office Max, Meijer, Walmart, Lowe’s and Kohl’s.
Activity was robust for Kalamazoo County’s retail real
estate sector in 2012. Several new retailers entered
the market including Dunkin’ Donuts, Tim Horton’s,
Five Guys Burgers and Fries, and Five Below.
Limited retail development opportunities are available
along the main retail corridors of Westnedge and
West Main in Kalamazoo County. This limited supply
will likely push developers to look at other areas
to take advantage of pent-up demand. Areas with
opportunity for retail development in 2013 include
south of Romence on Westnedge and Shaver Road.
Sack of Donuts, LLC acquired franchise rights
to open eight Dunkin’ Donuts shops in Northern
Indiana and Southwest Michigan and plans to open
three locations in the Kalamazoo/Portage area.
The first opened in the summer in the Kalamazoo
Crossings retail center. The 1,800 square foot shop
was built just west of Jimmy John’s in the center
and seats approximately 30 people.
Five Guys Burgers and Fries celebrated its
grand opening in June at the Southland Mall on
Westnedge Avenue in Portage. This is the first Five
Guys to locate in West Michigan.
Teen discount retailer, Five Below, celebrated
its grand opening at 6284 S. Westnedge Avenue.
The clothing and accessory retailer is located in
Portage next to Five Guys Burgers and Fries in the
Southland Shopping Center.
Dick’s Sporting Goods announced plans to utilize
50,000 square feet of the 120,000 square foot former
Big Kmart building at 6355 S. Westnedge Avenue
in Portage.
Tim Hortons Café & Bake Shop occupied a 3,800
square foot space at the former Fazoli’s restaurant
location at 5709 S. Westnedge Avenue in Portage.
INSIGHT + ANALYSIS
69
American Freight Furniture and Mattress opened for
business at the former Vermeulen’s Furniture Store at 501
Mall Drive in Portage. The 28,000 square foot building
is located just north of the Art Van Furniture Store at the
entrance to The Crossroads Mall.
Arcadia Brewing Co. will locate a brewpub and
production facility at 701 E. Michigan Avenue
in Kalamazoo. The 30,000 square foot facility
is expected to employ around 40 people and
should be fully operational by winter 2013.
Kalamazoo’s Metro Toyota celebrated multimillion- dollar renovation work with a grand
opening celebration at its facilities at 5850 Stadium
Drive. The business added 18,000 square feet to
its 40,000 square foot building to include separate
service drives for its Toyota and Jaguar car lines,
more parking, four express-lube bays, an improved
car wash, as well as a new customer waiting
area with internet stations and a fireplace.
Educational Community Credit Union expanded
at 315 E. Saint Joseph Street in Paw Paw. The
expansion nearly tripled the size of the office, adding
approximately 2,400 square feet to the interior space.
The project also included the addition of a drivethrough and a 24-hour automated teller machine.
Hobby Lobby has announced plans to occupy
approximately 52,000 square feet of space
within the 6300 block of South Westnedge
Avenue in Portage. The arts-and-crafts retailer
has signed a lease to occupy part of the space
that formerly housed a large Kmart and Ace
Hardware store. The new Hobby Lobby location
is expected to open for business in the spring.
DirtBag Brewing Co. has announced plans to open
a brewpub in the 14,000 square foot building that
is currently home to Journey Family Church in
Gobles. The church is planning to build a new
structure on the north side of Gobles. The brewery
will feature an open floor plan with roll-up doors
that will allow access to the 33.5-mile Kal-Haven
Trail that links Kalamazoo to South Haven.
The Microtel Inn & Suites located in Texas
Township opened for business in May. The
property, located at 5581 S. 9th Street, had
been under construction since 2008.
70
MULTI-HOUSING
Rent and Occupancy
Market fundamentals continue to improve, evidenced
by the decline in vacancy and overall increase in
rental rates as well as new construction, creating a
positive outlook for the Kalamazoo County multihousing market. Market vacancy decreased from 96
percent in 2011 to just below 97 percent in 2012.
Total Units
Average Units
23
3,424
149
96.90%
Smallest Property
6 units
Largest Property
497 units
Average monthly apartment rates significantly increased
from 2012, an average of $110 for one-bedroom units, an
average of $75 for two-bedroom units and an average of
$57 per month for three-bedroom units. As renovations,
upgrades and new construction continue, paired with
a rebounding economy and the desire among young
professionals to rent versus own, vacancy is expected
to remain at low levels throughout 2013. The significant
range seen among apartment sizes in this market
is attributed to the wide variety of one-, two- and
three- bedroom units in the Kalamazoo County multihousing market. Units priced on the higher end of the
range are luxury, loft or penthouse-style apartments
located in the Downtown area and generally include
unique and exceptional amenities such as whirlpool
tubs, high ceilings, exposed brick and steel as well
as central air conditioning. Many of these units are
waiting-list-only and include custom floor plans.
KALAMAZOO COUNTY
Apartment Size
Range
Average
1 Bedroom
$450-$3,000
$697
2 Bedroom
$539-$1,890
$880
3 Bedroom
$810-$1,500
$1,082
Transactions
Kalamazoo’s Lake Forest Apartments were sold
on October 31 and will now be named Greenhill
Apartments. The 292-unit luxury apartment
community is located on West Main Street. The
40-acre development sold for $19,150,000.
Renovation work was completed at the Peregrine Plaza
building located at South Street and the Kalamazoo
Mall. The $2.4 million project was completed over
the summer. Owner and real estate mogul Tom
Huff has converted the second floor of the building
into 16 upscale apartments; eight of which are twolevel, penthouse-style residential units with walkout decks and balconies. The homes range in size
from 1,500 to 2,000 square feet, and monthly rental
rates range between $1,700 and $2,000. Retail stores
and other businesses are expected to fill the space
on the first floor of the building. Plans have also
been formulated by Huff for another project: the
development of 16 apartment units on the upper floors
of the former Walgreens building on the Mall, which
currently houses Urban Salon and Terrapin on the
first floor. The adjacent building, which is currently
occupied by Fandango Tapas Bistro, will house eight
apartments on its upper floors in the coming years.
Construction on Prairie Gardens, a $2.4
million senior housing development, began
in April. The 32-unit, mixed-income, senior
housing development is located in Kalamazoo’s
Fairmont neighborhood. The City provided
Western Michigan University with $2 million to
demolish the former sanitarium and transferred
the property to the Kalamazoo County Land
Bank. Phase one, which included 14 duplexes,
a central garden, walking trail and pavilion,
was completed in December of 2012.
The former Merrill Residence for seniors, located
at Lovell and Park Streets, is being converted
into 37 larger apartment units for young
professionals in Downtown Kalamazoo. The
former assisted-living facility began renovation
and construction in June and is expected to
open by the end of October 2012. The renovated
units are expected to change names from
Merrill Residence to 475 Lovell Square.
Walden Woods, a community of duplex
condominiums in Kalamazoo that is being built
in phases on The Arboretum, will include 136
units and are being sold in seven different floor
plans ranging from 1,200 to 2,000 square feet.
The starting price for these units is $219,000. A
grand-opening ceremony was held to celebrate
the start of construction on the first phase.
INSIGHT + ANALYSIS
71
OUR PROFESS
Headquarters
South Bend
President and CEO
[email protected]
Al Koch, CPM
Office & Industrial
[email protected]
Steve Ellison Kara McGuire
Autumn Psaros William E. Frasch, SIOR
Bryse Toothaker
Dan Skodras, CPA
Brad Toothaker, CPM, SIOR
Senior Vice President
[email protected]
Vice President
[email protected]
Merlin Bellinger
Vice President
[email protected]
Rudy yakym iii
Vice President
[email protected]
Jamie Ruiz
Asset Services
[email protected]
Joe decola
Managing Director
[email protected]
Retail
[email protected]
Industrial & Retail
[email protected]
Industrial & Office
[email protected]
janee carlile
Managing Director,
Corporate Services
[email protected]
Transaction
[email protected]
Greg Pink Marketing
[email protected]
Industrial
[email protected]
John Mester Office & Retail
[email protected]
John O’Brien, CCIM Industrial & Retail
[email protected]
Shawn Todd Office
[email protected]
Alyssa Wertz brYce matteson Marketing
[email protected]
lauren brown
Marketing
[email protected]
Mary Willkom
Research
[email protected]
where
to find us
South Bend
Headquarters
112 W. Jefferson Blvd., Suite 300
South Bend, IN 46601
T 574.237.6000
F 574.237.6001
Follow us on twitter!
72
@bradley_company
@bradleyco_list
SIONALS
Elkhart/GOSHEN
Warsaw
Jeremy McClements Gary Salyer Industrial
[email protected]
Retail & Land
[email protected]
Lori Snyder
Kirk Zuber
Retail & Office
[email protected]
Industrial & Retail
[email protected]
Randall Lipps
matt boren
Retail & Office
[email protected]
Retail & Industrial
[email protected]
Steve Pettit, CCIM
Wayne Luchenbill
Industrial
[email protected]
Industrial & Investment
[email protected]
Therese Geise
Karissa Deardorff
Office
[email protected]
Admin
[email protected]
Southwest
Michigan
Dane Davis
Industrial & Office
[email protected]
Jodi milks, CCIM
Retail & Office
[email protected]
Kara Schroer
Retail & Office
[email protected]
Marc Tourangeau
Industrial & Office
[email protected]
DebbY ROBERTS
Admin
[email protected]
northwest
indiana
Jay Pouzar
Industrial & Retail
[email protected]
Todd Dickard, CEcD Industrial
[email protected]
Elkhart
Michigan City
Warsaw
Kalamazoo, MI
300 NIBCO Pkwy, Suite 250
Elkhart, IN 46516
T 574.522.7100
One Cadence Plaza
Michigan City, IN 46360
T 219.879.6200
120 S. Lake St.
Warsaw, IN 46580
T 574.267.2323
5136 Lovers Ln., Suite 108
Kalamazoo, MI 49002
T 269.327.0089
Goshen
Merrillville
fort wAYNE
Edwardsburg, MI
1926 W. Lincoln Ave.
Goshen, IN 46526
T 574.534.9213
357 W. 84th Dr.
Merrillville, IN 46410
T 219.650.6500
111 East Ludwig Rd., Suite 101
Fort Wayne, IN 46825
T 260.423.4311
68748 Southshore Dr.
Edwardsburg, MI 49085
T 269.699.9970
bradleyco.com
73
BROKERAGE OFFICES
Lake Michigan
Van Buren
Kalamazoo
Calhoun
Cass
St. Joseph
Branch
Berrien
LaPorte
Lake
St. Joseph
Elkhart
Porter
Starke
Marshall
LaGrange
Steuben
Noble
DeKalb
Kosciusko
Whitley
Newton
Jasper
Pulaski
Allen*
Fulton
Miami
Howard
Wabash
Grant
Huntington
Wells
Blackford
Adams
Jay
*Bradley Company/NAI Harding Dahm
* Bradley Company/NAI Harding Dahm
74
BRADLEY COMPANY
OVERVIEW
YOUR ADVANTAGES
Unparalleled local market knowledge through
research, providing the most supportable and
current information with which our clients
can make informed, timely decisions.
OUR CREDENTIALS
Staff experience that provides thorough
coverage of all submarkets and all product
types in the shortest time possible.
Full-service
brokerage
capabilities that
offer an insightful
and informed
representation of
the client’s interests
and provide a totalmarket overview
to facilitate the
client’s decisionmaking process.
“
Bradley Company is an Accredited Management
Organization (AMO®). As such, we have satisfied
the accreditation requirements and maintain the high
standards of the AMO® program as established by the
Institute of Real Estate Management (IREM), a member
institute of the National Association of Realtors®,
regarding staffing of employees, ongoing financial
stability, adherence to strict organizational policies and
procedures and a very
strict Code of Ethics.
OUR GOAL IS
TRULY CLIENT
SERVICE.
Our management
services are organized
and supervised by
individual Certified
Property Managers®.
Individuals with CPM®
designations are part
of the Institute of Real
Estate Management,
a member institute of
the National Association of Realtors®. As such, these
members have satisfied the certification requirements
and maintain the high standards of the CPM® program.
Our team also includes members from the CCIM
Institute (Certified Commercial Investment Member),
Society of Industrial and Office Realtors® (SIOR) and the
Building Owners and Managers Association (BOMA).
”
A tradition of innovation that enables us to meet
the changing needs and demands of our clients by
delivering solutions through local knowledge.
An uncompromising commitment to professional
education.
A reputation for excellence and ethical practice
that assures clients of our commitment to
service and dedication to client satisfaction.
Our clients benefit from the security of knowing
that their property investments are run by a
skilled and experienced real estate team.
75
76
THANK YOU
2012-2013
MARKET STUDY
UNDERWRITERS
77
TCU Offers Business
Real Estate Loans for:
•CommercialRealEstateAcquisition
•ConstructionLending
•RefinanceofexistingRealEstateLoans
We also offer other business services such as:
•BusinessChecking
•CommercialPlusChecking
•HealthSavingsAccounts
ContactTCUformoreinformation
at(574)284-6226.
Your savings federally insured to at least $250,000
and backed by the full faith and credit of the United States Government
©2011TeachersCreditUnion
Indiana’s largest
privately-owned
bank.
Steve Watts
Community Bank
President
574-243-2822 ext. 4701
CentIer.Com
Member FDIC
Sheila Sieradzki
Vice President
Business Banking
574-243-2822 ext. 4702
NCUA
Running,
Running,
Running a business?
National Credit Union Administration, a U.S. Government Agency
Running,
Running,
Running,
Running,
Run less, lead more with
Key
Running
Running a
a business?
business?
Run
Runless,
less, lead
lead more
more with Key
Find out which Key business services are best for you. Visit your local Key branch,
call 1-888-KEY4BIZ or go to key.com/smallbiz.
Findtoout
outwhich
which
business
services
areservice
best
for you.
you. Visit
Find
business
services
are
best
for
Key Payroll Online is
subject
credit
approval
andKey
toKey
the terms
and conditions of
the Key Payroll Online
agreement.
call
1-888-KEY4BIZor
orgo
goto
tokey.com/smallbiz.
key.com/smallbiz.
KeyTax is subject tocall
credit
approval.
1-888-KEY4BIZ
Key Payroll Online is subject to credit approval and to the terms and conditions of the Key Payroll Online service agreement.
Key Payroll Online is subject to credit approval and to the terms and conditions of the Key Payroll Online service agreement.
KeyTax is subject to credit approval.
KeyTax is subject to credit approval.
78
your local Key
Key branch,
branch,
Supporting development and growth
of Indiana businesses—
—It’s what we’ve been about for over
140 years.
Contact Lake City Bank to gain a competitive advantage for your business
888.522.2265 | www.lakecitybank.com | Member FDIC
Extra mile.
Law firms talk about “going the extra mile” all the
time. At Barnes & Thornburg, we’d rather walk it
than talk it. we staff your matters with less leverage
and more partner involvement. we approach your
business in an efficient, uncommonly predictable
way. And we put in the effort to find the practical,
workable solutions to your most complex business
challenges. To us, going the extra mile isn’t about
distance—it’s about results.
btlaw.com
ATLANTA CHICAGO DeLAwAre INDIANA LOs ANGeLes mICHIGAN mINNeApOLIs OHIO wAsHINGTON, D.C.
79
Value. Expertise. Experience.
Everytime.
Great Lakes Capital is a real estate private equity and development ﬁrm
active regionally across all commercial real estate asset segments.
greatlakescapital.com || (574) 251-4400
80
(
REAL
ESTATE
LEGAL
SOLUTIONS
We have
Attorneys
for that
)
Stephen A. Studer
PARTNER
[email protected]
2013 INDIANA SUPER LAWYER
2013 INDIANA BEST LAWYER
John Lloyd
PARTNER
[email protected]
2013 INDIANA SUPER LAWYER
2013 INDIANA BEST LAWYER
Krieg DeVault LLP is a
160-professional, diversified
law firm representing a
wide variety of local,
regional, national and
international clients.
Headquartered in
Indianapolis, Indiana, we
are a business-focused law
firm with additional offices
located in Central Indiana,
Northwest Indiana,
Chicago, Illinois, Atlanta,
Georgia, Boca Grande,
Florida, and Minneapolis,
Minnesota.
INDIANA’S
BEST
LAWYERS
Krieg DeVault LLP
4101 Edison Lakes Parkway, Suite 100
Mishawaka, Indiana 46545
P: 574.277.1200
www.kriegdevault.com
Scott J. Fandre
OF COUNSEL
[email protected]
Shawn E. Peterson
OF COUNSEL
[email protected]
CCIM
INSTITUTE
INDIANA
SUPER
LAWYERS
INDIANA ILLINOIS GEORGIA FLORIDA MINNESOTA
81
BROKERAGE SERVICES PROPERTY MANAGEMENT MAINTENANCE SERVICES RESEARCH & CONSULTING
© 2013 Bradley Company, LLC. Information contained herein has been obtained from sources believed to be reliable, but such information has not been
independently verified, and no guarantee, warranty, or representation is made regarding its reliability, accuracy, or completeness. Any projections, opinions,
assumptions, or estimates are provided for example purposes only, and they do not necessarily represent current or future performance of a property. Clients should
consult their tax and legal advisors and conduct their own investigation before proceeding with any transaction. All rights to the material are reserved, and it should
not be reproduced or distributed to a third party without prior written permission from Bradley Company, LLC. *The information included in the Multi-Housing
market snapshot is reflective only of the data compiled by Bradley Company and may not be representative and/or inclusive of the market(s) in their entirety.
82

St. Joseph County

Transcription

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