United States Warehouse Demand Study - Summer 2012

Big Box Outlook
United States . Fall 2013
JLL introduces its
Big Box Velocity Index
TM
Choice, cost and competition influence real estate decisions for
both landlords and tenants. JLL‘s new Big Box Velocity Index
(‘BBVI’) attempts to plot that on the supply-demand-curve. Find out
how U.S. markets stack-up to one another and where tenants have
options.
Demand for warehouses is relatively strong – especially for
buildings larger than 500,000 square feet – and continues to spread
across all size thresholds. Will this momentum persist?
Jones Lang LaSalle • U.S. Big Box Outlook • Fall 2013 3
Table of contents
Key takeaways
4
Two views on the U.S. landscape
5
Big Box Velocity Index TM methodology
6
Dispersion by geography
7
Demand dispersion by industry
8
Demand dispersion by size
8
Supply dispersion by size
9
United States: large block accommodation, by region
10
Construction by region
11
Speculative construction by region
11
Big box leases, YTD 2013
12
E-commerce
21
Contact information
22
Jones Lang LaSalle • U.S. Big Box Outlook • Fall 2013 4
•
As a way for us to easily compare industrial markets, JLL
introduces its new Big Box Velocity Index. We compare available
inventory and requirements across size segments to rate supply
and demand in major logistics corridors.
•
Big box space requirements (on a square footage basis) and
counts are up from Spring 2013.
•
While overall demand is up, demand in the nation’s most active
market, the Inland Empire, is flat. With the IE accounting for 18
percent of the nation’s speculative construction, we are watching
this market closely.
•
In the Northeast, demand is concentrated in the larger, mid-size
warehouse segment – anecdotal evidence that small- to mid-market
firms are getting back into the leasing market. Demand is also very
active in larger segments – space needs in excess of one million
square feet are heavily concentrated in the region.
•
The big box segment also remains strong.
•
Speculative construction is occurring in nearly all markets. In most
markets, tenants with requirements in excess of 750,000 square
feet will not find much choice with existing inventory and will need
to pursue either pre-build or build-to-suit opportunities.
•
Will speculative building cool in certain markets?
•
E-commerce is growing as a demand driver: more than 10 percent
of total U.S. construction is for e-commerce users.
Jones Lang LaSalle • U.S. Big Box Outlook • Fall 2013 5
Two views on the U.S. landscape
“We’ve had 14 consecutive quarters of
positive net absorption and it looks like
rents will further increase in 2014.”
“Because real estate demand is such a
‘long lead’, much of 2012 and 2013-yearto-date’s activity has stemmed from
2011’s more robust economy. Absorption
is a lagging indicator.”
“Even though speculative construction is
increasing, tenants with larger
requirements are committing to more
build-to-suits because demand exceeds
supply.”
“Underwriting criteria for big box space is
making true spec construction difficult.
Many developers need pre-commitments
prior to groundbreaking of ‘inventory’
buildings. This means today’s BTS are
less about special purpose buildings, or
design-build-projects, and are really about
kicking off semi-spec buildings.”
“Supply and demand are balanced in most
markets as it relates to new construction
deliveries.”
“Today, this is generally true. However a
few markets may be getting ahead of
themselves. This can be said for the
Inland Empire, where requirements are flat
in the 500-749 ksf segment.”
Jones Lang LaSalle • U.S. Big Box Outlook • Fall 2013 6
Big Box Velocity Index
TM
Jones Lang LaSalle‘s BBVI compares tenant
requirements against existing and under construction
supply (Class A + B). We segment into five different
size categories and then determined where each
market is along the supply and demand curve.
More requirements equate to the likelihood of more robust future leasing velocity, and this,
subsequently hints at price appreciation to come.
As for the results:
Tier I
• New Jersey led all markets since tenant requirements for space in excess of 500,000
square feet outweigh supply. Speculative construction is increasing.
• Chicago, the nation‘s abosrption-leader in the second quarter, surprisingly lagged. Its
available supply-on-hand counts, particularly in larger size segments outweighed active
requirements, and this tugged down on scoring gains.
Tier II
• Phoenix helmed the top-spot based on a handful of active requirements for spaces in
excess of 750,000 square feet.
There were two geographical groupings. Tier I markets are the large-scale
logistics corridors near major population centers such as the Inland Empire,
New Jersey, etc.. Second tier markets are those highly influenced by major
markets, such as Phoenix (shaped by the Inland Empire), Indianapolis
(influenced by Chicago), Boston (affected by New Jersey) and so forth.
We compared the number of requirements against the number of available
buildings per our five size categories, and we created a weighted average
around this for each tier segment.
“Choice, Cost and Competition” is the central theme of our study. In the case of Tier I
markets, as it relates to larger blocks of space, tenants have more choices in Chicago, will
face more competition in New Jersey and costs are contingent on these dynamics.
The higher the score suggests the more landlord-favorable a market is (or has
the leverage to eventually be); requirements exceed quality supply-on-hand
across several size segments.
Tier I markets
250
200
150
100
50
0
206
184
175
174
black = competition
grey = choice
Tier II
173
150
116
97
53
115
114
97
93
91
87
82
79
78
74
72
70
68
65
64
59
58
50
46
Jones Lang LaSalle • U.S. Big Box Outlook • Fall 2013 7
Where is demand?
Activity continues to shift to the east because deals in the Mid-West have taken place
• The Northeast is leading the country in terms of active tenant requirements, outpacing
the Mid-West (which now ranks second, by square footage). The top three industries
shopping the market include: e-commerce retailers, traditional retailers and consumer
non-durables. On a square footage basis, the volume of requirements increased 43
percent from our last report to serve the region’s 55-million-strong population. In New
Jersey, Amazon, Williams-Sonoma and Tory Birch already signed notable deals in excess
of 500,000 square feet this year.
• Requirements in the Mid-West are down by 26 percent; a function of robust leasing
activity in quarters past. E-commerce retailers presently lead all other industries. In
Chicago, three size segments are especially active: 50,000 to 150,000 square feet,
250,000 to 399,999 square feet and 800,000 square feet; e-tailers are especially active in
the latter segment.
• Demand in the Southeast is relatively unchanged. Consumer non-durables and food &
beverage tenants presently lead all requirements. Logistics & distribution companies have
been active in recent quarters.
• Southern California is also generally flat with regards to tenant requirements. Notable
big-box leases were signed in recent quarters and there has been a progressive tapering
off of needs in the 500,000 to 749,000-square-foot segment. Year-to-date, 13 leases for
space in excess of 500,000 square feet were inked.
30,000,000+ s.f.
10,000,000 s.f. to 29,999,999 s.f.
500,000 s.f. to 9,999,999 s.f.
‘Mega-box’ still reigns, but….
Substantial leasing volume of larger facilities across the U.S. has pushed demand to smaller
size segments as the supply of quality spaces has dwindled, user competition has escalated
and rents have increased. It has also encouraged small and mid-cap distributors to re-enter
the market and take space before values appreciate.
All of this speaks to why construction is on the rise.
Jones Lang LaSalle • U.S. Big Box Outlook • Fall 2013 8
Who will lease space?
Demand is spreading into smaller
buildings
Demand dispersion by industry
Demand dispersion by size
Five of the top 6 industries prefer the Northeast
•
Food & beverage is active.
•
Retailer (e-commerce) users are congregating to the Northeast and Mid-West.
•
Logistics & distribution requirements are generally spread across regions, with a
West Coast emphasis. This is not surprising given the number of cargo seaports
from Southern California to Seattle.
•
Consumer non-durables retain a pronounced presence.
•
Manufacturing has enjoyed gains in recent months, and on-shoring moves will help
future momentum.
Retail is the true king
•
Total retail requirements account for a third of total demand—most of which is
concentrated in the Northeast. Vacancies are expected to decline in markets such
as New Jersey as absorption gains occur.
Widespread, except…(by square footage)
•
Demand for 250,000 to 499,999 square feet is nearly on par with requirements for
spaces in excess of 1.0 million square feet. This speaks to a resurgence in activity
from mid to larger distributors, and they want modern space: 31 percent of the
nation’s speculative development is in this size segment.
•
Generally, tenant requirements are spread out across size segments, with the
exception of the 750,000 to 999,000-square-foot grouping. Corporate occupiers
seem to prefer this segment for consolidation moves, but the economy is on the
mend and the majority of such moves have already occurred. The handful of
tenants with requirements in this segment are likely to pursue build-to-suit options;
the same can be said for those with needs in excess of one million square feet.
Counts favor smaller size segments
•
Food & beverage, logistics & distribution, consumer non-durables, 3PLs and
manufacturing companies favor space under 500,000 square feet; more than 70
percent of their respective requirements fit into this size segment.
•
Retailer (e-commerce) users are the most diverse as it relates to space needs.
Smaller private companies are shopping product under 250,000 square feet, while
major retailers are opening mega fulfillment centers larger than one million square
feet near key population centers, with mid-size locations in secondary markets.
Jones Lang LaSalle • U.S. Big Box Outlook • Fall 2013 9
Mid-West and Northeast to feel the appreciation
Supply dispersion by size
500-749 ksf
124
Putting two and two together*
750-999 ksf
28
1 msf+
9
•
250-499 ksf
414
100-249 ksf
1,261
The 100,000 to 249,999-square-foot segment clearly has the most availabilities and is chiefly
based in the Mid-West and Northeast.
•
Based on demand needs, manufacturing, 3PLs, logistics & distribution and
consumer non-durables are actively shopping spaces in this segment.
•
Consumer non-durables, 3PLs and manufacturing companies have the most
requirements in the Northeast, meaning this size segment is set to appreciate in
the region.
•
The same will occur, likely at a slower pace, for 500,000 to 749,999-square-foot product in
the Mid-West where e-commerce retailers are pursuing space.
•
Available supply counts in the 750,000 to 999,999-square-foot range are high in the MidWest and Southeast and user demand has slowed after notables leases from WilliamsSonoma, Pactiv and Navarre Corporation. Rental rates will likely remain flat, given the
diminutive pool of existing requirements.
•
E-commerce users also want spaces in excess of one million square feet in the Northeast
and Mid-West; available blocks (particularly cold shell, A-space) should fare well.
By counts (includes existing and under construction Class A and B space)
* see the next page for all data tables
Percent of supply on hand, by region
Size
Northwest
By count
Southern California Southwest
Mountain
Mid-West
Northeast
Southeast
Total Count
100-249 ksf
7%
12%
13%
4%
25%
20%
19%
1,261
250-499 ksf
7%
13%
16%
3%
23%
19%
21%
414
500-749 ksf
4%
11%
19%
3%
29%
15%
19%
124
750-999 ksf
0%
11%
14%
0%
36%
14%
25%
28
22%
0%
11%
0%
33%
22%
11%
9
1 msf+
Jones Lang LaSalle • U.S. Big Box Outlook • Fall 2013 10
Focus on… United States: large block accommodation, by region
All markets have space to burn as it relates to the 100,000 to 249,999-square-foot segment. In larger size segments, active requirements will help lower vacancies in the Mid-West,
Northeast and Southeast – regions whose vacancies presently exceed West Coast markets.
350
350
Available blocks of Class A and B space (existing and under construction)
Active requirements
Northwest
Southern California
Mountain
Southwest
Mid-West
Northeast
Southeast
>1msf
750-999ksf
500-749ksf
250-499ksf
100-249ksf
>1msf
750-999ksf
500-749ksf
250-499ksf
100-249ksf
>1msf
750-999ksf
500-749ksf
250-499ksf
100-249ksf
>1msf
750-999ksf
500-749ksf
250-499ksf
100-249ksf
>1msf
750-999ksf
0
500-749ksf
0
250-499ksf
50
100-249ksf
50
>1msf
100
750-999ksf
100
500-749ksf
150
250-499ksf
150
100-249ksf
200
>1msf
200
750-999ksf
250
500-749ksf
250
250-499ksf
300
100-249ksf
300
Jones Lang LaSalle • U.S. Big Box Outlook • Fall 2013 11
Construction by region, by square feet
12,000,000
Owner-built and BTS
Speculative construction by region, by square feet
Speculative
Northeast
8%
10,000,000
Northwest
10%
8,000,000
6,000,000
Mid-West
17%
2,000,000
0
So. Cal
24%
Southeast
15%
4,000,000
Mountain
3%
Southwest
22%
Mountain Northeast Northwest Southeast Mid-West Southwest So. Cal
•
Preliminary numbers for the third quarter of 2013 have under construction activity
at 96.7 million square feet; nearly half of this is speculative product with an average
building size of 360,000 square feet.
•
Southern California, home to the nation’s busiest seaport complex, had its first
speculative groundbreaking in early 2011. Regional groundbreakings increased at
a modest clip and were well-received. “Too much, too soon” is today’s concern.
•
Consistent net absorption gains in the West, the spillover effect to secondary
markets and a dwindling supply of larger blocks of Class A space have led tenants
to explore Class B options, sign renewals, consider smaller spaces or opt for buildto-suits.
•
Build-to-suit activity, over time, garners the interest of speculative developers,
and more spec construction will break ground in regions such as the Northeast
and Southeast.
•
Speculative development began in Southern California, made its way east, and is
becoming more widespread.
•
Drilling into the regions, Southern California’s Inland Empire has 18 percent of the
nation’s speculative buildings (on a square footage basis). This one market exceeds
the entire Mid-West! The Southwest’s Dallas / Fort Worth has 12 percent of total
development, outpacing the Northwest and Northeast.
•
The lessons developers learned from over-building during the last cycle’s peak
linger, meaning that although U.S. speculative development is increasing it will
generally be at a measured pace. Major logistics corridors such as the Inland
Empire and Dallas will endure market corrections, if new supply gets ahead of
demand requirements.
Jones Lang LaSalle • U.S. Big Box Outlook • Fall 2013 12
Big box leases, YTD 2013
Jones Lang LaSalle • U.S. Big Box Outlook • Fall 2013 13
Big box leases, YTD 2013
Atlanta
2500 South Highway 155
Build-to-suit: 1,287,000 s.f.
Tenant: Home Depot
Industry: Retailer (traditional)
7060 Battle Drive
Renewal: 404,513 s.f.
Tenant: Atlanta Bonded Warehouse
Industry: Logistics & Distribution
4950 Mason Road
Renewal: 547,536 s.f.
Tenant: Kellogg
Industry: Food & Beverage
2124 Skyview Drive
Direct: 395,750 s.f.
Tenant: Menlo Logistics
Industry: 3PL
4475 Fulton Parkway
Renewal: 430,000 s.f.
Tenant: American Building Supply
Industry: Construction Materials &
Building Fixtures
5345 Old Dixie Highway
Renewal: 420,000 s.f.
Tenant: Hartsfield Warehouse Co.
Industry: Logistics & Distribution
205 Satellite Boulevard
Expansion: 416,541 s.f.
Tenant: Echosphere
Industry: Communications/Tech/Media
2200 Thornton Road
Renewal: 302,620 s.f.
Tenant: Lagasse
Industry: Consumer Non-Durables
5395 Oakley Industrial Boulevard
Renewal: 277,500 s.f.
Tenant: Peachtree Logistics
Industry: Logistics & Distribution
2500 West Park Drive
Direct: 258,056 s,f,
Tenant: Continental Tire
Industry: Auto, Auto Parts & Tires
1215 Palmour Drive
Renewal: 250,000 s.f.
Tenant: Kubota Manufacturing
Industry: Manufacturing
101 Middlesex Center Boulevard –
Building 2
Pre-lease: 751,450 s.f.
Tenant: Williams-Sonoma
Industry: Retailer (traditional)
301 Blair Road
New lease: 565,452 s.f.
Tenant: Amazon.com
Industry : Retailer (e-commerce)
Central New Jersey
Baltimore
400 Old Post Road
New lease: 350,000 s.f.
Tenant: Pier One
Industry: Retailer (traditional)
2016 Gees Mill Road
Build-to-suit: 496,730 s.f.
Tenant: Hill Phoenix
Industry: Manufacturing
8411 Kelso Drive
New lease: 274,841 s.f.
Tenant: RPM Warehousing &
Transportation
Industry: Logistics & Distribution
Matrix Business Park @ 7A
Build-to-suit: 1,000,000 s.f.
Tenant: Amazon.com
Industry: Retailer (e-commerce)
Charlotte
130 Interstate Boulevard
Renewal: 413,092 s.f.
Tenant: Home Depot
Industry : Retailer (traditional)
1900 Continental Boulevard
Renewal: 274,000 s.f.
Tenant: Snyder’s Lance
10000 Twin Lakes Parkway
Renewal: 263,000 s.f.
Tenant: Ingersoll Rand
115 Interstate Boulevard
Sublease: 526,459 s.f.
Subtenant: Tory Burch
Industry : Consumer Non-Durables
Jones Lang LaSalle • U.S. Big Box Outlook • Fall 2013 14
Big box leases, YTD 2013
Chicago
870 West Taylor Road
Build-to-suit: 898,560 s.f.
Tenant: Pactiv
Industry: Paper & Packaging
1000 Bilter Road
Renewal: 694,367 s.f.
Tenant: LTD Commodities
Industry: Consumer Non-Durables
800 Bilter Road
Renewal: 592,539 s.f.
Tenant: UTI (Panasonic)
Industry: 3PL
343 East Lies Road
Renewal: 540,000 s.f.
Tenant: Ingram Micro
Industry: 3PL
1001 West Crossroads Parkway
New Lease: 532,560 s.f.
Tenant: Peacock Engineering
Industry: Paper & Packaging
437-515 Tower Boulevard
New Lease: 515,497 s.f.
Tenant: Owens & Minor
Industry: Biomed / Biotech / Pharma /
Healthcare
109 88th Street
Built-to-suit: 471,034 s.f.
Tenant: Ta Chen
Industry: Manufacturing
5555 West 73rd Street
New lease: 470,200 s.f.
Tenant: PCA
Industry: Paper & Packaging
10601 Seymour Avenue
Renewal: 458,884 s.f.
Tenant: DHL
Industry: Logistics & Distribution
24616 CenterPoint Drive
Renewal: 440,000 s.f.
Tenant: Partners Warehouse
Industry: Logistics & Distribution
1160 West Crossroads Parkway
New lease: 400,856 s.f.
Tenant: Valspar Corporation
Industry: Construction Materials & Building
Fixtures
3800 Corporate Drive
Renewal: 378,350 s.f.
Tenant: Brake Parts, Inc.
Industry: Auto, Auto Parts & Tires
10220 Werch Drive
New lease: 368,000 s.f.
Tenant: Absopure
Industry: Food & Beverage
8201 West 47th Street
Build-to-suit : 365,359 s.f.
Tenant: Freeman Decorating
Industry: Consumer Non-Durables
801 Midpoint Road
Expansion: 363,303 s.f.
Tenant: Electrolux
Industry: Consumer Durables
850 Veterans Parkway
Renewal: 361,176 s.f.
Tenant: New Breed Logistics Inc.
Industry: 3PL
1600 Central Avenue
Renewal: 360,709 s.f.
Tenant: Expeditors
Industry: 3PL
14110 South Route 59
Renewal: 347,900 s.f.
Tenant: Midwest Warehouse
Industry: Logistics & Distribution
875 West Crossroads Parkway
Renewal/expansion: 330,269 s.f.
Tenant: Exel Logistics
Industry: 3PL
10100 58th Place
Expansion: 314,249 s.f.
Tenant: IMS
Industry: Consumer Durables
501 South Steward Road
Expansion: 312,750 s.f.
Tenant: Del Monte
Industry: Food & Beverage
Woodward Avenue Union Pointe
Build-to-suit : 347,400 s.f.
Tenant: Orbus Exhibit and Display
Industry: Other
230-260 Lies Road
New lease: 347,000 s.f.
Tenant: Lagasse Inc.
Industry: Consumer Non-Durables
2401-2501 Lunt Avenue
Expansion: 309,284 s.f.
Tenant: Hearthside Foods
Industry: Food & Beverage
Jones Lang LaSalle • U.S. Big Box Outlook • Fall 2013 15
Big box leases, YTD 2013
Chicago (continued)
Columbus
901 West Crossroads Parkway
New lease: 301,474 s.f.
Tenant: Bunzl
Industry: Paper & Packaging
99 North Pinnacle Drive
New lease: 281,963 s.f.
Tenant: Sleepy’s
Industry: Consumer Durables
430 Gibraltar Drive
New lease: 281,464 s.f.
Tenant: Sony
Industry: Consumer Durables
7701-7711 95th Street
Renewal: 252,825 s.f.
Tenant: Honeywell
Industry: Consumer Durables
175 Heritage Drive
Build-to-suit: 766,633 s.f.
Tenant: Navarre Corporation
Industry: Logistics & Distribution
10 Enterprise Parkway
Build-to-suit: 530,000 s.f.
Tenant: Ace Hardware
Industry: Retailer (traditional)
6200 Commerce Center
Direct: 437,000 s.f.
Tenant: HD Supply
Industry: Construction Materials &
Building Fixtures
5765 Green Pointe Drive North
Renewal: 358,760 s.f.
Tenant: Sears
Industry: Retailer (traditional)
4900 Creekside Parkway
Direct: 337,859 s.f.
Tenant: Exel, Inc.
Industry: 3PL
4900 Creekside Parkway
Direct: 337,859 s.f.
Tenant: Exel, Inc.
Industry: 3PL
Dallas / Fort Worth
Centerpoint Business Park
Direct: 580,000 s.f.
Tenant: Avnet, Inc.
Industry: Consumer Durables
2859 Rohr Road
New Lease: 314,000 s.f.
Tenant: Excel Global Logistics
Industry: 3PL
5300 Westport Parkway
New leases: 788,142 s.f.
Tenant: Walmart.com
Industry: Retailer (e-commerce)
5101 Frye Road
New lease: 728,520 s.f.
Tenant: Trader Joe’s
Industry: Food & Beverage
5500 South Freeway
New lease : 552,600 s.f.
Tenant: Sygma Network
Industry: Food & Beverage
3737 Duncanville Road
New lease: 510,400 s.f.
Tenant: Owens Corning Insulating
Industry: Construction Materials &
Building Fixtures
4798 Henrietta Creek Road
New lease: 472,542 s.f.
Tenant: National Distribution Centers
Industry: Logistics & Distribution
1011 Isuzu Parkway
Direct: 470,000 s.f.
Tenant: General Electric Company
Industry: Consumer Durables
3700 Pinnacle Point Drive
Direct: 419,438 s.f.
Tenant: Ozburn-Hessey Logistics
Industry: 3PL
13300 Park Vista Boulevard
New Lease : 399,000 s.f.
Tenant: Carolina Beverage
Industry: Food & Beverage
4700 Arnon Carter Boulevard
Renewal: 352,054 s.f.
Tenant: United America Corp.
Industry: Communications / Tech / Media
4800 Langdon Road
New lease: 321,123 s.f.
Tenant: Conn Appliances
Industry: Retailer (traditional)
1800 Columbia Club Drive
TBD: 288,041 s.f.
Tenant: Iron Mountain
Industry: Other
2425 Esters Boulevard
New Lease: 297,500 s.f.
Tenant: Jacobson Companies
Industry: 3PL
Jones Lang LaSalle • U.S. Big Box Outlook • Fall 2013 16
Big box leases, YTD 2013
Denver
Houston
17901 East 40th Avenue
BTS: 541,662 s.f.
Tenant: United Natural Foods
Industry: Food & Beverage
10650 Okanella Ln.
Direct: 267,273 s.f.
Tenant: DB Schenker Logistics
Industry: Logistics & Distribution
359 Pike Court
Renewal: 341,190 s.f.
Tenant: Katoen Natie
Industry: Logistics & Distribution
Citypark East Industrial Park
Renewal: 767,362 s.f.
Tenant: Exel; 3 separate renewals
Industry: Logistics & Distribution
Eastport Industrial Park
Renewal: 370,000 s.f.
Tenant: United DC
Industry: Logistics & Distribution
Rampart Corporate Center
Direct: 299,840 s.f.
Tenant: Goodman Manufacturing
Industry: Manufacturing
Indianapolis
945 Monument Drive
Build-to-suit: 715,000 s.f.
Tenant: Subaru of America, Inc.
Industry: Auto, Auto Parts & Tires
2209-2233 Stafford Road
Renewal: 600,576 s.f.
Tenant: Cross Road Centers
Industry: 3PL
2525 N Shadeland Avenue
New lease: 545,000 s.f.
Tenant: Kid Glove
Industry: 3PL
1101 Whitaker Road
Renewal: 379,322 s.f.
Tenant: Ozburn-Hessey Logistics
Industry: 3PL
300 Purity Drive
Expansion: 355,000 s.f.
Tenant: Gander Mountain
Industry: Retailer (traditional)
4925-4945 West 86th Street
New lease: 309,600 s.f.
Tenant: Heartland Sweetener
Industry: Food & Beverage
1801 Innovation Boulevard
Build-to-suit: 545,000 s.f.
Tenant: Gordman’s
Industry: Retailer (traditional)
7520 Georgetown Road
Renewal 528,000 s.f.
Tenant: Hewlett Packard
Industry: Consumer Durables
281 Airtech Parkway
Expansion: 405,942 s.f.
Tenant: Ozburn-Hessey Logistics
Industry: 3PL
8175 North Allison Avenue
New lease: 300,000 s.f.
Tenant: Pinnacle Oil
Industry: Auto, Auto Parts & Tires
861-881 Perry Road
Expanded lease: 296,000 s.f.
Tenant: Eby-Brown Company
Industry: Food & Beverage
3052 North Distribution Way
New lease: 250,058 s.f.
Tenant: Spectra Premium
Industry: Auto, Auto Parts & Tires
3000 E Philadelphia Street
Renewal: 750,000 s.f.
Tenant: Pier 1 Imports
Industry: Retailer (traditional)
22775 Oleander Avenue
New lease: 677,909 s.f.
Tenant: DSC Logistics
Industry : 3PL
5400 Shea Center Drive
Renewal: 623,630 s.f.
Tenant: Dorel
Industry: Manufacturing
Inland Empire
City of Perris, California
Build-to-suit: 1,100,000 s.f.
Tenant: Home Depot
Industry: Retailer (e-commerce)
13052 Jurupa Avenue
Renewal: 827,560 s.f.
Tenant: Jarden Consumer Solutions
Industry: Consumer Durables
4100 Mission Boulevard
Renewal: 763,228 s.f.
Tenant: Georgia Pacific
Industry: Paper & Packaging
Jones Lang LaSalle • U.S. Big Box Outlook • Fall 2013 17
Big box leases, YTD 2013
Inland Empire (continued)
2825 Jurupa Avenue
New lease: 612,104 s.f.
Tenant: Samsung
Industry: Consumer Durables
18012 Slover Avenue
Build-to-suit: 610,120 s.f.
Tenant: Distribution Alternatives
Industry: 3PL
9333 Hermosa Avenue
New lease: 573,000 s.f.
Tenant: Campbell’s
Industry: Food & Beverage
1900 South Rochester Avenue
New lease: 506,436 s.f.
Tenant: Mobis Parts America
(Hyundai)
Industry: Auto, Auto Parts & Tires
4041 East Francis Street
New lease: 500,000 s.f.
Tenant: Cal Cartage
Industry: Logistics & Distribution
12249 Holly Street
Renewal: 457,120 s.f.
Tenant: Exel Logistics
Industry: 3PL
6725 Kimball Avenue
Renewal: 423,080 s.f.
Tenant: NFI Industries
Industry: Logistics & Distribution
1801 South Carlos Avenue
New lease: 414,453 s.f.
Tenant: Imax Worldwide
Industry: Consumer Non-Durables
3950 East Airport Drive
Renewal: 414,435 s.f.
Tenant: Timberland
Industry: Retailer (traditional)
11001 Etiwanda Avenue
New lease: 404,730 s.f.
Tenant: ACT Fulfillment
Industry: 3PL
9425 Nevada Street
New lease: 390,780 s.f.
Tenant: Kuehne & Nagel
Industry: Logistics & Distribution
12471 Riverside Drive
New lease: 376,007 s.f.
Tenant: Genco
Industry : 3PL
2111 Eastridge Avenue
Renewal: 360,000 s.f.
Tenant: ModusLink
Industry: 3PL
Moreno Valley Commerce Park
Build-to-suit: 354,810 s.f.
Tenant: Minka Lighting, Inc.
Industry: Construction Materials &
Building Fixtures
11296 Harrell Street
New lease: 353,361 s.f.
Tenant: Oakley, Inc.
Industry: Consumer Non-Durables
13083 Slover Avenue
New lease: 323,660 s.f.
Tenant: Subaru
Industry: Auto, Auto Parts & Tires
1000 Etiwanda Avenue
New lease: 302,080 s.f.
Tenant: ODW Logistics
Industry: 3PL
24950 Grove View Road
Renewal: 301,100 s.f.
Tenant: Harman Consumer Group
Industry: Consumer Non-Durables
13725 – 13835 Pipeline Avenue
Renewal: 300,000 s.f.
Tenant: ODW Logistics
Industry: 3PL
13366 Philadelphia Street
New lease: 266,950 s.f.
Tenant: Harman International
Industries
Industry: Consumer Non-Durables
1670 Champagne Avenue
New lease: 263,500 s.f.
Tenant: Genco
Industry: 3PL
5700 East Airport Drive
New lease: 250,248 s.f.
Tenant: DCG
Industry: 3PL
Jones Lang LaSalle • U.S. Big Box Outlook • Fall 2013 18
Big box leases, YTD 2013
Kansas City
Las Vegas
Los Angeles
1400 Warren Street
New lease: 289,000 s.f.
Tenant: Piston Automotive Group
2280 North Lamb Boulevard
New lease: 303,000 s.f.
Tenant: Hand Air Express
Industry : 3PL
4501 East Conant Street
New lease: 1,091,754 s.f.
Tenant: Mercedes Benz
Industry: Auto, Auto Parts & Tires
108-288 Mayo Avenue
Expansion: 775,000 s.f.
Tenant: Port Logistics Group
Industry: 3PL
2849 Ficus Street
Renewal: 322,817 s.f.
Tenant: G.P.R. Logistics, LLC
Industry: 3PL
9306 Sorensen Avenue
Direct lease: 305,422 s.f.
Tenant: Phoenix
Industry: 3PL
Memphis
2501 West Rosecrans Avenue
New lease: 298,474 s.f.
Tenant: American Logistics Intl.
Industry: Retailer (e-commerce)
6281-6285 East Slauson Avenue
Renewal: 268,391 s.f.
Tenant: Performance Paper Industry:
Paper & Packaging
771 East Watson Center Road
Direct lease: 258,678 s.f.
Tenant: Damco Distribution
Industry: Logistics & Distribution
1560 East Stateline Road
Renewal: 374,000 s.f.
Tenant: Trane
Industry: Construction Materials &
Building Fixtures
699 Research Drive
New Lease: 514,980s.f.
Tenant: Home Décor Cos.
Industry: Consumer Durables
Northern California
Minneapolis
8734 South Crossroads Drive
New Lease: 533,226 s.f.
Tenant: Genco
Industry: 3PL
Sperry Avenue & Baldwin Road
Build-to-suit: 1,030,000 s.f.
Tenant: Amazon.com
Industry: Retailer (e-commerce)
3399 East Raines Road
Renewal: 600,000 s.f.
Tenant: Philips Electronics
Industry: Consumer Durables
North Chrisman Road @ Grant Line
Road
Build-to-suit: 1,017,353 s.f.
Tenant: Amazon.com
Industry: Retailer (e-commerce)
6100 Holmes Road
New Lease: 414,076 s.f.
Tenant: Market TJ Maxx
Industry: Retailer (traditional)
1550 North Chrisman Road
Renewal: 749,840 s.f.
Tenant: Kellogg’s
Industry : Food & Beverage
1301 Industrial Boulevard NE
Renewal: 350,347 s.f.
Tenant: Superior Third Party
Logistics
Industry: 3PL
4400 Florin Perkins Road
Renewal: 412,808 s.f.
Tenant: Grocery Outlet
Industry: Food & Beverage
5461 Davidson Road
New Lease: 500,000 s.f.
Tenant: Technicolor
Industry: Consumer Durables
1187 Park Place
Sale-leaseback: 370,000 s.f.
(9-month term)
Tenant: TE Connectivity
Industry: Communications / Tech / Media
1909 Zephyr Street
Direct: 394,000 s.f.
Tenant: Menlo Logistics
Industry: 3PL
6700 Automall Parkway
Renewal: 476,177 s.f.
Tenant: Office Depot
Industry: Retailer (traditional)
7331-7337 Las Positas Road
Direct: 286,100 s.f.
Tenant: International Paper Co.
Industry: Paper & Packaging
Jones Lang LaSalle • U.S. Big Box Outlook • Fall 2013 19
Big box leases, YTD 2013
Northern California (continued)
Philadelphia / Harrisburg
5800 Coliseum Way
Renewal: 336,600 s.f.
Tenant: Kaiser Permanente
Industry : Biomed / Biotech / Pharma /
Healthcare
600 Oak Ridge Road
Pre-Lease: 1,054,011s.f.
Tenant: American Eagle Outfitters
Industry: Retailer (e-commerce)
9300 Old Scotland Road
Pre-Lease: 1,700,000 s.f.
Tenant: Proctor & Gamble
Industry: Consumer Non Durables
2785 Commerce Center Boulevard
Direct: 1,200,000 s.f.
Tenant: Wal-Mart
Industry: Retailer (e-commerce)
5 True Temper Drive
Renewal: 511,000 s.f.
Tenant: SC Johnson
Industry: Consumer Non Durables
Address is TBD
Pre-Lease: 980,000 s.f.
Tenant: NFI
Industry: 3PL
601 Memory Lane
New lease: 458,000 s.f.
Tenant: Harley Davidson
Industry: Auto, Auto Parts & Tires
597 Alexander Spring Road
New lease: 1,059,650 s.f.
Tenant: Mondelez International
Industry: Food & Beverage
221 South 10th Street
Renewal: 489,213 s.f.
Tenant: Genco
Industry: 3PL
100 Quality Circle
Renewal: 440,000 s.f.
Tenant: Ingram Micro
Industry: Communications / Tech /
Media
2834 Schoeneck Road
Renewal: 270,000 s.f.
Tenant: The Lehigh Group
Industry: Consumer Durables
2869 Route 22
New lease: 550,000 s.f.
Tenant: Bridgestone Tires
Industry: Auto, Auto Parts & Tires
Phoenix
Portland
Reno
Seattle
1110 North 127th Avenue
New lease: 278,000 s.f.
Tenant: Conn’s Furniture
Industry: Consumer Durables
Rivergate Corporate Center
Renewal: 402,450 s.f.
Tenant: Georgia Pacific
Industry : Paper & Packaging
2375 East Newlands
New Lease: 337,500 s.f.
Tenant: TREX Industries
Industry: Consumer Durables
Pacific Gateway Business Park
Renewal: 265,000 s.f.
Tenant: Pacific Distribution Services
Industry: 3PL
3215 Commerce Center Boulevard
Pre-Lease: 1,000,000 s.f.
Tenant: Wal-Mart
Industry: Retailer (e-commerce)
2040 North Union Street
Renewal: 507,000 s.f.
Tenant: Sears Tires
Industry: Auto, Auto Parts & Tires
40 Logistics Drive
New lease: 550,000 s.f.
Tenant: Menlo Logistics
Industry: 3PL
9750 Commerce Circle
New Lease: 503,000 s.f.
Tenant: One Kings Lane
Industry: Retailer (e-commerce)
771 East Watson Center Road
Direct lease: 258,678 s.f.
Tenant: Damco Distribution
Industry: Logistics & Distribution
201 Fulling Mill Road
Renewal: 650,761 s.f.
Tenant: Schneider Electric
Industry: Communications / Tech /
Media
Valley South
Renewal: 370,000 s.f.
Tenant: Pacific Distribution Services
Industry: 3PL
Pacific Gateway
Renewal: 265,000 s.f.
Tenant: HD Supply
Industry : Logistics & Distribution
Jones Lang LaSalle • U.S. Big Box Outlook • Fall 2013 20
Big box leases, YTD 2013
Seattle (continued)
St. Louis
Park 277
Renewal: 262,000 s.f.
Tenant: PlyGem
Industry : Construction Materials &
Building Fixtures
5620 Inner Park Drive
Renewal: 1,200,000 s.f.
Tenant: Unilever
Industry: Consumer Non-Durables
3971 Lakeview Corporate Drive
Renewal: 540,000 s.f.
Tenant: World Wide Technology
Industry: Communications / Tech /
Media
4702 Park 370 Boulevard
New/Expansion: 494,000 s.f.
Tenant: Jacobson
Industry: Food & Beverage
9 Gateway Commerce Center Drive
New lease: 297,000 s.f.
Tenant: Unilever
Industry : Consumer Non-Durables
Jones Lang LaSalle • U.S. Big Box Outlook • Fall 2013 21
Retailers are adapting to avoid deletion
E-commerce demand concentration, by market
Seattle/Puget Sound
Boston
Chicago
Sacramento
NorCal
Salt Lake City
Columbus
Philadelphia
Indianapolis
San Joaquin
Baltimore
Cincinnati
St. Louis
Inland Empire
Memphis
Atlanta
Phoenix
Dallas/Fort Worth
100-249 ksf = Smaller e-tailers / operations
Tampa
250-749 ksf = Regional fulfillment centers
750-1 msf+ = Mega fulfillment centers
Retailer (e-commerce)
Percent of industry demand, by size
100-249 ksf
12%
1 msf+
36%
500-749 ksf
33%
By count
750-999 ksf
6%
New Jersey
250-499 ksf
12%
Online sales are only increasing
• Total U.S. retail sales were $4.4 trillion in 2012; e-commerce comprised 5.5
percent of this. E-commerce sales are expected to nearly double over the next
four years.
• The rate of internet penetration in the U.S. is high at 81.0 percent and there were
253.4 million internet users in 2012 – 183.8 million of which are estimated to be
online shoppers. This means that 59 percent of the country’s population
shops online.
Evolving in order to stay relevant
• Retailers are deploying substantial capital to stay relevant in today’s environment,
and this directly benefits industrial real estate.
• The numbers do not lie: Wal-Mart experienced comparable-store sales growth of
3.3. percent from 2011 to 2012; their web sales were up 20.3 percent over the
same time period. Other major retailers have similar success stories. Macy’s
posted a one-tenth of a percentage point increase in comparable store sales, yet
41.0 percent growth via their website; the Home Depot was one-tenth versus 16.7
percent, Sears Holdings was negative 7.5 percent versus 16.5 percent growth, and
Lowe’s was one-fifth of a percentage point compared to a resounding 51.5 percent
jump in their web sales.
Market potential benefits industrial demand
• Twelve percent of total U.S. requirements, on a square footage basis, are ecommerce-related.
• U.S. industrial construction activity was 96.7 million square feet near the end of
third quarter. Of this, 10.4 percent was comprised of e-commerce users, and all
committed to build-to-suit or owner-built facilities. This speaks to the building
requirements today’s occupiers demand in this highly specialized industry.
Jones Lang LaSalle • U.S. Big Box Outlook • Fall 2013 22
For more information please contact:
Craig S. Meyer, SIOR
President
Industrial Brokerage
Services – Americas
T +1 424.294.3460
[email protected]
Aaron L. Ahlburn
Senior Vice President
Americas Director of
Research – Industrial
T +1 424.294.3437
[email protected]
Head of Supply Chain & Logistics Solutions
Richard H. Thompson
Managing Director
T +1 773.458.1385
[email protected]
www.us.jll.com/industrial
Dain Fedora
Research Manager
Americas Industrial
T +1 213.239.6262
[email protected]
Head of Retail/e-commerce Distribution
Kristian D. Bjorson, SIOR
International Director
T +1 773.458.1397
[email protected]
About Jones Lang LaSalle
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