Q4 2014 | INDUSTRIAL

CHARLOTTE, NORTH CAROLINA

INDUSTRIAL MARKET REPORT

Low Vacancy Rates Make Way for

Speculative Building
Distribution Technology signed a lease for 104,000 SF at 3550 Westinghouse Blvd.
The Rooms-to-Go Outlet located at 2730 Queen City Drive sold for $23.8 million. New
York Life bought the 445,000 SF facility for $53.48 PSF.
Beacon Partners purchased the Ross Stores Distribution Center for $14,025,000. The
235,321 SF facility located at 1092 Wilson Business Park is fully leased to Ross Stores.

MARKET INDICATORS
RELATIVE
TO PRIOR
QUARTER

Ashley Furniture renewed their 124,670 SF lease at 2121 Distribution Center Drive within
Charlotte Distribution Center.

FORECAST

VACANCY

Prologis has started construction on a speculative 205,081 SF industrial building in West

Pointe Business Park, located near the intersection of interstates 485 and 85 in West
Charlotte. Ta Chen a Taiwan-based distributor of stainless steel products has preleased
101,309 SF Expected to be completed in May, this project is one of several speculative
spaces coming to the market in 2015.

ABSORPTION
RENTAL RATE
CONSTRUCTION

Eatons Cooper Wiring Devices renewed their 165,000 SF lease at 5910 Long Creek Park
Drive in Charlottes North Submarket.

> Supply of available industrial

facilities continues to decrease
as developers race to complete
speculative projects.

CHARLOTTE INDUSTRIAL MARKET

> In the most established submarkets

landlords continue to have the ability
to push rental rates.

3,000,000

20%

2,000,000

15%

1,000,000
10%
2014

2013

2012

2011

2010

2009

2008

2007

2006

(1,000,000)

2005

0
2004

Square Feet

> A new era of economic growth and

innovation is expected in the Queen
City with the announcement of
Google Fiber.

25%

4,000,000

0%

(2,000,000)
Absorption

www.colliers.com/charlotte

5%

Deliveries

Vacancy %

> Q4 2014 STATISTICS

133,145,101 SF
TOTAL MARKET INVENTORY

5.82%
OVERALL VACANCY RATE

5.03%
WAREHOUSE VACANCY RATE

RESEARCH & FORECAST REPORT | Q4 2014 | CHARLOTTE, NC

CHARLOTTE, NORTH CAROLINA INDUSTRIAL MARKET

Bldgs

Total
Inventory
Sq Ft

Direct
Vacant
Sq Ft

Direct
Vacancy
Rate

Sublease
Vacant
Sq Ft

Sublease
Vacancy
Rate

Total
Vacant
Sq Ft

Vacancy
Rate
Current

Vacancy
Rate
Prior Qtr

Net
Absorption
Current Qtr
SF

Net
Absorption
YTD SF

Net
New Supply
Current Qtr
SF

Net New
Supply
YTD SF

Under
Construction
Sq Ft

Avg
Rental
Rate

CENTRAL
WAREHOUSE

279

8,816,195

342,664

3.89%

0.00%

342,664

3.89%

5.39%

132,902

163,160

$4.33

FLEX

21

906,103

59,477

6.56%

0.00%

59,477

6.56%

6.97%

3,675

15,019

$15.60

Total

300

9,722,298

402,141

4.14%

0.00%

402,141

4.14%

5.54%

136,577

178,179

$7.34

AIRPORT/WEST
243

12,680,372

525,422

4.14%

0.00%

525,422

4.14%

4.60%

57,284

246,544

FLEX

WAREHOUSE

46

1,797,321

169,733

9.44%

0.00%

169,733

9.44%

8.08%

(24,528)

(35,949)

205,080

Total

289

14,477,693

695,155

4.80%

0.00%

695,155

4.80%

5.03%

32,756

210,595

205,080

$4.30

477,487

107,200

415,543

$4.73

4,137

107,200

$3.72
$7.25

NORTH
197

16,279,274

606,641

3.73%

22,000

0.14%

628,641

3.86%

4.28%

68,719

FLEX

WAREHOUSE

93

3,776,495

398,791

10.56%

7,010

0.19%

405,801

10.75%

10.00%

(28,136)

Total

290

20,055,769

1,005,432

5.01%

29,010

0.14%

1,034,442

5.16%

5.36%

40,583

481,624

415,543

$8.45
$5.47

NORTHWEST
WAREHOUSE

223

13,579,139

1,282,301

9.44%

0.00%

1,282,301

9.44%

5.06%

(540,970)

(407,988)

56,771

$3.71

FLEX

13

528,593

19,875

3.76%

0.00%

19,875

3.76%

3.00%

(4,000)

(4,750)

$0.00

Total

236

14,107,732

1,302,176

9.23%

0.00%

1,302,176

9.23%

4.98%

(544,970)

(412,738)

56,771

$3.71

WAREHOUSE

503

19,894,093

663,077

3.33%

0.00%

663,077

3.33%

4.00%

133,395

139,922

$4.22

FLEX
Total

99
602

3,788,921
23,683,014

381,037
1,044,114

10.06%
4.41%

0
0

0.00%
0.00%

381,037
1,044,114

10.06%
4.41%

10.51%
5.04%

17,299
150,694

75,889
215,811

$7.55
$4.69

WAREHOUSE

683

44,327,065

2,353,873

5.31%

20,160

0.05%

2,374,033

5.36%

5.10%

183,655

578,230

310,960

560,302

FLEX

190

6,771,530

868,368

12.82%

26,652

0.39%

895,020

13.22%

15.96%

185,708

374,203

Total

873

51,098,595

3,222,241

6.31%

46,812

0.09%

3,269,053

6.40%

6.55%

369,363

952,433

310,960

560,302

162,600

783,223

EAST

SOUTH
162,600
-

$4.37
$8.05
$5.13

CHARLOTTE TOTAL
WAREHOUSE

2,128

115,576,138

5,773,978

5.00%

42,160

0.04%

5,816,138

5.03%

4.76%

34,985

1,197,355

367,731

667,502

FLEX

462

17,568,963

1,897,281

10.80%

33,662

0.19%

1,930,943

10.99%

11.84%

150,018

428,549

Total

2,590

133,145,101

7,671,259

5.76%

75,822

0.06%

7,747,081

5.82%

5.70%

185,003

1,625,904

367,731

667,502

783,223

$4.21
$8.41
$4.89

QUARTERLY COMPARISON AND TOTALS

Q3-14

2,589

132,576,280

7,342,686

5.54%

99,822

0.1%

7,442,508

5.61%

5.88%

456,735

1,440,901

108,800

356,542

726,503

$4.85

Q2-14

2,589

132,467,250

7,956,051

6.01%

84,112

0.1%

8,040,163

6.07%

6.39%

497,716

984,166

78,319

247,742

524,341

$4.94

Q1-14

2,589

132,677,635

7,898,612

5.95%

314,412

0.2%

8,213,024

6.19%

6.44%

486,450

486,450

169,423

169,423

498,079

$4.84

Q4-13

2,589

132,572,116

8,234,754

6.21%

426,577

0.3%

8,661,331

6.53%

7.65%

1,503,530

3,307,646

19,554

31,554

199,342

$4.76

Q3-13

2,584

132,103,407

9,828,229

7.44%

342,577

0.3%

10,170,806

7.70%

8.22%

704,842

1,804,116

12,000

12,000

109,554

$4.82

Q2-13

2,588

132,193,965

10,859,123

8.21%

320,800

0.2%

11,179,923

8.46%

9.10%

844,061

1,099,274

12,000

$4.82

Q1-13

2,588

132,174,406

11,647,284

8.81%

376,700

0.3%

12,023,984

9.10%

8.50%

275,352

275,352

46,000

46,000

12,000

$4.60

Q4-12

2,721

139,718,727

11,368,747

8.10%

437,923

0.3%

11,806,670

8.50%

9.00%

823,715

1,907,785

46,237

369,114

270,400

(157,144)

0.5%

$4.75
The data tracked
County. The1,084,070
data does not reflect
in the greater
Charlotte
Region.
12,715,053
9.2% is for Mecklenburg
9.7%
709,880
64,456the activity
102,421
472,637
$4.65

727,169

0.5%

14,048,040

10.1%

9.7%

(464,342)

102,421

266,693

$4.65

654,649

0.50%

13,809,693

9.80%

10.00%

265,776

265,776

102,421

102,421

220,456

$4.60

9.5%

581,184

0.40%

13,973,048

10.0%

9.9%

(8,290)

2,017,623

14,900

51,220

258,421

$4.43

9.5%

598,140

0.4%

13,653,964

9.9%

10.3%

937,898

2,108,235

36,320

36,320

29,900

$4.28

10.1%
10.9%

248,724
405,185

0.2%
0.3%

14,473,220
15,666,169

10.3%
11.2%

11.2%
#REF!

1,192,949
(22,612)

1,170,337
(22,612)

66,220
-

$4.27
$4.27

Q3-12

2,716

138,447,289

12,075,139

8.7%

639,914

9.5%

Q1-12

2,712

140,432,884

13,155,044

9.40%

Q3-11

2,709

140,315,563

13,351,718

Q2-11
Q1-11

2,708
2,708

140,279,243
140,279,243

14,224,496
15,260,984

Q2-12
2,713OF 139,546,710
13,320,871
COMPARISON
LEASE RATES

Q4-11
140,330,463
13,391,864
Class
A & B 2,710
Existing
Buildings

$4.05

$3.25

AVERAGE
CURRENT
RATE

AVERAGE
CURRENT
RATE

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

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

P. 2

| COLLIERS INTERNATIONAL

CLASS B WAREHOUSES - Lease rates derived from a representative set

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

INDUSTRIAL MARKET REPORT | Q4 2014 | CHARLOTTE, NC

The

2014 INDUSTRIAL LEASE & SALES TRANSACTIONS

PROPERTY

SUBMARKET

TENANT

SIZE (SF)

205 Enterprise Way

Iredell County

Dunlop

105,000

2121 Distribution Center Dr.

Northwest

Ashley Furniture

124,670

1810 West Pointe Drive

Airport/West

Ta Chen

101,309

2525 Distribution St.

Central

ACSM

10,000

3550 Westinghouse Blvd.

Southwest

Distribution Technology

104,000

WAREHOUSE/FLEX LEASES

SIZE (SF)

$ / SF
OR ACRE

Pac Investment

87,337

$18.92

Southwest

5120 Westinghouse LLC

71,870

$25.34

3801 Corporation Circle

Northwest

Skillet LLC

14,678

$32.36

310, 320, 330 Aviation

Irdelle County

GMS Racing

156,000

$35.26

PROPERTY

SUBMARKET

BUYER

5301 Terminal St.

Northwest

5120 Westinghouse Bvld.

INDUSTRIAL SALES

COMPANY

TYPE

PARK

SIZE
(SF)

STATUS

900 & 1100 Center Park - Colliers International

represented both the buyer and the seller of these
multi tenant flex industrial buildings. The seller
was Carrier Centers LLC. The two buildings total
150,000 SF and are 100% leased.

COMPLETED & UNDER CONSTRUCTION BUILDINGS

Beacon Partners

Bulk Distribution

InnerLoop - North

415,541

Under Contruction

Childress Klein

Bulk Distribution

Ridge Creek West

310,960

Delivered

Trinity Partners

Bulk Distribution

215 International Drive

277,235

Delivered

Exeter Property Group Bulk Distribution

Gateway Distribution Park

110,000

Under Construction

Childress Klein

Bulk Distribution

Afton Ridge

360,000

Under Construction

The Silverman Group

Bulk Distribution

Concord Airport Park

550,000

Delivered

Pro Logis

Bulk Distribution

West Pointe

205,081

Under Construction

EastGroup

Flex

Steele Creek Comm. Park

178,800

Under Construction

310,320,330 Aviation Way- Colliers International

represented Wells Fargo in the sale of 156,000
square feet to GMS Racing. The buildings will be
used to house motorsport operations.

Bold text indicates Colliers International transaction

UNDER CONSTRUCTION
Demand for Class A
space has outstripped
supply.
Five buildings are
currently under
construction.

GATEWAY PHASE IISouthwest

110,000 SF
Breaking Ground 1st Quarter 2015

P. 3

| COLLIERS INTERNATIONAL

INNERLOOP NORTH (2 BUILDINGS) North

415,541 SF
4th Quarter 2014 Delivery

Over 2.4 million SF of

industrial speculative
space planned.

205 Enterprise Way- Colliers International

represented Dunlop Aircraft Tyre lease of 205
Enterprise Way. The 108,000 square foot facility
will be used for the retreading of aircraft tires.

INDUSTRIAL MARKET REPORT | Q4 2014 | CHARLOTTE, NC

4TH QUARTER 2014 | Net Absorption by Submarket

4TH QUARTER 2014 | Vacant Space By Class

600,000

CLASS A
910,171 SF

400,000

$2.1

NORTHWEST

SOUTH

management

Charlotte Industrial Team

Greg Copps | SIOR
Managing Partner

(600,000)

Class B

Over 15,800 professionals

UNITED STATES:

(400,000)

Class A

billion in annual revenue

Over 1.46 billion square feet under

EAST

NORTH

(200,000)

AIRPORT/WEST

CLASS B
3,265,030 SF

CENTRAL

CLASS C
3,571,880 SF

Square Feet

200,000

485 offices in
63 countries on
6 continents

Class C

Lawrence Shaw | SIOR

Managing Partner

Investment Highlights
Cap rates for well located and functional general purpose industrial buildings are creeping into
the low 6% cap range and in some cases breaking the 6% barrier regardless of remaining term.
Valuations on these buildings are translating to $55-$60 PSF. The fourth quarter also saw notable
multi-tenant small bay flex industrial transactions highlighted by the 900 & 1110 Center Park deal
which sold for $90 PSF and was sub 7% on the cap rate. Industrial remains a favored asset class
as the focus now shifts to the 2MM square feet of speculative product being delivered in the first
quarter of 2015. As long as capital costs remain at record lows we will continue to see downward
pressure on cap rates for quality buildings that stand the test of time.

PROPERTY NAME
ADDRESS

TRANSACTION
VALUE

RSF

Southwest

$13,500,000

150,000

$90.00

Wilson Lakes

Southwest

$14,025,000

255,168

Lakemont Portfolio

Southwest

$44,200,000

Perimeter Woods

North

1200 Atando Ave.

East

SUBMARKET

PRICE
CAP
PER RSF RATE

TENANCY

BUYER

6.5%

Multi

Family Trust

$55.00

call

Single

Beacon Partners

680,000

$65.00

call

Multi

Invesco RE

$28,000,000

310,000

$90.32

7.6%

Multi

Stockbridge

$5,900,000

163,902

$50.00

7.7%

Single

Beacon Partners

Grant Miller
Vice President | Industrial

Rob Speir
Vice President | Industrial

Don Moss | SIOR | CCIM

Vice President | Industrial

Justin Smith
Associate | Industrial

INVESTMENT SALES
Center Park
Portfolio

Deven Griffin
Associate | Industrial

Chris Neal
Associate | Industrial

301 S College Street | Suite 3350

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

Bonded Logistics

Northeast

$4,100,000

101,591

$40.36

call

Single

STAG Industrial

2730 Queen City Dr.

Airport/West

$23,800,000

445,000

$53.48

call

Single

New York Life

Property Consultants, an affiliation of independent companies with

over 485 offices throughout more than 63 countries worldwide.

Accelerating success.
www.colliers.com/marketname