Northeast Real Estate Business magazine covers the multifamily, retail, office, healthcare, industrial and hospitality sectors in the Northeast United States.
Issue link: https://northeastrealestatebusiness.epubxp.com/i/632700
Northeast Real Estate Business • January/February 2016 • 21 M A R K E T H I G H L I G H T: P H I L A D E L P H I A & D E L A WA R E Class A Ofce & Modern Flex/R&D; Space is available NOW in one of the largest cities in Maryland. Bowie is an excellent business location, with easy—less than 30 minutes—access to and from Washington D.C. and Reagan National Airport, Annapolis, Baltimore and BWI Airport. Bowie's proximity to these major cities brings business and workforce into the area via Routes 3, 50 and 301. Bowie has more than 90 restaurants, 200 shops, and a dozen recreation opportunities. With this winning combination of location, access and amenities businesses are certain to grow and succeed. Melford at US 50 & US 301 Susan Homberg Muia, 410.369.1297 1,000 sq. ft. to 85,000 sq. ft. Class A Ofce 2,000 sq. ft. to 60,000 sq. ft. Flex or R&D; 200,000 sq. ft. of R&D; space possible, just ask! One Town Center Brent Prossner, 301.961.3079 1,000 sq. ft. to 88,000 sq. ft. Class A Ofce 16461 Excalibur Road William Stefey, 410.703.6553 1,000 sq. ft. to 15,000 sq. ft. Ofce or Medical For more information on all of Bowie's locations and opportunities contact: John Henry King, Economic Development Director, City of Bowie, Maryland 15901 Excalibur Road Bowie, MD, 20716 301.809.3042 | fax 301.809.2315 | jhking@cityofbowie.org Bowie is Bullish on Maryland! Metro Philadelphia's industrial market saw strong demand, develop- er confdence and declining vacancy rates in 2015. Asking rents averaged $4.43 per square foot for the region, a 4 percent increase from 2014. The overall vacancy has decreased to 7.7 percent as demand kept pace with 5.7 million square feet of completed spec development. The only submarket that is posting greater than 10 percent vacancy is New Castle County, Dela- ware; however, New Castle's vacancy rate was trending downward at the end of 2015. We continue to see healthy demand for industrial space in 2016. There could be some impact from global un- certainties, but these will be offset by continued on-shoring of manufactur- ing requirements and last-mile deliv- ery expansion. Companies seeking between 25,000 to 80,000 square feet have seen limited availability in most submarkets, par- ticularly for purchase. Due to strong demand and reduced availability for modern, net-leased, single-tenant buildings, some investors must con- sider lesser-quality assets and/or sec- ondary locations. Sale prices and rents have in- creased. It is not unusual for modern bulk facilities with long-term leases in place to trade in the $90-per-square- foot range. In one recent deal, a pri- vate investor paid more than $78 per square foot for the leaseback transac- tion of an 85-year-old manufacturing building. Asking rents increased in all submarkets. Free rent has decreased and the spread between asking and signing rents has narrowed. Annual rent escalations have been trending upward. For instance, 2.5 to 3 percent escalations have become more preva- lent. Land prices are also increasing. In the inner-ring suburban Philadel- phia counties, the $125,000-per-acre price threshold has steadily risen. Approximately 9.4 million square feet of spec development is set for de- livery in the frst two quarters of 2016. There may be a temporary oversup- ply of bulk warehouse space until de- mand catches up. More than 6 million square feet of the spec supply will be added to the Lehigh Valley and South- ern I-81/I-83 markets where vacancy rates are in the 5 to 6 percent range. Multiple build-to-suit projects will come on line in early 2016, including buildings for WW Grainger and H&M; in Burlington County, New Jersey. Southern New Jersey has begun to see more activity from Central and North Jersey companies as those warehouse markets have tightened. Third-party logistics companies, food and e-commerce sectors have been very active. Last-mile delivery requirements have been increasing and are likely to be more prevalent in 2016. This includes companies like FedEx expanding package deliveries, as well as smaller companies such as pre-packaged meal providers. We ex- pect to see more of the last-mile deliv- ery companies looking at areas near interchanges of the Pennsylvania and New Jersey turnpikes within close proximity to population centers. Liberty Property Trust, First Indus- trial, Duke Realty, Hillwood Proper- ties, Exeter, USAA, MPRT and Der- mody Properties are some of the most active developers. Duke, Cabot Prop- erties and Gramercy Property Trust have been expanding their regional holdings, and private equity inves- tors, such as Circle Industrial, have been entering the market. In addition, there were multiple mega-deals for investment fund portfolios changed that the ownership landscape in 2015, such as an affliate of Global Logistics Properties acquiring Industrial In- come Trust. Larry Bergen Senior Vice President, Principal | Philadelphia, Colliers International INDUSTRIAL DEMAND AND DEVELOPMENT IN THE PHILADELPHIA REGION Would you like to contribute to an upcoming issue? Contact editor Jaime Lackey at jlackey@francemediainc.com. Interested in advertising? Contact Scott France at scott@francemediainc.com or 404-832-8262. March/April issue: • New York City • New Jersey May issue: • Rhode Island • Lehigh Valley Upcoming Market Highlights