Northeast: 2019 – Q1
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NORTHEAST MARKET 1ST QUARTER 2019 MARKET OVERVIEW QUARTERLY HIGHLIGHTS ALLEN COUNTY FORT WAYNE IS MAKING CONSISTENT INROADS IN REDEVELOPING Fort Wayne is the second ITS DOWNTOWN. NOTED FOR ITS SOLID ARCHITECTURAL BONES, 2018 Total Population 355,329 largest city in Indiana with a THE DOWNTOWN IS DRAWING THE NOTICE OF MORE TENANTS AND 2023 Total Population 391,059 population of 253,828 and is DEVELOPERS. 2018-2023 Pop Growth 0.72% located in Allen County. The A turn-of-the-century initiative to revitalize the Fort Wayne % Pop with College northeast region includes nine downtown is bearing fruit. Supported by a public-private 36.7 Degrees counties: LaGrange, Steuben, partnership similar to those enabling renewals of other Midwestern 2018 Households 146,592 Noble, DeKalb, Whitley, downtowns, the Fort Wayne project is drawing attention from developer’s intent on turning historic landmarks into new places Huntington, Wells, and Adams. 2023 Households 152,116 to live, work and play. Target industries that drive the 2018 Median HH Income $53,552 The Grand Wayne Convention Center has become an anchor of economy are diverse - specialty 2018 Average HH one of several nodes where renewal can flourish, and planners are $71,340 insurance, medical devices and beginning to consider adjoining properties for an expansion. Income technology, manufacturing, Source: Esri Another pillar in the revitalization is Parkview Field, home of the design and creative services, Midwest League’s Fort Wayne TinCaps Single A affiliate of the San NINE COUNTY REGION agriculture, and logistics. Diego Padres. The ballpark opened in 2009. 2018 Total Population 648,132 Electric Works, a $440 million mixed-use repurposing of the 2023 Total Population 700,021 Major employers include: 39-acre former General Electric Fort Wayne Works, is moving Parkview Health Systems, forward. Financed by municipal bonds, the project is focused on 2018-2023 Pop Growth 0.58% making cost-conscious downtown living a reality.(1) Steel Dynamics, General Median Age 37.4 Motors, Lincoln Financial Tenants announced for Electric Works include Parkview Health, Group, BF Goodrich, Frontier Medical Informatics Engineering, Indiana Tech and Fort Wayne 2018 Households 246,075 Communications, Vera Bradley, metals. Hampton Inn & Suites and another hotel are planned in 2023 Households 266,059 the vicinity. Sweetwater Sound, Raytheon, 2018 Median HH Income $53,117 Current goals for civic boosters include concentrating retail and and Nestle. Medical companies 2018 Average HH $68,985 in Northeast Indiana generate mixed-use development along a defined set of streets; encouraging Income investment in new and existing buildings and infrastructure; and 17 billion in revenue and Source: Esri supporting a study of the Riverfront Fort Wayne Conceptual account for one-third of the Plan, which is designed to link renewed parts of the downtown. UNEMPLOYMENT RATE MARCH ‘19 worldwide orthopedic market. Additional goals include making the downtown more inviting for Allen County 3.5% pedestrians, bicyclists and motorists. Still other goals encompass the arts, housing, parking, and marketing.(2) 9 County Region 3.0% (1) https://www.bloomberg.com/news/articles/2019-04-08/rust-belt-turns-to-munis-to-breathe- Indiana 3.9% life-into-dead-factories (2) https://indianaeconomicdigest.com/Content/Most-Recent/Region-3/Article/Study-looks-at- United States 3.9% Grand-Wayne-s-role-in-a-changing-downtown-Fort-Wayne/31/81/95372 Source: Hoosiers by the Numbers 111 E. LUDWIG RD., SUITE 101 , FORT WAYNE, IN 46825 | 260.423.4311 /company/bradley-company @bradley_company /bradleycompanyCRE @bradleycompany NORTHEAST MARKET 1ST QUARTER 2019 INDUSTRIAL OVERVIEW MARKET RENT PER SF* FORECAST CONTINUED EXPANSIONS AND NEW PROJECTS ARE DRIVING INDUSTRIAL $4.00 VACANCIES DOWN, AND RENTS AND ASKING PRICES UP, ACROSS $3.80 • Northeast Indiana NORTHEAST INDIANA. and Allen County A solid flow of projects is pumping energy into the industrial $3.60 continue to be in market in various manufacturing sectors. Indeed, industrial was the demand for industrial most active commercial real estate sector early this year. The major $3.40 sites. As a result, economic drivers for Northeast Indiana performed well in the most $3.20 vacancies have been recent quarter, which continued to push vacancy rates down. Vacancy declining since the contracted to 1.0% from 2.9% in the prior period, and the market rent $3.00 2nd quarter of remained virtually the same at $3.89 per square foot, per CoStar. The Q1 Q2 Q3 Q4 Q1 ‘18 ‘18 ‘18 ‘18 ‘19 2018. This trend market sale price showed a slight increase to $35.43 and that trend is expected to continue. is expected to CONSTRUCTION STARTS IN SF* continue until later An innovative project north of Fort Wayne is an example of the 180K in 2019, when the activity. In Ashley, Brightmark Energy plans to break ground in May first spec building for a facility designed to initially convert waste plastic into ultra low- 140K sulfur diesel fuel, gasoline and industrial wax products. (3) starts construction 100K at the 223-acre In Bluffton, the redevelopment commission is providing $8 million Airport Expressway in economic development incentives to help a developer double the 60K Economic size of Parlor City Warehouse to 400,000 square feet. The new space Development Area in is speculative. The original building was constructed in 2014 to offer 20K Fort Wayne. businesses a modern facility with high ceilings and energy efficiency 0 as well as close access to Interstate 69 and Indiana Highway 124. (4) Q1 Q2 Q3 Q4 Q1 ‘18 ‘18 ‘18 ‘18 ‘19 • Spec buildings will Bendix Commercial Vehicle Systems is adding a 409,000-square-foot continue to drive the VACANCY RATE* facility in Huntington to make brake components for commercial 4.5% industrial sector as vehicles. Total investment is expected to range between $10 million 4.0% manufacturers look and $15 million. Forty jobs will be created when the plant opens in 3.5% for shell buildings 2020. Bendix is headquartered in Elyira, Ohio, and owned by Knorr- 3.0% over shovel-ready Bremse Group of Munich, Germany. Bendix operates five plants in Huntington employing a total of 440.(5) 2.5% land that will 2.0% expedite openings or Sabert Corp. has asked the Fort Wayne City Council to allow for an 1.5% expansions of their 292,000-square-foot addition to its plant in Earth Industrial Park. 1.0% operations. The location manufactures containers for the food-service industry. 0% Sabert, headquartered in Sayreville, New Jersey, acquired the plant Q1 Q2 Q3 Q4 Q1 • Construction starts (6) ‘18 ‘18 ‘18 ‘18 ‘19 through its 2016 purchase of Fort Wayne-based Mullinix Packages. will also begin to Accugear plans to add 67,000 square feet to its 89,000-square-foot SALES BY BUYER TYPE* increase in the facility in Fort Wayne. The company, which makes automotive 9% User second quarter of components including gears, will spend $7 million on the building 33% 2019, as more spec and $6 million on equipment. Sixty employees would be added to the Institutional buildings are planned, (7) current 100. driving an increase in (3) https://www.fwbusiness.com/fwbusiness/article_c210f509-483b-59c8-a92f-1bbdb3f9005a.html sale prices and rent. (4) https://www.fwbusiness.com/fwbusiness/article_0a1f989b-b960-5076-a630-c887781bbc6c. 58% Private html (5) https://neindiana.com/news/bendix-adding-building-40-jobs (6) https://neindiana.com/news/sabert-corp-expanding-local-operations *Source: CoStar (7) https://www.news-sentinel.com/news/local-news/2019/03/11/13-million-expansion-to-create- 60-jobs-at-accugear/ 111 E. LUDWIG RD., SUITE 101 , FORT WAYNE, IN 46825 | 260.423.4311 /company/bradley-company @bradley_company /bradleycompanyCRE @bradleycompany NORTHEAST MARKET 1ST QUARTER 2019 OFFICE OVERVIEW MARKET RENT PER SF* FORECAST $14.70 AVAILABLE SPACE IS TIGHTENING AS THE ECONOMY EXPANDS. THIS TREND IS EXPECTED TO CONTINUE INTO THE FORESEEABLE FUTURE. $14.65 • Demand for Expanding businesses and start-ups will drive the need for $14.60 downtown office space will remain high office space in the future. To that end, the success of the Electric $14.55 Works redevelopment could play a substantial role in incubating as Electric Works growth. The demand for downtown office space is the highest it $14.50 continues to develop. has been in years. As a result, space is at a premium and sales are $14.45 This trend may a seller’s market. Parking spaces are at an all-time high as well drive up vacancies and continue to climb based on supply and demand. Multi-tenant $14.40 Q1 Q2 Q3 Q4 Q1 in some submarkets, development growth continues at a strong pace drawing young ‘18 ‘18 ‘18 ‘18 ‘19 as older suburban and old professionals and retirees to reside in an ever-developing office buildings environment rich in entertainment and life services. VACANCY RATE* compete against 6.4% Indiana University Research and Technology Corp., which supports 6.3% newer construction technology transfer from the university to entrepreneurs, is a non- 6.2% or renovations profit corporation that announced in March that it plans to add a 6.1% downtown. location in Electric Works to stay close to a center of innovation. The 6.0% new office is expected to mirror IURTC’s presence in other areas 5.9% • Suburban offices of Indiana: Fishers IoT Lab, Union 525 in Indianapolis, Dimension 5.8% may look to revitalize Mill in Bloomington, and Westgate at Crane. The IURTC said it 5.7% older spaces and also will use the location to tap into entrepreneurial expertise of IU 5.6% 5.5% add amenities to alumni in Northeast Indiana.(8) Q1 Q2 Q3 Q4 Q1 ‘18 ‘18 ‘18 ‘18 ‘19 make them more Also committing to Electric Works recently is the Fort Wayne office attractive to future of Fort Lauderdale, Florida-based Spherion Staffing.