Industrial
NAI Wisinski honored with 7 CoStar Power Broker Awards
Mar 27th
NAI Wisinski has been awarded 7 CoStar Power Broker Awards: 5 individual awards and 2 firm awards.
Dave Smies and Stu Kingma were both given awards for Top Industrial Leasing Brokers, Bill Tyson was recognized as a Top Retail Leasing Broker, and Stan Wisinski and Mary Anne Wisinski-Rosely were both recognized as Top Sales Brokers.
In addition, NAI Global as a whole was well represented, bringing in 132 individual awards and 91 firm awards across the country.
Dave Smies
Stu Kingma
Bill Tyson
Stan Wisinski
Mary Anne Wisinski-Rosely
Grand Rapids, other Michigan cities rank high for corporate site selection
Mar 5th
Grand Rapids and Wyoming rank 10th for corporate site selection
By: David Czurak
From the Grand Rapids Business Journal
The combined cities of Grand Rapids and Wyoming were named by Site Selection magazine as the nation’s tenth ranked metro area among locales with a population between 200,000 and 1 million.
Dayton, Ohio, captured the top spot in that category.
Site Selection has made these awards annually since 1978 and it focuses on “new corporate facility projects with significant impact” to compile its rankings.
Commercial Real Estate Sectors Steadily Improve
Feb 25th
WASHINGTON (February 25, 2013) – Major commercial real estate sectors continue to improve, albeit slowly, with gradual economic improvement and job creation driving absorption of space, according to the National Association of RealtorsÒ quarterly commercial real estate forecast.
Lawrence Yun, NAR chief economist, said rental housing demand has been exceptionally strong. “Rent increases have been higher in multifamily housing where supply is not matching strong demand, thereby allowing landlords to raise rents at faster rates,” he said. “Overall commercial real estate leasing activity continued to grow in most markets during the closing months of 2012, which is modestly lowering vacancy rates in all of the commercial sectors early this year.”
National vacancy rates over the coming year are expected to decline 0.4 percentage point in the office market, 0.4 point in industrial, 0.3 point for retail and 0.1 point in multifamily, with that sector experiencing the tightest availability.
“Business spending is expected to rise faster in 2013 because of record high corporate profits. Low interest rates also are permitting companies to improve their balance sheets,” Yun said.
NAR’s latest Commercial Real Estate Outlook1 offers projections for four major commercial sectors and analyzes quarterly data in the office, industrial, retail and multifamily markets. Historic data for metro areas were provided by REIS, Inc.,2 a source of commercial real estate performance information.
Office Markets
Vacancy rates in the office sector are forecast to fall from a projected 16.0 percent in the first quarter to 15.6 percent in the first quarter of 2014.
The markets with the lowest office vacancy rates presently (in the first quarter) are Washington, D.C., with a vacancy rate of 9.4 percent; New York City, at 9.6 percent; and Little Rock, Ark., 12.1 percent.
Office rents should increase 2.6 percent in 2013 and 2.8 percent next year, following a 2.0 percent gain in 2012. Net absorption of office space in the U.S., which includes the leasing of new space coming on the market as well as space in existing properties, is expected to total 34.0 million square feet this year and 42.3 million in 2014.
Industrial Markets
Industrial vacancy rates are likely to decline from 9.6 percent in the first quarter of this year to 9.2 percent in the first quarter of 2014.
The areas with the lowest industrial vacancy rates currently are Los Angeles and Orange County, Calif., each with a vacancy rate of 3.6 percent; Miami, 5.6 percent; and Seattle at 6.0 percent.
Annual industrial rents are projected to rise 2.3 percent this year and 2.6 percent in 2014, after increasing 1.7 percent last year. Net absorption of industrial space nationally is likely to total 121.8 million square feet in 2013 and 103.5 million next year.
Retail Markets
Retail vacancy rates are forecast to slide from 10.7 percent in the first quarter of the year to 10.4 percent in the first quarter of 2014.
Presently, markets with the lowest retail vacancy rates include San Francisco, 3.5 percent; Fairfield County, Conn., at 4.2 percent; and Orange County, Calif., 5.2 percent.
Average retail rents will probably rise 1.5 percent in 2013 and 2.1 percent next year, following a 0.8 percent gain in 2012. Net absorption of retail space is seen at 11.9 million square feet in 2013 and 16.4 million next year.
Multifamily Markets
The apartment rental market – multifamily housing – should see vacancy rates ease from 4.0 percent in the first quarter to 3.9 percent in the first quarter of 2014; vacancy rates below 5 percent generally are considered a landlord’s market with demand justifying higher rents.
Areas with the lowest multifamily vacancy rates currently are New Haven, Conn., at 2.0 percent; New York City, 2.1 percent; and Minneapolis and Syracuse, N.Y., each at 2.5 percent.
Average apartment rents are expected to increase 4.6 percent this year and 4.7 percent in 2014, after rising 4.1 percent in 2012. Multifamily net absorption is projected at 270,600 units in 2013 and 253,200 next year.
The Commercial Real Estate Outlook is published by the NAR Research Division. NAR’s Commercial Division, formed in 1990, provides targeted products and services to meet the needs of the commercial market and constituency within NAR.
The NAR commercial community includes commercial members; commercial real estate boards; commercial committees, subcommittees and forums; and the NAR commercial affiliate organizations – CCIM Institute, Institute of Real Estate Management, Realtors® Land Institute, Society of Industrial and Office Realtors®, and Counselors of Real Estate.
Approximately 78,000 NAR and institute affiliate members specialize in commercial brokerage and related services, and an additional 232,000 members offer commercial real estate services as a secondary business.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries. For additional commentary and consumer information, visit www.houselogic.com and http://retradio.com.
1Additional analyses will be posted under Economists’ Outlook in the Research blog section of Realtor.org in coming days at: http://economistsoutlook.blogs.realtor.org/.
2Beginning in the third quarter of 2011, NAR commercial forecasts have been generated based on historical data provided by REIS, Inc., and do not correspond with prior historical information from previous forecasts. This source permits coverage of more metro areas than were previously covered.
The next commercial real estate forecast and quarterly market report will be released on May 28 at 10:00 a.m. EDT.
Information about NAR is available at www.realtor.org. This and other news releases are posted in the “News, Blogs and Videos” tab on the website. Other commercial information and reports are posted in the Commercial Research area of the “Research and Statistics” tab.
Warehousing demand foreshadows more ’shovels in the ground’
Jan 24th
Stu Kingma, SIOR
From the Grand Rapids Business Journal
Before Robert Grooters revealed his plan to build more than a million square feet of new industrial space this year — some of which will be used for storage — Stu Kingma told the Business Journal the warehousing segment of the market will need more space soon.
Kingma, an associate broker with NAI Wisinski of West Michigan, also called Grooters an iconic figure in that conversation for how much space he built roughly two decades ago — and credited him for being the catalyst for developing a majority of the warehousing square footage that is still in use.
Since then, some manufacturing buildings have been converted to storage space. Kingma estimated roughly 25 million square feet is devoted to warehousing today. Those square feet represent about a quarter of the total square footage in the entire industrial real estate market, which, up to recently, has been too much.
“For the last half-dozen years or so, it’s been an excess of space in terms of its capacity,” Kingma said. “A lot of the manufacturing operators — as they went through the recession and as a consequence of that recession — their sales downsized, as did their requirement for space.
“So we had manufacturers throughout the boom years expand outside their four walls and acquire warehousing space on the outside to be able to keep up with their sales demand,” he said. “But once that sales demand slacked, they had less of a need for it and, in many cases, retrenched back into their plants and set aside a component of that space for warehousing.
“So for the past four or five years, there has been an oversupply of warehouse space,” Kingma said.
Kingma feels there still is a surplus of storage space, but not nearly to the degree of just a few years ago. He said companies looking for warehouse space today can still find some, although their choices will be limited based on how much space they need and where they want that space to be.
“The sector near the airport has tightened up substantially,” he said. “There is space left, but not anywhere near the amount of square footage there was 18 months ago.”
Kingma said the southwest sector of the market has also tightened up, and, right now, he is doing deals for storage space on the northwest side.
“Those will take a good part of that inventory and put it back into use,” he said. “And it’s local manufacturers that are re-acquiring space — either on a direct basis or through a third-party logistics company that manages their outbound and inbound supply chain and distribution function.”
That demand has lifted real leasing rates, not the asking variety, by 15 percent over the last year and a half.
Kingma feels if the current space-consumption trend continues, more warehousing space will be needed down the road.
“I believe that’s going to be the case,” Kingma said. “I think the spaces we do have available today will continue to be absorbed, and, at some point, it’s going to be such that the choices won’t be there.”
If nearly all of today’s available space is leased or bought and the market is, for all practical purposes, filled in the near future, it won’t be the first time that has happened here.
“We had that problem six or eight years ago where we had demand for space that we simply couldn’t fill and that prompted some build to suits to take place,” he said. “We’re not there yet, though, for two reasons.”
First, Kingma said there are still opportunities to find vacant space today, although not as many as 18 months ago. Second, construction costs are still very high in relation to what someone can pay for existing space today.
“But that’s starting to narrow, especially on the sales side, and, eventually, it’s going to have to be shovels in the ground to satisfy the demand,” Kingma said. “We’re not there yet, but we’re light years closer than we were 18 months ago.”
Gilson Graphics Inks Deal for 164,000 SF
Oct 16th
Print and Fulfillment Firm Renews Lease in Grand Rapids
October 9, 2012
Gilson Graphics, a graphics design, print and fulfillment firm, signed a 30-year lease renewal for the entire property at 2000 Oak Industrial Drive in Grand Rapids, MI. Its clients include Meijer retail stores, GM Manufacturing and Dawn Foods.
The 164,348-square-foot industrial building was constructed in 2004, and Gilson Graphics has occupied the industrial space since 2010, according to CoStar information.
Jeff Klaasen of Kwekel Cos. represented the landlord, NL Ventures VI Oak LLC. Chad Versluis of NAI Wisinski represented the tenant.
The 164,348-square-foot industrial building was constructed in 2004, and Gilson Graphics has occupied the industrial space since 2010, according to CoStar information.
Jeff Klaasen of Kwekel Cos. represented the landlord, NL Ventures VI Oak LLC. Chad Versluis of NAI Wisinski represented the tenant.
Warehouse Space has Grown, Albeit Slowly
Oct 10th
From the Grand Rapids Business Journal
Written by David Czurak
October 8, 2012
Of the roughly 94 million square feet of industrial space in the metro market, the amount dedicated to warehousing and distribution has varied over the years, ranging from 30 percent to 50 percent of the total square footage. The main driver of that fluctuation is how active manufacturing firms are at the time.
When local manufacturers expand, the distribution share can diminish. When manufacturing jobs are lost or outsourced, or when whole companies move or cease to operate, the distribution share can grow.
The warehousing portion has grown the past few years — albeit slowly, but grown nonetheless.
“We’ve seen a significant portion of manufacturing space converted to warehousing over the years,” said Stu Kingma, a veteran associate broker with NAI Wisinski of West Michigan who specializes in the industrial market. “In particular, a couple of sites come to mind.”
Kingma named Avistar Park, formerly the massive Lear plant on Alpine Avenue in Walker, as one that still has a fair amount of manufacturing going on but also offers plenty of warehousing space. Another he identified was the old Steelcase manufacturing site on the south side of Grand Rapids that Ashley Capital purchased several years ago.
“A portion of it remained manufacturing, but there’s also significant aspects of it that now are used specifically for warehousing and distribution,” he said.
Kingma said another former Steelcase plant, on Broadmoor Avenue, is now a mix of production and warehousing. He also pointed to the former Bosch plant on 44th Street purchased by X-Rite. There is still manufacturing going on there, but some distributors have set up shop in the site’s back building.
Kingma also noted that the former Life Savers candy plant in Holland is now largely dedicated to warehousing since the firm moved its operation to Canada a few years ago to cash in on a lower cost for sugar.
“(Distribution space) has ranged anywhere from 30 to 50 percent of the marketplace. I think it’s a combination of all of those factors,” he said.
“Now that we’ve seen an increase in manufacturing in the country, in the state and specifically in West Michigan, we are now at a point where we are low on inventory in manufacturing space — good, solid manufacturing buildings,” he added.
“We do have available space yet, however, in the distribution arena, in buildings that were built for distribution and not for manufacturing, with the primary difference being in the infrastructure … how much power it has, how much capacity the floor loading has and things of that nature.”
Kingma said the recent surge in manufacturing locally has dragged warehousing along with it. He added that the lion’s share of the distributing-space increase has come from third-party logistical firms that manage a manufacturer’s inventory and its inbound and outbound supply chain.
“Those are the groups that we’ve seen absorbing the warehousing and distribution space,” he said. Kingma named Supply Chain Solutions, Columbian Logistics and Elston-Richards as some of the third-party companies active in the local market.
As for the most active warehousing areas, Kingma said space in the southeast sector near the airport is almost filled.
“There is not a lot of choice left,” he said. Across the county, though, the northwest sector has some available space.
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NAI Wisinski of West Michigan Welcomes Newest Agent: Bradley Hartwell, II
Sep 19th
Grand Rapids, MI (September 19, 2012)
NAI Wisinski of West Michigan welcomes Bradley Hartwell, II as our newest Service Provider. He will be specializing in investment sales. Bradley brings with him five years of experience in commercial banking, property management and investment analysis. Previously, Bradley worked in Macatawa Bank’s commercial lending department as a Commercial Credit Analyst. He then worked for Friedman Integrated Real Estate Solutions in Farmington Hills, MI where he managed the financial reporting, tenant relations, and physical maintenance of a portfolio consisting of 1.5 million square feet of office, industrial, & retail space.
Bradley has a business degree from Central Michigan University where he majored in Corporate Finance and Real Estate Development. During his time there he worked with GRL Properties where his work led to the acquisition of $3.5 million of industrial investment property.
Commercial Real Estate Recovering at a Slower Pace
Aug 28th
Reported August 27th, 2012 by the National Association of Realtors.
Positive underlying fundamentals continue to support all of the major commercial real estate sectors, but a slowdown in job creation and ongoing tight loan availability has tempered growth in some areas, according to the National Association of Realtors® quarterly commercial real estate forecast.
Lawrence Yun, NAR chief economist, said there are mixed results among the commercial sectors. “Job creation in the second quarter was about half of what we saw in the first quarter, which is moderating demand in the office sector,” he said. “Industrial and warehouse space is holding on better because imports and exports have advanced. While exports to Europe generally are down, trade has been robust with India, China and other Asian nations, along with Brazil, Mexico and our strongest trading partner – Canada.”
Although still positive, dampened demand is slightly moderating rent growth with the exception of the multifamily market. “Sharply higher demand for apartments is causing rents to rise at faster rates,” Yun said. “A return to normal household formation will mean even lower vacancy rates and higher rents in the future.”
The current commercial real estate cycle has been driven by shifts in demand without an oversupply of new construction. “The difficulty small businesses have in getting commercial real estate loans for leasing or purchase is keeping a lid on demand,” Yun explained. “Multifamily is the only commercial sector with a notable growth in new space, with some lending provided through government loans.”
With the exception of multifamily, vacancy rates remain above historic averages seen since 1999. Over that time frame the typical vacancy rate has been 14.4 percent for the office market, 10.1 percent in industrial, 8.1 percent for retail and 5.8 percent in multifamily.
Vacancy rates are marginally declining and rents are modestly rising in all of the sectors, but significant changes in the outlook are unlikely before the end of the year. Many corporate decisions on spending and job hiring are on hold given uncertainty over the upcoming elections, whether Congress will effectively avoid a “fiscal cliff,” and unsettled issues such as health care and banking/financial regulations.
“Overall companies hold plentiful cash reserves, but they are hesitant to hire without clarity over how these outstanding issues will impact the bottom line,” Yun said.
“Commercial real estate gains could be thwarted if lending from small and community banks dry up from excessive regulatory compliance costs, and if international big-bank capital rules are applied to smaller lending institutions,” Yun added.
NAR’s latest Commercial Real Estate Outlook1 offers projections for four major commercial sectors and analyzes quarterly data in the office, industrial, retail and multifamily markets. Historic data for metro areas were provided by REIS, Inc.,2 a source of commercial real estate performance information.
Office Markets
Vacancy rates in the office sector are expected to fall from an estimated 16.1 percent in the third quarter to 15.6 percent in the third quarter of 2013.
The markets with the lowest office vacancy rates presently are Washington, D.C., with a vacancy rate of 9.4 percent; New York City, at 10.0 percent; and New Orleans, 12.8 percent.
Office rent is projected to increase 2.0 percent this year and 2.6 percent in 2013. Net absorption of office space in the U.S., which includes the leasing of new space coming on the market as well as space in existing properties, should be 24.1 million square feet in 2012 and 47.8 million next year.
Industrial Markets
Industrial vacancy rates are forecast to decline from 10.7 percent in the third quarter of this year to 10.5 percent in the third quarter of 2013.
The areas with the lowest industrial vacancy rates currently are Orange County, Calif., with a vacancy rate of 4.6 percent; Los Angeles, 4.8 percent; and Miami at 6.8 percent.
Annual industrial rent is likely to rise 1.7 percent in 2012 and 2.4 percent next year. Net absorption of industrial space nationally is seen at 59.8 million square feet this year and 67.2 million in 2013.
Retail Markets
Retail vacancy rates are projected to decline from 10.9 percent in the third quarter to 10.7 percent in the third quarter of 2013.
Presently, markets with the lowest retail vacancy rates include San Francisco, 3.8 percent; Fairfield County, Conn., 3.9 percent; and Long Island, N.Y., and Orange County, Calif., both at 5.3 percent.
Average retail rent is forecast to rise 0.8 percent this year and 1.3 percent in 2013. Net absorption of retail space should be 10.3 million square feet this year and 20.1 million in 2013.
Multifamily Markets
The apartment rental market – multifamily housing – is expected to see vacancy rates drop from 4.3 percent in the third quarter to 4.2 percent in the third quarter of 2013; vacancy rates below 5 percent generally are considered a landlord’s market with demand justifying higher rents.
Areas with the lowest multifamily vacancy rates currently are Portland, Ore., at 2.0 percent; New York City and Minneapolis, both at 2.2 percent; and New Haven, Conn., and San Jose, Calif., both at 2.4 percent.
Average apartment rent is likely to increase 4.1 percent in 2012 and another 4.4 percent next year. Multifamily net absorption should be 219,300 units this year and 236,600 in 2013.
The Commercial Real Estate Outlook is published by the NAR Research Division for the commercial community. NAR’s Commercial Division, formed in 1990, provides targeted products and services to meet the needs of the commercial market and constituency within NAR.
The NAR commercial components include commercial members; commercial committees, subcommittees and forums; commercial real estate boards and structures; and the NAR commercial affiliate organizations – CCIM Institute, Institute of Real Estate Management, Realtors® Land Institute, Society of Industrial and Office Realtors®, and Counselors of Real Estate.
Approximately 78,000 NAR and institute affiliate members specialize in commercial brokerage and related services, and an additional 232,000 members offer commercial real estate services as a secondary business.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.
News & Views: May 7, 2012
May 7th
By: Jim Decker
Our ten person industrial team held its weekly meeting the other day. We are all sensing a gradual and steady rise in demand and price for this sector of our market place. In fact we are experiencing some difficulties in finding buildings for some of our clients. In particular there is a short supply of nice, clean, modern (high ceilings, loading docks, drive-in doors, good condition), 15,000 SF and above buildings. We are encouraged by the gradual increase in pricing. Dave Smies closed transactions for his clients this week on two buildings that fall into the aforementioned category, one on Walkent NW, and the other on Oak Industrial Drive. Current pricing on comparable buildings is in the $28 to $32 per square foot range.
After a really stagnant three year period we are also starting to sell some vacant industrial zoned land. Several of our clients are in process of constructing new facilities. It’s nice to have our optimism based on reality!
CARWM: First Quarter Sold Report
Apr 17th
FIRST QUARTER SOLD REPORT RELEASED
Commercial real estate in West Michigan is continuing to show increased activity and growth, according to recently released first quarter closed sales statistics reported to the Commercial Alliance of REALTORS®.
The number of commercial sale transactions reported for the first quarter of 2012 has increased 23.8% compared to the first quarter of 2011. Retail and office transactions reveal a large increase in activity, with increases of 45.8% and 40% compared to 2011. The industrial sector, which showed huge growth in 2011, reported two fewer transactions in the first quarter of 2012, than in 2011.
Overall commercial real estate sales volume correlates directly with the slow down in the industrial sector. While office sales soared with a 109% increase over 2011, and retail showed steady growth at 7.2%, sales volume for industrial properties declined by 63.9%.
The slow down in the industrial sector is not necessarily indicative of a lack of demand for industrial property. “The industrial sector is experiencing something that hasn’t been seen for several years – the need for new construction of manufacturing and warehouse space. The current inventory of larger footprint industrial space is extremely limited, ” stated 2012 CAR President Mary Anne Wisinski-Rosely, of NAI Wisinski West Michigan. “The office and retail sectors increases in both the number of transactions and volume demonstrates the strength and viability of doing business in West Michigan.”
COMPARATIVE ACTIVITY REPORT – CLOSED SALES |
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| First Quarter 2011/ First Quarter 2012 | |||||
| NOTE: This report reflects closed sales reported to Commercial Alliance of REALTORS from the West Michigan area, particularly Kent, Ottawa, Muskegon, Allegan and Kalamazoo Counties. This report does not include leasing activity. |
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| Property Type | Number of Transactions 2011 | Number of Transactions 2012 | % Change | ||
| Industrial | 24 | 22 | -8.3% | ||
| Retail | 24 | 35 | 45.8% | ||
| Office | 15 | 21 | 40.0% | ||
| TOTAL | 63 | 78 | 23.8% | ||
| Property Type | Real Estate Sold 2011 | Real Estate Sold 2012 | % Change | ||
| Industrial | $16,508,901.00 | $5,952,744.00 | -63.9% | ||
| Retail | $7,396,680.00 | $7,930,550.00 | 7.2% | ||
| Office | $3,910,650.00 | $8,172,500.00 | 109.0% | ||
| TOTAL | $27,816,231.00 | $22,055,794.00 | -20.7% | ||
