Market Snapshot: 2014 – Cincinnati’s Shining Year for Industrial Market
- Jan 27, 2015
By Adrian Maties, Associate Editor
2014 has been a great year for the Greater Cincinnati Industrial Market. According to CBRE’s most recent report, the region has registered its fifth consecutive year of positive net absorption, industrial vacancy has dropped to the second lowest level in a decade, and sale prices and demand from investors are all on the rise.
Thanks to major deals such as the opening of eBay’s new 630,000-square-foot distribution center in Boone County, the Greater Cincinnati area saw 4.1 million square feet of positive net absorption in 2014. In Q4, the area registered more than 1.7 million square feet of gross absorption and 740,810 square feet of net absorption. Leasing activity remains strong and its effect can be seen on the region’s vacancy, which reached 5.3 percent in the last quarter of the year. It was 6.0 percent at the start of 2014.
Average rents in the region remained steady in the last quarter of 2014, reaching $3.48 per square foot. This is a slight decrease from $3.55 per square foot in Q3. Greater Cincinnati’s industrial vacancy was also 0.2 percent lower in Q3 than in Q4. Northern Kentucky has the highest asking rents, $4.05 per square foot, because of the scarce supply. The area’s vacancy was 2.8 percent in Q4.
The lack of new construction since 2009 has played an important role in the Greater Cincinnati industrial market’ overall recovery and expansion. However, the region witnessed over 2.2 million square feet of new development last year. The amount is still well below pre-recession levels. Between 2005 and 2008, Greater Cincinnati saw an average of about 5 million square feet of new construction each year. Although developers looking to build speculative buildings have encountered many difficulties (such as topographical challenges, lack of infrastructure, and already developed industrial parks) over the last year, CBRE expects to see a continued increase in new construction projects in the area.
Charts courtesy of CBRE.