BUSINESS

Industrial space getting hard to find

Bowdeya Tweh

btweh@enquirer.com

Improvement in industrial real estate activity helped lift commercial real estate out of the doldrums in the market of the Great Recession.

But Colliers Ohio research director Brian Graham says vacancy rates in this segment are continuing to fall as the economic activity strengthens around the country.

The vacancy rate for industrial properties in Greater Cincinnati has fallen to nearly 5.8 percent in the third quarter of 2014, down 90 basis points from the second quarter, Graham said. Bulk industrial space near the Cincinnati/Northern Kentucky International Airport has a vacancy rate at less than 1 percent.

In the three-month period ended Sept. 30, companies made deals to secure about 2.2 million square feet of industrial real estate in the region, according to Colliers Ohio.

"That's huge," Graham added. "We haven't seen that in a long time."

Graham said demand for industrial space is hot especially in Northern Kentucky, but there's a dearth of new industrial or warehouse spaces built in the last decade. Developers are slowly moving bringing those types of properties to the market.

"There's a lack of product," Graham said. "The demand's out there. There's an opportunity and developers are starting to build it. If you build a spec(ulative) product that's 500,000 to 600,000 square feet, there's a good chance, it'll get leased."

Demand for custom-built facilities is on the rise too. Earlier this year, automotive supplier UGN Inc. raised the amount of space it would occupy in a new building being developed at the 440-acre Park North industrial park in Monroe. The company signed a lease in July to occupy 232,000 square feet of space in a new building, which is 13 percent higher than what was announced in March.

Here's a list from Colliers Ohio on the top industrial real estate leases signed between July and September:

• The eBay division eBay Enterprise occupied 631,448 square feet of space at an IDI Gazeley Park South building in Boone County.

• E-commerce site operator Cornerstone Services expanded into the balance of an IDI Gazeley Park North building totaling 300,757 square feet. It already occupied 350,758 square feet of space at Park North.

• Industrial manufacturer Monti Inc. acquired 207,840 square feet at 4510 Reading Road in *Paddock Hills. Monti moved its corporate headquarters and Ohio manufacturing operations from Carthage and will occupy about 300,000 square feet at the facility.

• Specialty drug manufacturer Forest Pharmaceuticals occupied a 190,000 square feet build-to-suit facility at 10901 Kenwood Road in Blue Ash.

• Food manufacturer Sugar Creek Packing Co. acquired 176,231 square feet at 4235 Thunderbird Lane in West Chester for occupancy. The company moved its headquarters to Butler County from Washington Court House.■

*NOTE: This story was corrected with the proper neighborhood for Monti's new facility.