PRESENTED BY DAVID A. GLEASON, CCIM Broker Associate NAI Latter - PowerPoint PPT Presentation

2018 PRESENTED BY DAVID A. GLEASON, CCIM Broker Associate NAI Latter & Blum

MARKET SUMMARY Sale & Lease Rates are Pretty Boring. • Very Little Change from 2016 • • Everyone is Looking for “Great Deal” – Landlords Beware Sellers are Still Hanging Tough • 2017 Lafayette Parish Totals Sold – 29 transactions Leased – 59 transactions Statistics based on Louisiana Commercial Database data 2018

MARKET SUMMARY Industrial Market Activity 100 90 80 70 60 50 40 30 20 10 0 Months Inventory Active Listings New Listings Sold Listings 2018

HERE’S WHY… Average Prices of Oil Per Barrel SWEET CRUDE OIL BRENT CRUDE OIL 2015 2016 2017 2015 2016 2017 $52.36 $44.81 $53.32 $52.35 $43.55 $53.33 ***As of March 16, 2018, price per barrel = $61.19 2013 2014 2015 2016 2017 $3.74 MMBtu $4.37 MMBtu $2.63 MMBtu $2.52 MMBtu $3.00 MMBtu ***MMBtu = 1,000,000 British Thermal Unit 2018

OIL PRICES PER BARREL $130.00 $110.00 $90.00 $70.00 $50.00 $30.00 $10.00 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Dec-17 Mar-18 Brent Crude Oil Sweet Crude Oil Oil prices through March 28, 2018 2018

US vs. LOUISIANA RIG COUNT 1,862 US LA 1,761 978 875 511 $14.45 $14.45 108 111 78 61 47 2013 2014 2015 2016 2017 **The Louisiana Rig Count statistic represents the number of rigs operating in Louisiana. This number includes rigs in North Louisiana, South Louisiana Inland Waters, South Louisiana Inland, and Louisiana Offshore. The US Rig Count represents the number of rigs that are operating in the United States . Source: Lafayette Economic Development Authority 2018

COMMERCIAL BUILDING PERMITS # OF PERMITS ISSUED PERMITS ISSUED IN DOLLAR VALUE 66 65 63 47 39 $133M $103M 2013 2014 2015 2016 2017 $78M $72M 6 INDUSTRIAL PERMITS $59M ISSUED IN 2017 TOTALING $2,415,464 THIS ONLY REFLECTS 2013 2014 2015 2016 2017 LAFAYETTE PARISH 2018

BREAKING DOWN THE MARKET SMALL MEDIUM LARGE 3,000-5,999 SF 6,000-11,999 SF 12,000+ SF NEW EXISTING 1-10 YEARS 10+ YEARS 2018

AVERAGE LEASED RATES Small - 3,000 - 5,999 SF Average Annual Leased Prices Per Square Foot $8.50 $63.40 $8.06 $8.00 $7.91 $7.50 $7.00 $91.00 $6.61 $6.53 $6.50 $6.00 $5.50 $5.00 NEW EXISTING 2017 2016 2018

SMALL LEASES IN 2017 158 Industrial Pkwy 209 Marcon Drive April 2017 October 2017 5,000 SF - $6.72 PSF 5,724 SF - $8.39 PSF 202 Thruway Park Rd. 105 Park W Drive June 2017 May 2017 4,000 SF - $7.50 PSF 5,100 SF - $6.35 PSF 2018

AVERAGE LEASED RATES Medium - 6,000 - 11,999 SF Average Annual Leased Prices Per Square Foot $8.00 $8.00 $63.40 $7.60 $7.50 $7.00 $6.50 $91.00 $6.25 $6.00 $6.00 $5.50 $5.00 NEW EXISTING 2017 2016 2018

MEDIUM LEASES IN 2017 102 Savonne Road 237 Burgess Drive 3501 Hwy 90 East May 2017 May 2017 May 2017 7,000 SF - $4.97 PSF 11,660 SF - $6.69 PSF 6,400 SF - $9.38 PSF 528 La Flamme Rd. 1042 Forum Drive October 2017 May 2017 8,000 SF - $9.00 PSF 9,700 SF - $7.42 PSF 2018

AVERAGE LEASED RATES Large - 12,000+ SF Average Annual Leased Prices Per Square Foot $7.50 $7.24 $7.00 $63.40 $6.50 $6.00 $5.50 $5.44 $91.00 $5.00 $4.80 $4.50 $4.50 $4.00 $3.50 $3.00 NEW EXISTING 2017 2016 2018

LARGE LEASES IN 2017 906 Garber Road 1352 Petroleum October 2017 October 2017 12,000 SF - $8.00 PSF 12,000 SF - $6.50 PSF 119 Southpark Rd. October 2017 12,000 SF - $7.95 PSF 2018

AVERAGE LEASE RATES - OVERVIEW PRICE PER SQUARE FOOT $13 $ 12 $ 11 New $ 10 $ 9 $ 8 $8.00 Existing $8.00 $ 7 $7.60 $7.91 $7.24 $6.61 $ 6 $6.25 $6.50 $6.00 $5.44 $ 5 $4.80 $ 4 $4.50 $ 3 $ 2 $ 1 $ 0 2016 2017 2016 2016 2017 2017 Large Small Medium 2018

AVERAGE SOLD RATES Small - 3,000 - 5,999 SF Average Sold Prices Per Square Foot $100.00 $63.40 $91.00 $90.00 $82.18 $80.00 $70.00 $91.00 $63.40 $60.00 $50.00 $48.56 $40.00 $30.00 NEW EXISTING 2017 2016 2018

SMALL SALES IN 2017 119 Wall Street 101 N Pat Street 103A Balboa Drive October 2017 June 2017 March 2017 4,000 SF - $53.33 PSF 4,500 SF - $32.00 PSF 4,000 SF - $53.33 PSF 109 Jared Drive 113 Lions Club June 2017 February 2017 3,500 SF - $76.86 PSF 4,000 SF - $53.33 PSF 2018

AVERAGE SOLD RATES Medium - 6,000 - 11,999 SF Average Sold Prices Per Square Foot $100.00 $63.40 $90.16 $90.00 $80.00 $70.00 $91.00 $60.00 $51.52 $50.00 $49.40 $40.45 $40.00 $30.00 NEW EXISTING 2017 2016 2018

MEDIUM SALES IN 2017 3501 Hwy 90 East 111 Credit Drive February 2017 September 2017 6,994 SF - $45.04 PSF 8,700 SF - $51.72 PSF 3940 Verot School Road 1222 Wall Road October 2017 October 2017 11,000 SF - $63.64 PSF 6,100 SF - $90.16 PSF 2018

AVERAGE SOLD RATES Large – 12,000+ SF Average Sold Prices Per Square Foot $100.00 $63.40 $91.00 $90.00 $80.00 $75.23 $70.00 $91.00 $63.40 $60.00 $50.00 $40.00 $38.76 $30.00 NEW EXISTING 2017 2016 2018

LARGE SALES IN 2017 130 N Bernard Road 118 Nova Drive 3501 Hwy 90 East February 2017 September 2017 February 2017 16,000 SF - $53.13 PSF 35,313 SF - $48.14 PSF 31,544 SF - $50.72 PSF 1187 SE Evangeline Thruway 2720 W Willow Street May 2017 April 2017 32,000 SF - $59.38 PSF 12,960 SF - $75.23 PSF 2018

AVERAGE SOLD RATES - OVERVIEW PRICE PER SQUARE FOOT $130 $ 120 $ 110 New $ 100 $ 90 $91.00 $91.00 $90.16 $ 80 $82.18 Existing $ 70 $75.23 $ 60 $63.40 $63.40 $ 50 $51.52 $49.40 $48.56 $ 40 $40.45 $38.76 $ 30 $ 20 $ 10 $ 0 2016 2017 2016 2016 2017 2017 Large Small Medium 2018

Creative Transactions ➢ SWACO and Burner – Petroleum Pkwy ➢ Two buildings, TWO owners – One sublease ➢ 111 Nova ➢ 7 year tiered lease ➢ 33,000sf starting at $9,500/mth or $3.43/sf ➢ Petroleum Parkway Sale – Robert Minyard & Bart Broussard ➢ Zedi – Shenandoah Park ➢ Purchase two buildings and renovate ➢ Subleases – Lots of these happening in 2017 2018

➢ Texas Oil is booming! Fracking in Midland/Odessa. ➢ Offshore oil companies are coming up with solutions to compete with fracking. Good news for South Louisiana! ➢ Agents in our market are having a hard time explaining all of the Personal Injury Attorney billboards along our major corridors. (Ex. Trucking company) ➢ There is a feeling that Louisiana is NOT a business friendly environment. Major companies are concerned about opening their doors in our state. 2018

What’s Happening in the Marketplace? ➢ 2016 turned out to be a mirror image of 2015… ➢ Wow! We can say the same thing for 2017. ➢ Buyers and Tenants have a lot of options. We have more inventory than we’ve had in a very long time. ➢ I believe we are closer to 20% vacancy ➢ The best deals are still being found in leasing as opposed to buying . ➢ Very true for 2017 ➢ Ex: cryptocurrency, Medi Trans We are in a tenant-favorable environment and they are asking for ➢ the moon . ➢ And the stars in 2017 ➢ The phones are starting to ring asking for Industrial properties. ➢ True but we are getting land inquiries also 2018

This is how we all feel about the industrial market right now! 2018

Looking ahead to 2018… ➢ Oil Prices Remain Steady… Above $50 Per Barrel ➢ There is A Lot More Confidence in the Market Relative to the Near Future Than We’ve Heard in A Long Time ➢ Overall, the Industrial sector has become more diversified. Other industries are coming into the marketplace and absorbing industrial space. ➢ A factor that has prompted this change is aggressive lease rates. ➢ Acadiana now has a “ healthy ” supply of inventory. ➢ The buzz is that we should see some change in activity toward the 4 th quarter. 2018