Commercial Real Estate News Brief: August 2015

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In the latest edition of our monthly news brief, JLL’s regional team curates the top industry articles to keep you in-the-know. In this month’s edition, JLL spotlights the latest technology trends in real estate, emerging biotech markets, and the booming intermodal industry in Columbus, Ohio.

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The Tech Industry Drives CRE Revenue, Innovation

According to JLL’s CEO of Markets, John Gates, “Technological advances in the commercial real estate (CRE) sector have accelerated exponentially in the last few years impacting tenants, investors and brokers alike.” In his recent contribution to National Real Estate Investor (NREI), Gates outlined how the CRE industry has embraced technology in the following ways:

  1. Tech companies are growing and expanding. Tech companies made up 20.8% of U.S. leasing activity in the past year—and have left a major footprint on CRE market conditions. With declining office space in cities previously known to be tech hubs, new tech hotspots are surfacing across the country.
  1. CRE companies are adapting to technology. The industry itself is seeing an influx of new tools and platforms. According to Gates, “… even the most ‘old school’ real estate professionals are realizing how critical technology is to every phase of the real estate lifecycle.” CRE trends to watch include commercial drones, augmented and virtual reality programs, and experience-enhancing mobile applications for investors and tenants.

JLL is a leader in the commercial real estate tech space. In recent years, JLL has introduced new technologies to its tenant and investors including Blackbird, HiRise and Red.

Biotech and Life Science Industries Target New Markets

While cities like Boston and San Francisco are still at the heart of the biotech and life science industries, “clusters in emerging areas are poised to rapidly gain shares,” according to Forbes. And, competition is rising in secondary markets, thanks to more affordable rent and available resources.

Specific biotech industries driving growth include medical devices, biosimilars and drugs for rare conditions. Generic drugs specifically are projected to, “make leaps in global market share due to international focus on cost controls,” according to JLL’s fourth annual Life Science Outlook Report.

Markets across the globe are welcoming biotech entrants with lower business costs, tax exemptions and other incentives, in regions including Turkey, China and Mexico, among others. Check out JLL’s global clusters to watch below.

JLL Science Outlook Report

For more on biopharma’s growing influence on the U.S. and international markets, download the JLL Life Science Outlook Report.  

Columbus Ranked Among Top 5 Mid-Country Intermodal Markets

With a booming e-commerce market, intermodal growth is up in the Midwest.

As consumers increasingly shop online, retailers are under pressure to meet higher expectations and demands, including next-day delivery. The solution? Businesses are constructing and developing intermodal facilities in key markets easily accessible to the rest of the nation.

In a recent article, NREI listed its the top five mid-country intermodal markets. Not surprisingly, Columbus, Ohio made the list.

Columbus’ strong industrial market can largely be attributed to the Rickenbacker Intermodal Terminal, which features 28 million square feet of industrial development and holds a U.S. Foreign Trade Zone designation. What’s more, the terminal is seeking federal funding for a $34 million expansion that would, “increase the lift capacity to 300,000 annually,” according to NREI. 

As supply chains continue to tighten across the globe, the commercial real estate industry can expect to see intermodal hubs pop up across the U.S. in the years ahead. 

News Wrap-Up in Our Region  

Cincinnati

  • NYC investor, Apollo Global Management LLC, purchased six properties from Duke Realty Corp. in Cincinnati. Transactions totaled more than $103 million. The purchase included Deerfield Crossing in Warren County, three class A Blue Ash buildings, and Lake Forest Place, among others.
  • Home furnishings retailer Wayfair Inc., is building an 898,560-square-foot facility near the Cincinnati/Northern Kentucky International Airport at 1600 Donaldson Road. 

Columbus

  • Duke Realty Corp. is ready to sell its remaining office properties in Central Ohio; it plans to sell Sept. 24 via an online auction. This sale will finalize Duke’s “26-year stretch as an office-development leader in the region.”
  • After selling its distribution center near Rickenbacker International Airport for $18.6 million, Hyperlogistics Group Inc. signed a 12-year lease and two, five-year options for the center. The company emphasized its decision was prompted by Columbus’ strong industrial market.

Cleveland

  • Quest Medical Imaging plans to move its Akron location to a new downtown headquarters at 38. E. Market St., and will create 16 new jobs this year. The company recently received approval from the FDA for its fluorescent medical imaging technology.
  • Akron based FirstEnergy Corp. started demolition activity on its 6800 S. Marginal Road power plant on Cleveland’s Lake Shore after the plant was deactivated earlier this year. The project will take 18 months; large-scale demolition will begin in 2016.

Detroit

  • Dan Gilbert purchased Book Tower, Book Building and a nearby community center, which adds another 517,000 square feet to his downtown portfolio. The buildings will be revitalized as mixed-use properties to, “bring jobs, energy and new life” to the area.
  • Moroun Universal Truckload Services will open a new 500,000-square-foot logistics center on Detroit’s east side. The center will be built at the I-94 Industrial Park and is expected to bring 150 new jobs to the region.

Pittsburgh

  • Downtown Pittsburgh’s third-largest office building, One Oxford Centre, is on the market. Oxford Development Co. is seeking out opportunities for the 45-story building, “at a time when there’s been strong investor interest” in Pittsburgh.
  • Pittsburgh-based Oberg Industries Inc. broke ground on an 80,000-square-foot expansion to its Sarver campus. With 40 job openings available, the company plans to expand for future growth and to improve its product development offerings.

Keep up with trends and relevant commercial real estate news throughout the Midwest on Twitter at @JLL_Spaces!

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