Shallow Bay Industrial Design,

Development and Market Trends

Steven McCraney, SIOR, McCraney Property Company

Larry Armstrong, LEED AP, Ware Malcomb
Susan Bergdoll, Duke Realty
Bill Petsas, EastGroup Properties
Al Pontius Marcus & Millichap
Steven McCraney, SIOR
McCraney Property Company

President and CEO of McCraney Property

Company.
A self-made entrepreneur, he and his team have
developed more than 4 million square feet of
industrial/distribution and office-flex throughout
Florida. Additionally, he has developed and
operated 24 company-owned fuel properties within
Florida.
McCraney is a member of The Florida Council of
100, NAIOPs National Board of Directors and
Past President of NAIOP South Florida. He was
awarded Developer of the Year for Central Florida
in 2013 and 2014.
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Shallow Bay Industrial Design,
Development and Market Trends

Steven McCraney, SIOR, McCraney Property Company

Larry Armstrong, LEED AP, Ware Malcomb
Susan Bergdoll, Duke Realty
Bill Petsas, EastGroup Properties
Al Pontius Marcus & Millichap
Larry Armstrong
Ware Malcomb

CEO of Ware Malcomb, a leading national

design firm, providing planning, architectural,
interior design, branding and civil engineering
services to commercial real estate and
corporate clients throughout the world.
Established in 1972, the firm has 18 offices
throughout the United States and in Canada,
Panama and Mexico.
Susan Bergdoll
Duke Realty

As vice president of leasing and development for

the Chicago Industrial Group, Susan Bergdoll has
a significant role in marketing, developing and
leasing the companys expanding Chicago
industrial portfolio of more than 12.6 million square
feet.
Bergdoll joined Duke Realty in 1997 as part of the
marketing department. She moved into leasing in
1998 as part of the Indianapolis industrial group.
Bergdoll is a member of the NAIOP Chicago
Chapter (as a board member), CREW Chicago,
Association of Industrial Real Estate Brokers and
IWIRE Chicago (Advisory Board Member).
Bill Petsas
EastGroup Properties

Senior vice president of EastGroup

Properties, where he has responsibility for
development, acquisitions, dispositions and
oversight of all operations for the Western
Region.
Petsas has been with EastGroup since 2000.
Prior to joining EastGroup, he worked with
Prologis and Trammell Crow Company.
Al Pontius
Marcus & Millichap

Serves as senior vice president/national director

overseeing Marcus & Millichaps 16 specialty
divisions.
Began his career with the firm in 1985 as an agent
in the Palo Alto office, where he consistently
ranked among the top 25 sales associates. In
2016, Pontius was promoted to national director
with oversight of all specialty divisions.
He is actively involved with NAIOP, where as a key
senior executive, he is regularly called upon to
discuss national, regional and local commercial
real estate investment trends.
Defining Shallow Bay
Shallow Bay Characteristics:
AKA: Mid Bay, Light Industrial, Multi-Tenant Distribution & Business Distribution

140 to 200 Building Depth

50,000 to 125,000-SF Buildings
Multiple Entries for Leasing Flexibility
Target 5,000 to 50,000-SF Tenants
Clear Heights 24 to 30
Generally Front Park Rear Load
Predominantly Dock High Loading
Some Grade Level Access
Office Finish Averages 15% but Varies from 10% to 25%
Parking Ratio: Typically 2 per 1,000 SF
Attractive Storefront Design
Kyrene 202 Site Plan
Kyrene 202 - Aerial
Kyrene 202 Building II
Steele Creek Commerce Park
Steele Creek Commerce Park
ParkView Commerce Center 1
U.S. Small Bay Industrial Overview
U.S. Small Bay Industrial Overview
 Small Bay Industrial Absorption Outpacing Construction

Completions Net Absorption Vacancy Rate

Completions / Absorption (Mil. of SqFt)

60 14%

30 12%

Vacancy Rate
0 10%

-30 8%

-60 6%
08 09 10 11 12 13 14 15 16*
* Through 2Q; trailing 12-months through 2Q for completions and absorption
Includes warehouse and distribution facilities 150,000 sqft 300,000 sqft
Sources: Marcus & Millichap Research Services, CoStar Group, Inc.
 Small Bay Industrial Asking Rent Trends

Asking Rent Y-O-Y Percent Change

$4.4 10%
Average Asking Rent

Y-O-Y Percent Change

$4.2 5%

$4.0 0%

$3.8 -5%

$3.6 -10%
08 09 10 11 12 13 14 15 16*
* Through 2Q
Includes warehouse and distribution facilities 150,000 sqft 300,000 sqft
Sources: Marcus & Millichap Research Services, CoStar Group, Inc.
 Small Bay Industrial Vacancy Rates by Region

Northeast: 9.1%
West: 4.4%
Midwest: 7.9%

Mountain: 9.5%

Southeast: 8.4%

TX/OK: 7.9%
As of 2Q 2016
Includes warehouse and distribution facilities 150,000 sqft 300,000 sqft
Sources: Marcus & Millichap Research Services, CoStar Group, Inc.
 Small Bay Industrial Asking Rents by Region

Northeast: $4.67
West: $5.73 +6.6%
+6.7%
Midwest: $3.75
+2.5%
Mountain: $5.06
+10.0%

Southeast: $3.64
+5.8%
TX/OK: $3.94
+4.0%
As of 2Q 2016
Includes warehouse and distribution facilities 150,000 sqft 300,000 sqft
Sources: Marcus & Millichap Research Services, CoStar Group, Inc.
 Small Bay Industrial Price and Cap Rate Trends

Average Price Cap Rate

$60 12%
Average Price Per Square Foot

$45 9%

Average Cap Rate

$30 6%

$15 3%

$0 0%
00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16*
* Through 2Q
Includes warehouse and distribution facilities 150,000 sqft 300,000 sqft
Sources: Marcus & Millichap Research Services, CoStar Group, Inc.
 Small Bay Industrial Vacancy Trends by Vintage

20% 2007-2013 2014 2015 2016*

Average Vacancy Rate

15%

10%

5%

0%
Pre-1980 1980s 1990s 2000+
* Through 2Q
Includes warehouse and distribution facilities 150,000 sqft 300,000 sqft
Sources: Marcus & Millichap Research Services, CoStar Group, Inc.
 Small Bay Industrial Price Trends by Vintage

$100 2000-2013 2014 2015 2016*

Average Price Per Square Foot

$75

$50

$25

$0
* Through 2Q
Pre-1980 1980s 1990s 2000+
Includes warehouse and distribution facilities 150,000 sqft 300,000 sqft
Sources: Marcus & Millichap Research Services, CoStar Group, Inc.
Design
Spec Industrial
Building Trends
> 500,000 SF = 36 clear height or higher
36 clear height = 54-56 column spacing
70 Speed bays > 1,000,000 SF
7 Unreinforced slabs (previously 6)
Ductilcrete (proprietary concrete mix/placement)
LEED Ready (clerestory windows, TPO roof, LED lighting,
dual switching, water quality/bio swales)
Fire Protection ESFR 45 to deck = 40 max storage
Increased architectural articulation
130 truck maneuvering increased > 1,000,000 SF
More trailer storage
Sloped slabs 0.05% (SoCal only)
What does 36 or 40 Clear Get You? (with single select rack)
NO ADDITIONAL ONE ADDITIONAL NO ADDITIONAL NO ADDITIONAL
PALLET POSITION PALLET POSITION PALLET POSITION PALLET POSITION

56 Pallet 64 Pallet* 72 Pallet 84 Pallet

*Represents 50%+ of single select racking systems
Site Plan Shallow Bay
Industrial Buildings
Project Data
Site Area:
Gross: 24.18 AC (1,053,280 SF)
Street: (+/- 21,525 SF)
Net: 23.68 AC (+/- 1,031,755 SF)
Building Area: 472,300 SF
Retail: 8,400 SF
Industrial: 463,900 SF
F.A.R.: 0.46 (net)
Parking Required: 506 Stalls
Retail: 42 stalls @ 5/1000
Industrial: 464 stalls @ 1/1000
Parking Provided: 868 stalls
Retail: 42 stalls @ 5/1000
Industrial: 826 stalls @ 1.78/1000
Site Plan Shallow Bay
Industrial Buildings
Project Data
Site Area: 10.41 AC
Gross: 453,562 SF
Total Footprint: 206,750 SF
Mezzanine: 5% 10,200 SF
Total Building Area: 216,950 SF
FAR:
Gross: 0.48
Coverage:
Gross: 46%
Parking Provided
Auto: 339 Stalls @1.56/1000 SF
Req. Accessible 8 stalls
Truck Docks (Totals)
Dock-High Doors 21
Grade-Level Doors 8
Site Plan Shallow Bay
Industrial Buildings
Project Data
Site Area: 4.80 AC
Gross: 209,164 SF
Total Footprint: 65,664 SF
Gross Coverage: 31%
Trucks Docks (Totals)
Dock-High Doors 24
Grade-Level Doors 15
Alto Parking 117
58 @ 1.77/1000 SF | 59 @ 1.8/1,000 SF
Req. Accessible 6 stalls
Site Plan Shallow Bay
Industrial Buildings
Project Data
Site Area: 16.50 AC (718,760 SF)
Total Building Areas: 332,100 SF
F.A.R.: 0.46
Auto Parking Provided: 432 Stalls
217 @ 1/810 SF | 215 @ 1/727 SF
Dock Doors Provided: 108
Grade (drive-in) doors: 4
Leasing Shallow Bay
Paragon Road, Romeoville, IL
Paragon Road, Romeoville, IL
11501 West Irving Park Road, Chicago, IL
11501 West Irving Park Road, Chicago, IL
Pompano Commerce Center, Pompano Beach, FL
Pompano Commerce Center, Pompano Beach, FL