The advantage those two areas have is the amount of buildable sites, as opposed to Northern Kentucky, where “there’s a lot of challenges with topography,” said David Lotterer, JLL vice president of Industrial | Supply Chain & Logistics Solutions.
“There’s still good demand down there around the airport, which a lot of it is driven by the new air cargo business that’s occurring down there with Amazon,” Lotterer said. “(However), the Northern Kentucky market’s going to continue to struggle to find buildable sites. It costs a lot more to get a big building out of the ground down there just because of the amount of site work you have to do to ready the site.”
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But for communities in the north of the market, especially those in northern Hamilton County, plus communities along the Interstate 75 Growth Corridor in Butler and Warren counties, the locations for growth are more plentiful, the land is flat and the ability to secure labor is “relatively strong,” he said.
“Everybody’s challenged on labor, and that’s going to continue to be a theme moving forward,” he said.
The massive growth happening in Butler County is “the continuation of an ongoing trend and one I think will continue into the new year,” Lotterer said.
While the Butler-Warren area is “roughly a third” of the entire Cincinnati market in volume, it constituted more than half of construction efforts in the region last year.
That trend is expected to be similar this year, at about 45 percent of the market, as a result of several larger projects constituting about 3.7 million square feet of construction in the works this year.
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“With the size of the buildings that are getting built today, one or two buildings can really play with the numbers,” he said.
That was apparent with the completion last year of two IDI projects in the Monroe/Middletown market, including the nearly 1.3 million-square-foot Amazon fulfillment center at 700 Gateway Drive in Monroe.
The Tri-County Market, which includes Fairfield and West Chester Twp., among other communities, saw five projects totaling 798,825 square feet completed in 2018.
This year, strong construction growth continues to be apparent. In the Monroe/Middletown area, which is projected to see at least 1.7 million square feet in industrial construction growth, including projects like Bed Bath & Beyond in Monroe, 75 Logistics Center by The Opus Group in Middletown (612,730 square feet).
In the Tri-County Market, more than 1.7 million square feet of space will be constructed, including approximately 1.2 million square feet of that for West Chester Trade Center I, II and III along Ohio 747 between Smith Road and Union Centre Boulevard in West Chester Twp.
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In Hamilton, a project by NorthPoint Development will bring a 287,428-square-foot facility to Symmes Road sometime in the second quarter.
After recording around 4.2 million square feet in positive absorption, 2018 became the third consecutive year surpassing 4 million square feet in occupancy gains, according to JLL.
With such positive momentum in the market, construction numbers remain at all-time highs despite nearly 2 million square feet delivering in the fourth quarter.
With construction numbers soaring to record highs and several developments in the pipeline, the market can expect new tenant requirements to continue to make their way to market, according to JLL.
Leasing velocity slowed in the fourth quarter, compared to quarters past with absorption reaching just above 760,000 square feet. The largest deal of the fourth quarter was Novolex’s 390,000-square-foot lease at the newly delivered Erlanger Commerce Park, followed by TSC Apparel’s 195,000-square-foot lease at the soon-to-be-delivered West Chester Trade Center II.
Facts & Figures
3.7 million: Square feet of industrial construction in the works in Butler and Warren counties this year
45 percent: Portion of Cincinnati region industrial development happening in Butler and Warren counties this year