INDUSTRIAL SECTOR
Eugene-Springfield has experienced a downturn in demand for industrial property Q1, Q2 and Q3 of 2009. Lease rates are also down by15 to 20% on triple net leases (A lease where the lessee pays the rent, as well as taxes, insurance, and maintenance of the building). The overall leasing market for 2009 could be classified as a “Tenant Market” with the tenant being able to negotiate some great TIs (tenant improvements) and other concessions if they would sign a three year lease term or longer. The inventory absorption level was stagnate with no new industrial development during 2009.
The first quarter of 2010 is looking much brighter. The activity in the market appears to be picking up as we have noticed a significant increase in inquiries for available space for new users.
West Side:
The West Eugene Industrial Sector has seen a noticeable increase of available inventory in the area. With many tenants downsizing since Q2 of 2007 it has left smaller spaces available. Statistics show that there is no new industrial development being built for speculation in Q2 of 2010 which shows that demand is leveling off. With 30,000 cars per day and other services in the area, the West 11th corridor is a highly sought after area.
Whitaker:
This mixed use area is becoming quite the “Arts Orientated” area in Eugene.
It is one of the only areas in Eugene where they allow the mixed use between industrial and retail use. Lots of the local artisans prefer this area due to its proximity to the downtown, 5th Street Market area and the Saturday Market area. This has great parks nearby as well as only being blocks from the Downtown core.
Chad Street/Gateway area.
During the economic downturn, the demand for industrial property in this area has remained very high. Most of the demand is caused by the new “Regional Hospital” that was built at River Bend and being situated right next to I-5 for freeway access. There are some plans on the drawing board for new development in this sector for the second quarter of 2010. Long term this should be a very high demand area. Unlike some industrial areas, you can find a lot of places to eat on your lunch hour in this area of town as well as other factors like fuel, easy access to major freeways, and access to other suppliers.
Springfield:
This area has held up quite well during the recession with fewer vacancies than other parts of Lane County. Leasing rates have held up well and the demand to be in Springfield is still strong. There have been some good buying opportunities to purchase small industrial buildings in Springfield. I recently brokered a transaction that was a “Deferred Maintenance” building with a lot of issues. The buyer chose a building that needed work so they could be involved with the remodel process and have a finished product that fit their use. Some buyers are much more comfortable hiring the contractors of their choice to insure the work has been done properly instead of by a seller that is simply not going to spend the money to do it right.
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