Leasing Activity Strong to Start 2016
The Central Ohio industrial market continues to push growth even as limited space restricts tenant expansion opportunities. During the first quarter of 2016, the region posted 1,445,902 square feet of net absorption, or the net change in occupied square feet, which helped decrease the overall vacancy rate 30 points to 6.1 percent.
Net absorption fell nine percent compared to the same quarter last year, however, indicators including strong employment growth and new construction in the pipeline, suggest net absorption will increase through 2016.
The evolving world of supply chain management has helped induce a healthy demand for quality warehouse and distribution product in the region, and space is leasing quickly. Major deals this quarter include
Kenco Group who leased 229,146 square feet at Rickenbacker 8 (6201 Green Point Drive) and CEVA Logistics who leased 156,641 square feet at 2626 Port Road. Several completed warehouse projects also drove up absorption numbers. German chemical firm BASF occupied a new 421,200-square-foot distribution center at 9565 Logistics Court in Pickaway County, and Inno-Pak will occupy 253,838 square feet at the newly completed Duke Realty building at 9224 Intermodal Court. Tightening market conditions have provided an opportunity for developers and distribution firms to add supply to the region. Central Ohio now has 3.9 million square feet in the pipeline, an increase of
over 2.1 million compared to the same quarter last year. Amazon is the major mover of this needle. The distribution giant expects to deliver two fulfillment centers in Central Ohio in 2016: an 855,000-square-foot
facility at the Etna Township Park and a massive 1 million-square-foot facility at the Rickenbacker Global Logistics Park in Obetz.
> 3,940,205 square feet are currently under construction for industrial space. 2,773,000 square feet are build-to-suit developments, while 1,167,254 square feet are speculative developments.
> Asking rents across all industrial property types showed little movement from Q4 2015. Warehouse/distribution rental rate slightly increased to $3.00 per square foot. The overall weighted rental rate now stands at $3.36 per square foot.
> Duke Realty completed a 482,300-square-foot speculative distribution center at 9224 Intermodal Court. Inno-Pak leased 253,838 square feet at the site; the rest will remain speculative space.