Amazon completes fulfillment centers

The U.S. economy failed to take off with yet another quarter of slower than anticipated domestic production. The industrial real estate market, however, has become a breath of fresh air. The industry continues to drive occupier demand and redefine itself through the scope of e-commerce and advances in logistics–a trend in which Central
Ohio has followed suit. This quarter–with the help of Amazon, who completed two fulfillment centers in the region– Central Ohio posted 2.9 million square feet of net absorption, and pushed down the overall vacancy rate to 5.7 percent–a 57 basis point reduction from the same quarter last year. Consumer preferences toward click-to-knock delivery methods have proved beneficial for modern bulk warehouses, especially near metropolitan areas and distribution hubs. In Columbus, this type of space is leasing fast. Major deals this quarter include Mars Petcare
who expanded into 227,633 additional square feet at 5303 Fisher Road, and Spartan Logistics who signed a 218,471-square-foot lease at 4150 Lockbourne Industrial Parkway.

Strong absorption numbers and low vacancy rates have stimulated new development in the region. In fact, Central Ohio now boasts 4.5 million square feet of total construction in the pipeline–1.3 million of which are
speculative projects in search of tenants. Amazon cut the ribbon on two new fulfillment centers totaling 1,871,116 square feet: one in Etna Township and the other at the Rickenbacker Global Logistics Park.

Key Takeaways
> 4,471,933 square feet of industrial space is now under construction in Central Ohio. 3,121,869 are build-to-suit developments, while 1,350,064 square feet remains speculative.
> The overall asking rental rate saw little change from last quarter. However, flex/R&D property types posted a 5.5 percent increase to $6.26 per square foot.
> Positive net absorption pushed down the overall vacancy rate to 5.7 percent– the Q2 2016 vacancy rate was 6.1 percent.