Growing Population Lures in Retail Tenants
Coming off a strong previous quarter, the Columbus retail market continues to make positive strides. During the third quarter, the retail market posted 379,695 square feet of absorption, bringing the total for 2016 to over 1 million square feet. The Northwest submarket reported the largest gains this quarter with 169,819 square feet of net absorption. Strong leasing activity in the region has created tight market conditions for tenants, and reduced the overall vacancy rate to 5.4 percent. Asking rental rates remained consistent across all property types.
Neighborhood centers, power centers and anchored strips experienced a slight decrease, while big box and community centers saw a rise in rental rates. The overall asking rent now stands at $11.49 per square foot –a 3 percent increase compared to the third quarter of 2015. Community centers posted the greatest increase this quarter, rising to $12.05 per square foot, while neighborhood retail saw the largest reduction to $11.21 per square foot -falling by roughly 2 percent. Developers completed 347,700 square feet of new retail space during the third quarter, bringing the total for the year to 868,200 square feet. The largest project this quarter came from Costco who completed a 150,000-sqaure-foot big box store in Jerome Township. Projects still in the construction phase include IKEA’s new store near Polaris, Phase One of Dublin’s Bridge Park development and Linworth Crossing –a 42,050-square-foot strip center in Worthington.
> The overall vacancy rate fell 40 basis points to 5.4 percent over the third quarter. Vacancy rates have been falling since 2009.
> Approximately, 1,022,634 square feet of retail projects are under construction. Big box stores and community centers make the majority of these projects.
> The Northwest market, which includes Dublin, Worthington, and Upper Arlington, saw the most gains this quarter with 169,819 square feet of net absorption.