The Industrial Market Closes the Year Strong

The U.S. economy experienced slower than anticipated growth during the second half of 2016, but the industrial real estate market saw a positive light. E-commerce continues to be the lead driver for industrial real estate nationwide, and Columbus is following suit. At the close of the fourth quarter, Columbus posted over 3.9 million square feet of net absorption, a 32 percent increase from the previous quarter. The vacancy rate decreased 100 basis points from 2015 to 5.4 percent. The overall health of the industrial market for Columbus continues to
strengthen as the total absorption for the year nearly doubled from last quarter, bringing the overall absorption for 2016 to 8,760,860 square feet.

Distribution centers continue to be the preference for the Columbus market, as these centers have posted the highest absorption throughout the entire year. Treehouse Foods leased a 717,717-square-foot warehouse at 3099 Rohr Road, and Staples leased 340,704 square feet of warehouse space at 3125 Lewis Centre Way. Amazon occupies two
of its distribution centers in the region, contributing to high absorption in distribution centers this year.
Demand has stimulated new development across Columbus. Currently,Columbus has over 2.3 million square feet of construction in the pipeline, and 1 million of which are speculative projects. Columbus posted over 2.4 million square feet of completions in the fourth quarter, including a 567,000-square-foot speculative warehouse at 3219 Rohr Road and Westward Pharmaceutical’s 275,869-square-foot build to suit at 2130 Rohr Road.

Key Takeaways
> This quarter asking rents increased across all property types. The overall asking rent increased from $3.25 last quarter to $3.34 this quarter. R&D/Flex properties saw another significant increase to $6.40- a 3.5 percent increase from the fourth quarter of 2015.
> 8,760,860 square feet of absorption occupied in 2016- a record for absorption since our data dates back to 2003.
> Approximately 2.3 million square feet remains under construction- 1,086,064 square feet of speculative space and
1,036,869 square feet of build to suit projects.