Following a Robust 2016, Columbus Market Cools Off

As consumer spending, GDP, and trade relationships fluctuate, the industrial market experienced a similar cycle. Coming off a recordbreaking year of absorption, Central Ohio saw a temporary slowdown in leasing activity at the close of the first quarter, posting 529,844 square feet of negative net absorption. The vacancy rate, however, decreased 60 basis points year-over-year to 5.5 percent–proving the market remains tight. According to The Colliers International National Industrial Report, Columbus prevails as a top emerging market because of the flexibility, location, and growing economy it has to offer.

Flex space enjoyed the largest increase in average asking rents to $6.54– a 2.2 percent increase from last quarter. Warehouse distribution rates remained stable for the third consecutive quarter, while general industrial properties saw a slight uptick to $3.59. The overall asking rate slightly fell this quarter to $3.33. Columbus currently has over 3.2 million square feet of construction in the pipeline, and 2.3 million of that are build-to-suit projects. At the close of the first quarter, the industrial market recorded 531,483 square feet of completed projects, including a 264,000-square-foot speculative warehouse at 8820 Smith’s Mill Road in Licking County. The largest project under construction is Sofidel’s 1,950,000-squarefoot development to be completed in 2018.

Key Takeaways
> After posting record-breaking absorption last quarter, industrial leasing activity cooled off posting negative net absorption of 529,844 square feet.
> The overall vacancy rate is 5.5 percent– a 60 basis point decrease from the same quarter of last year at 6.1 percent.
> Industrial flex space posted the largest occupancy gains this quarter with 91,234 square feet occupied, while the North submarket also saw the largest gain with 82,231 square feet absorbed.