Office Market Records its 20th Consecutive Quarter of Growth
The office market cooled off during the first quarter after posting astrong close to 2016. Waves of young, entrepreneurial tenants haveput pressure on the market to meet new demands, such as expansionopportunities and access to amenities. Central Ohio posted 27,707square feet of positive net absorption this quarter- a significant decline from the 457,482 square feet posted last quarter. The vacancy rate saw an uptick to 8.5 percent, which was lower than the same quarter last year at 8.6 percent. The Columbus office market records its 20th consecutive quarter of positive growth; a testament to a healthy economy.
Average asking rates increased across all property types during the first quarter. The average overall rate stands at $18.55- a 1.3 percent increase from last quarter. Class A properties saw the largest increase from $20.68 to $20.84, while Class B rates remained consistent at $17.38. Asking rental rates are projected to fluctuate this year, as traditional leasing activity and office space competes with technological improvements and creative office space designs. High-quality, mixed-use space is a growing trend in Columbus. Over 1.2 million square feet of construction is in the pipeline, and more than half of the projects are mixed-use developments that will include office, retail/restaurant, and residential space. This quarter, Columbus posted 224,784 square feet of completions, which is credited to a portion of Bridge Park Street in Dublin and Buggyworks in the Arena District.
Projects still under construction include Grandview Yard in Grandview, The Pointe at Polaris, Two25 Commons, and the remainder of Bridge Park Phase One in Dublin.
> Average asking rental rates increased across all property types, further proving the demand for space. The overall asking rate increased 1.3 percent from the previous quarter to $20.84
> Vacancy rates experienced a significant increase to 8.5 percent the first time rates have seen an increase in six years
> Class A properties enjoyed the most gains during the first quarter with 195,210 square feet of net absorption