The Columbus industrial market experienced an increase in activity, leading to higher occupancy gains and lower vacancy rates. The overall vacancy rate has remained consistent around 5.5 percent over the last few quarters; however absorption numbers have fluctuated since the start of 2017. This quarter the market recorded over 2 million square feet in leasing activity – a 32 percent increase from the second quarter of 2016. Strong leasing activity points to a landlord driven market that has in turn increased rental rates. The overall rental rate across all property types rose this quarter to $3.36 per square foot. General industrial properties recorded the largest increase to $3.72, up 13 cents from last quarter. Opportunities for employment are drawing many people and businesses to the city. According to Columbus 2020, the Columbus unemployment rate stands at 3.8 percent, which is
lower than the state and national rates. Despite negative reports regarding U.S. manufacturing sector, 1,700 manufacturers that employ over 85,000 people in the Columbus region continues to have a positive impact on the local industrial market. Columbus’ location continues to be a unique attribute, along with easy access to trade hubs, a growing population, and a bustling economy. A few projects in the construction pipeline further highlight the growing opportunities in the manufacturing fields: Sofidel’s 1.4 million-square-foot plant set to deliver early 2018 and TradePort’s 1 million-square-foot warehouse at the end of the year. High construction numbers and an increase in demand are pushing the Columbus market to expand at a healthy rate.
The Columbus metro vacancy rate stands at 5.5 percent – six basis points lower from the same quarter of last year. Pickaway County saw the largest decrease in vacancy from 10.2 percent to 5.8 percent. Overall, the vacancy rate hasn’t fluctuated much, proving the supply has kept pace with the demand, and no significant changes in vacant square feet.
NET ABSORPTION >>
The Columbus industrial market recorded 97,296 square feet of positive net absorption this quarter. Year-to-date absorption remains negative at 354,209 due to the slow start, but absorption increased by over 400,000 square feet this quarter compared to last quarter. Licking County experienced the greatest occupancy gains with 214,327 square feet absorbed, and Pickaway County had a strong quarter recording 178,370 square feet absorbed – a complete turnaround compared to no absorption recorded last quarter.
CONSTRUCTION ACTIVITY >>
There are currently projects totaling over 4.7 million square feet under construction split between 1,815,000 SF of build-to-suit projects and 2,948,785 SF of speculative projects. Pickaway County has two projects over 1 million square feet in the pipeline, anticipated to be completed by-year-end. The only completion recorded this quarter was Precision Tower Products 80,000-square-foot building in North Delaware. Columbus anticipates a healthy and
growing market as construction numbers have continued to rise over the past several years.
SALES ACTIVITY >>
During the second quarter, 13 industrial properties totaling over 4.3 million square feet were sold with a total sales volume of $126.5 million, or $50 per square foot according to Real Capital Analytics. Exel Inc acquired 2450 Creekside Parkway from Pizzuti for $34,566,335 and then Exel Inc sold the same property to Sealy Creekside I for $39.8 million marking it as the largest sale by volume this quarter. Prologis sold its 1,011,600-square-foot
warehouse at 5330 Crosswinds Drive for $21,427,400 making it the largest sale by square footage.