The Columbus Office market recorded yet another quarter of positive net absorption at 259,820 square feet, marking the region’s 21st consecutive quarter of growth. Even with strong absorption, the overall vacancy rate remains at 8.4 percent, largely due to big companies like Fifth Third and Citi Funds downsizing in office space. The market is able to grow at a positive rate due to the increased investment sale activity and new supply that offset
the losses. The overall average rental rates for office properties in Columbus increased to $18.61. Class A properties saw an eight percent increase this quarter to $20.92. With high demand, landlords are able to increase rental rates to create a more competitive market. Looking to the future, economists predict continued growth due to the addition of 222,000 jobs across the U.S. in June. The Columbus unemployment rate stands at 3.8 percent,
well below the national average at 4.4 percent. Professional and business services make up 18.4 percent of the Columbus market place. A jump in employment in the education and healthcare sectors has increased opportunities for the city, as well as the high success rate for start-up companies. The interest in Columbus will continue as the city recently moved to the second largest city in the Midwest and Columbus population topped 2.1 million.
The overall vacancy rate this quarter stands at 8.4 percent – no change from last quarter. The Dublin submarket experienced the largest decrease in vacancy, dropping three percentage points to 10.4 percent. Due to Citi Funds downsizing, Easton’s vacancy rate rose to 9.3 percent.
NET ABSORPTION >>
Columbus recorded 311,933 square feet of positive net absorption at the close of the second quarter, bringing year to date absorption to 338,391 square feet. Leasing activity decreased slightly as the market began to level out. Dublin saw the largest occupancy gain with 283,172 square feet absorbed. The Worthington submarket recorded the largest jump in vacancy this quarter, mostly due to Abbott Nutrition vacating at 6480 Busch Blvd – posting negative 156,273 square feet.
CONSTRUCTION ACTIVITY >>
There is 910,245 square feet of projects under construction in the Columbus market. Mixed-use developments have dominated the construction landscape throughout the city. Of the twelve projects in the pipeline, six are mixed use developments. The CBD has the highest amount of construction in the pipeline with 705,000 square feet.
Looking at a few major deliveries for the quarter, Alliance Data took occupancy of their third 240,000-square-foot office building at 3100 Easton Square Drive and Dublin’s Bridge Park project recorded 94,210 square feet completed, with only 69,790 square feet remaining. Overall, Columbus added 359,922 square feet of new office space.
SALES ACTIVITY >>
This quarter 11 office buildings totaling over 1 million square feet sold, bringing the total sales volume to $123,185,000, with an average price per square foot of $103.80. Sales investment activity for the Columbus market increased 0.8 percent this quarter according to Real Capital Analytics. A few notable deals that took place this quarter include KAMCO Investment’s purchase of 2900 Easton Square Place from The Georgetown Company for $58.3
million and Golden Gate Capital acquisition of 8111 Smith’s Mill Rd from Bob Evans for $24 million. Dublin City schools purchased an 118,500-square-foot building at 5175 Emerald Parkway for $9.4 million.