The Columbus industrial market posted a robust quarter of growth and activity bringing absorption for the quarter to over 1.8 million square feet. This positive growth pushed the vacancy rate down seven basis points to 4.86 percent. This quarter the metro city posted nearly 3 million square feet in leasing activity, further proving the market remains hot. Overall asking rates also saw the positive effect of a strong market, posting a 2 percent increase to $3.43 per square foot. General industrial properties recorded a $0.13 increase to $3.85 per square foot. The e-commerce trend continues as the driving force of demand across the industrial market. The Balance reports that job growth will occur in the professional and technical occupations, as technology, design, and innovation are key drivers in e-commerce. The shift to online sales has implemented a high demand for warehouse space. The need to be in an accessible location with a strong economy makes Columbus a prime target. The increase in construction starts is a direct result from demand for specific types of space. Speculative projects soared this quarter with 2.9 million square feet in the pipline. Looking forward, the Columbus industry can expect to see high demand for speculative space and growing activity due to technological innovation, the e-commerce drive, and upcoming marijuana industry.
The Columbus metro experienced a sharp decrease in vacancy to 4.86 percent – a 13 percent decrease from 5.5 percent last quarter. The Southeast submarket posted the largest decrease in vacancy from 9.21 percent to 6.72 percent. Strong leasing activity in warehouse properties and a landlord driven market pushed vacancy rates down.
NET ABSORPTION >>
The industrial market recorded the strongest quarter of 2017 with 1,869,600 square feet of positive net absorption. Absorption increased by almost 2 million square feet compared to the previous quarter, bringing the year-to-date absorption to 1.1 million square feet. The Southeast submarket experienced the largest occupancy gains with
1,947,741 square feet of positive net absorption – a complete turnaround from the negative 571,000 square feet the previous quarter.
CONSTRUCTION ACTIVITY >>
The Columbus construction scene is booming. There is currently over 4.5 million square feet of projects in the construction pipeline – with 2.2 million square footage of build-to-suit projects and 2,921,710 square footage of speculative projects. Pickaway County leads the way with 2.4 million square feet under construction to be completed by-year-end, including Sofidel’s 1.4 million-square-foot property. Columbus recorded two completions this quarter totaling 514,031 square feet. The two projects included Becknell’s 322,000 square-foot warehouse at 3265 SouthPark
Place in the Southwest submarket, and Duke’s RGLP Gateway 192,031 square-foot warehouse in the Southeast submarket. High construction numbers point to the continued demand for industrial space in the Columbus metro.
SALES ACTIVITY >>
During the third quarter, 13 properties totaling over 3.6 million square feet were sold with a total sales volume of $112,293,346, or an average price of $42.00 per square foot according to Real Capital Analytics. The largest sale this quarter was completed by SE Columbus SM-1, who purchased 5303-5305 Fisher Rd for $27,062,700, or $58.32 per square foot. IC Industrial Sideco acquired a five-property portfolio from Lightning Propco for $25.9 million,
and G&I IX Anchor Hock purchased a 1.2 million-square-foot warehouse at 2893 W Fair Ave. for $23 million.