Research & Forecast Report
COLUMBUS | INDUSTRIAL
The first quarter of 2018 was strong for the Columbus Industrial market, with a total of 1,568,932 square feet positively absorbed. This is the fifth consecutive quarter of positive absorption, which has caused the vacancy rate to drop to 3.91 percent from 4.16 percent last quarter. Leasing activity continues to surge in the market, as more than 2 million square feet has been leased in 2018 so far. Columbus saw a $0.05 increase in overall asking rates this quarter from $3.51 per square foot last quarter to $3.56 per square foot. Warehouse distribution and general industrial property rates also increased to $3.18 per square foot and $3.79 per square foot, respectively. Logistics and e-commerce companies remain the major forces on the Columbus industrial market, showing interest in prime industrial space. Growing demand has had a positive effect on construction in the area, as over 4.2 million square feet of industrial space is currently under construction. Speculative development represents 2.62 million square feet of this total, further signifying the rising attraction of Columbus as an industrial hub. Increasing career opportunities and the necessity for skilled workers have led to a low unemployment rate in Central Ohio. The current Columbus unemployment rate sits at 4.0 percent, which is lower than the national unemployment rate of 4.1 percent. Economists forecast continued success for Columbus as investors and companies look to participate in this developing logistics epicenter.
There was a decline in the Columbus industrial market’s vacancy rate, dropping to 3.91 percent– the lowest vacancy has been in twenty years. Since the first quarter of 2017 the vacancy rate has dropped more than 150 basis points– a true sign of the market’s strength. The East and Licking submarkets saw the largest decrease in vacancy, as both rates dropped by an entire percent from last quarter. The Union submarket posted the biggest increase to 1.79 percent due to Marcy Industries vacating their former building.
NET ABSORPTION >>
The Columbus market saw another quarter of positive absorption, recording 1,568,932 square feet absorbed. The largest occupancy gains took place in the Southeast and West submarkets due to robust leasing activity this quarter. Southeast experienced 338,070 square feet of positive absorption while West posted 401,139 square feet absorbed– up 544,906 square feet from last quarter.
CONSTRUCTION ACTIVITY >>
There is high demand for industrial space around Central Ohio, so construction activity continues to experience a boom. The Columbus industrial market has 4.2 million square feet of construction in the pipeline, with 2.62 million of speculative projects and 1.58 million of build-to-suits. Similar to last quarter, the biggest developments are in the Pickaway and Southeast submarkets with 1.4 million
square feet and 2 million square feet under construction, respectively. Three construction projects totaling 283,750 square feet completed in the Columbus market this quarter. The completions include Pizzuti’s 229,056 warehouse at 3555 Gantz Road, the 40,000-square foot America’s Floor Source expansion at 2360 Citygate Drive, and Heath Newark Licking County Port Authority’s 20,000-square-foot property at 704 International Drive. With multiple construction projects currently planned, proposed or under construction, Columbus can anticipate high construction and completion numbers over the next few years.
SALES ACTIVITY >>
A combined ten buildings totaling 2,106,963 square feet sold this quarter. The total sales volume reached $102,657,116 or an average price per square foot of $51, higher than last quarter. The largest deal that occurred is Cabot’s purchase of 1661 Rail Court for $31,876,416, or $47 per square foot. Zeller Realty Corp bought 6840 Pontius Road from DRA Advisors for $31,600,000. Meritex Enterprises sold a warehouse at 2425 Spiegel Drive to Exeter for $8,536,400.