Research & Forecast Report
COLUMBUS | OFFICE
For the first time in four quarters, the Columbus office market saw positive net absorption, posting 304,180 square feet positively absorbed. This also translates to positive year-to-date net absorption of 253,522 square feet, signaling the market’s recovery after experiencing a lowpoint in the real estate cycle. Overall asking rates held steady from last quarter, decreasing slightly by $0.01 to $18.75 per square foot. Class B and C properties saw the largest increase in asking rates, both rising more than $0.10 to $17.65 and $15.05 per square foot, respectively. Kiplinger Forecast predicts that, due to increased spending and business investment, GDP will rise 2.9 percent throughout the rest of the year– up from 2.3 percent in 2017.
Consumers are projected to up their spending by more than 3 percent in 2018, as the economy continues to boom. On a local scale, Columbus has shown significant strength, with the unemployment rate dropping from 4.0 percent to 3.5 percent this quarter. Central Ohio continues to attract investors, large firms and professionals to the area due to its job opportunities, ongoing development and strategic location.
The vacancy rate increased slightly to 9.39 percent this quarter, which can be
attritbuted to added build-to-suit inventory and a few large move outs. This rate is
expected to decline in coming months, as leasing activity picks up and the office
market recovers from a lowpoint. The Arlington/Grandview submarket saw a notable
vacancy decrease due to two tenants leasing space at Grandview Yard. The Polaris
submarket posted the largest jump in vacancy due to Huntington vacating space at
550 Polaris Parkway.
NET ABSORPTION >>
This quarter Columbus saw 304,180 square feet positively absorbed after nearly a
year of negative absorption. Large gains occurred in the Westerville and Worthington
submarkets. Big Lots occupied their new 333,000-square-foot building at 4900 E.
Dublin Granville Road, Farmers Insurance expanded their space at 2500 Farmers
Drive and MarketLab Research moved in at 7634 Crosswoods Drive.
CONSTRUCTION ACTIVITY >>
Construction numbers remain strong as demand for new, innovative office space
grows. There is 1,006,157 square feet of development under construction, with over
half of that currently underway in the CBD. When completed, 80 on the Commons at
80 E. Rich St. will boast 134,000 square feet of office space and 711 N. High St. will offer 90,000 square feet. The new Big Lots HQ recently completed for 333,000 square feet, and was the only completion in the Columbus market this quarter. Eight projects are projected to reach completion throughout the rest of 2018, including the mixed-use development at 900 N. High St.
SALES ACTIVITY >>
Nine office buildings totaling 679,368 square feet sold this quarter for a total sales volume of $54 million, or an average of $90 per square foot. This year’s total sales volume of $122 million has already overtaken last year’s, due to a huge boom in
investor spending that will continue to increase. The largest sale of the quarter was ValStone Partners’ purchase of 21 E. State St. for $23 million. 2400 and 2500 Farmers Drive sold to IMC Real Estate for a total of $22.2 million and 229,269 square feet. Robert Weiler Co. sold the Havens Corner Portfolio in Gahanna for $3.1 million, or $185 per square foot. Alterra Real Estate Advisors invested in the 46,566-square-foot building at 4051 W. Dublin Granville Road for $2.3 million.