Research & Forecast Report
COLUMBUS | OFFICE
In the third quarter, the Columbus office market experienced a second consecutive quarter of positive net absorption, recording 148,800 square feet. Nationwide vacated 315,000 square feet of space at 5525 Parkcenter Circle for their new 152,455-square-foot property at Grandview Yard, but other large move-ins drove absorption positive. Due to high leasing activity, the vacancy rate declined two basis points to 9.37 percent, down from 9.39 percent last quarter. Overall asking rates also saw positive change in the third quarter, as they slightly increased from $18.75 per square foot
to $18.77 per square foot. These rates are $0.17 higher than they were in the third quarter of 2017, demonstrating the growing strength of the office sector. According to Kiplinger Forecast, Columbus can anticipate GDP growth over the next 12 months and 2.0 percent job growth in 2019– up from 1.4 percent in 2018. As the economy experiences a boom, consumer spending increased by 3 percent this year and will hold steady into the new year.
On a local scale, the unemployment rate in Columbus rose to 4.1 percent, up from 3.5 percent mid-year due to a slight shortage in job opportunity. However, this rate is expected to decline in coming months as Central Ohio continues to attract investors and large firms with its emphasis on development, high quality of life and educated population.
Due to positive net absorption this quarter, the Columbus vacancy rate declined from 9.39 percent to 9.37 percent. The largest increase occurred in the Dublin submarket, as Nationwide vacated their 315,000-square-foot office space at 5525 Parkcenter Circle, driving the vacancy rate to 12.47 percent. The New Albany submarket saw the largest decrease in vacancy to 5.28 percent, with Homeside Financial occupying 41,018 square feet at 7775 Walton Pkwy.
NET ABSORPTION >>
Columbus posted 148,800 square feet of positive absorption this quarter. Compared to last quarter, the Dublin and Polaris submarkets experienced the most significant changes in absorption. After negative absorption last quarter, Polaris finished the third quarter strong with 51,965 square feet positively absorbed, due to Anthem Inc. moving into the Pointe at Polaris and Veeam Software expanding at 8800 Lyra Drive. Dublin recorded 267,194 square feet of negative absorption due to Nationwide moving out to consolidate into their offices in Grandview.
CONSTRUCTION ACTIVITY >>
As demand for new, high-tech office space continues to rise, construction numbers in Columbus remain strong. There is currently nearly 1.1 million square feet of development underway throughout the city, with nearly three quarters of that occurring in the CBD. The highly anticipated mixed-use project at 711 N. High St. will complete in the fourth quarter and offer 90,000 square feet of Class A office space. There were three completions this quarter, totaling 258,711 square feet. Nationwide’s 152,455-square foot building at Grandview Yard completed, and their employees have moved in. 900 N. High St. added 45,000 square feet of office space in the Short North, while the Dispatch building boasts 61,256 square feet of newly renovated space on Capitol Square. Six projects are expected to reach completion throughout the rest of 2018.
SALES ACTIVITY >>
In the third quarter, nine office buildings totaling 734,688 square feet sold in Central Ohio for a total sales volume of $100 million, or $121 per square foot. This sales volume nearly doubles last quarter’s of $54 million, demonstrating the increasing strength of the market. Cantor Fitzgerald Investors purchased 3075 Loyalty Circle from Georgetown Company for $47 million, making it the largest sale of the quarter. 8415 and 8425 Pulsar Pl. at Polaris sold for $17.7 million to Tempus Management. Davidson Kempner bought 500 Olde Worthington Road from Lexington Realty for $15.4 million, or $159 per square foot.
2018 Q3 Office Trends Report Columbus Colliers
Author: Hannah Williams
Date Published: 10/03/2018