COLUMBUS | INDUSTRIAL
The Columbus industrial market finished the year strong, posting 2,992,791 square feet of positive net absorption in the fourth quarter. This brings total year-to-date absorption to over 7.4 million square feet, which is 3 million square feet more than the 2017 total. This quarter also marks the sixth consecutive quarter of positive absorption above 1 million square feet, demonstrating the steady strength of the Columbus market. Vacancy significantly increased in the fourth quarter from 4.27 percent to 4.85 percent, as construction completions added large vacancies to the market. Overall asking rates slightly decreased to $3.52 per square foot, but rates for warehouse and distribution properties saw a $0.03 increase to $3.31 per square foot.
Logistics firms, e-commerce companies and “final mile” distributors continue to have the most influence on the industrial market, as their investment and interest in warehouse space remain high. Central Ohio recorded 3.7 million square feet of industrial product under construction, with more than 3 million square feet of completions this quarter. The Columbus unemployment rate slightly decreased from 4.1 percent to 3.7 percent due to job growth in the latter half of the year. Economists predict that in 2019 the area will continue to flourish as a logistics hub and can anticipate steady construction numbers, high leasing activity and a growing skilled workforce.
Vacancy experienced an increase this quarter, up 4.85 percent from 4.27 percent. Large completions such as Rickenbacker Central 759 at 6198 Green Pointe Drive S added 758,465 square feet of new vacancy to the market, driving the rate up. The Southeast submarket saw the largest increase to 7.81 percent, as Malouf vacated 1635 and 1695 Watkins Road. The most significant decrease occurred in the Union submarket with DLG International occupying space at 16725 Square Drive, lowering vacancy there to 1.62 percent.
NET ABSORPTION >>
The Columbus industrial market saw positive net absorption for the seventh consecutive quarter, recording 2,992,791 square feet absorbed. High leasing activity
and completed build-to-suit warehouses brought total year-to-date net absorption to
7,414,254 square feet. The Southeast submarket experienced the largest occupancy
gains this quarter, with Goodyear moving into their new 1.2 million-square-foot
CONSTRUCTION ACTIVITY >>
As demand for warehouse space remains high, construction numbers around the city continue to grow. Currently, there is 3.7 million square feet of industrial product
under construction and nearly 3 million square feet in the pipeline. Pickaway leads
construction, with 1.8 million square feet of development underway. There were six completed projects this quarter, totaling over 3.1 million square feet. Duke’s Goodyear and Amazon build-to-suit developments were both finalized, making them the two largest of the quarter. Rickenbacker Central 759 also completed, adding 758,465 square feet of speculative space to the Columbus market. With 20 projects either planned or underway, Central Ohio can expect more large completions in 2019.
SALES ACTIVITY >>
In the fourth quarter, 12 industrial properties totaling 3.8 million square feet sold in Columbus. The total sales volume increased to $112,073,049, with an average price
per square foot of $49. Sales volume was over $20 million higher this quarter than
last, demonstrating the increasing interest of investors in the Central Ohio industrial market. LCN Capital Partners purchased 6600 Alum Creek Drive from Eddie Bauer for $50 million, making it the largest deal of the quarter. Evergreen Industrial Properties sold a four-property portfolio to Westmount Realty Capital for $19.65 million, or $37 per square foot.