Research & Forecast Report
COLUMBUS | INDUSTRIAL
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The Columbus industrial market started the year on a positive note, recording 2,060,165 square feet of net absorption. In 10 of the past 11 quarters, the region has experienced absorption greater than 1 million square feet - a true testament to strong leasing activity, investment and development. This positive absorption drove vacancy down to 4.55 percent, which is over 30 basis points lower than a year ago. Overall asking rates remained stable at $3.44 per square foot, with rates for warehouses at $3.23 per square foot. General industrial properties saw the largest incline to $3.67 per square foot. The first quarter demonstrated growing demand from e-commerce companies and logistics providers, as Hormel Foods Corporation, Hims Inc., Hyperlogistics Group and FNS Inc. collectively leased over 1 million square feet around Central Ohio. These industries will continue to drive activity in Columbus, due to the area’s large influx of first-class industrial development. Construction activity remains solid with more than 8 million square feet of product currently underway - a majority of which is expected to reach completion throughout 2020.
The vacancy rate decreased slightly from 4.61 percent to 4.55 percent this quarter, as the market posted positive net absorption. The Licking submarket saw the largest vacancy decrease to 3.7 percent, as Hims leased space at the new Northeast 302 warehouse. The Madison submarket saw the most significant increase in vacancy to 6.17 percent, as a large speculative project completed, adding vacancy to the area.
MARKET ACTIVITY >>
Market activity is often correlated to positive or negative absorption. However, in cases when a tenant leaves one space for another, the positive and negative absorption cancels out. The Market Activity Volume (MAV), which is the absolute sum of absorption change in the market, gives a better idea of overall activity. This quarter, the MAV was 4.8 million square feet – a strong indication that tenants are continuing to stay active in the market.
CONSTRUCTION ACTIVITY >>
Construction activity remains high in the first quarter, as 25 projects are underway around the region. There is currently more than 8 million square feet under construction, which is nearly 5 million square feet more than in the first quarter of last year. The Licking, Madison and Southeast submarkets lead construction activity, each with over 800,000 square feet of speculative or build-to-suit product underway. Two properties totaling 2,032,010 square feet reached completion this quarter in the Madison submarket. Medline’s 1,200,000-square foot build-to-suit warehouse was finalized. The speculative property at 1020 Enterprise Pkwy. was also completed in West Jefferson, adding 832,010 square feet of available space to the market. With 50+ projects comprising of over 20 million square feet either planned or underway, Central Ohio can expect more large completions throughout the year.
SALES ACTIVITY >>
In the first quarter of the year, 15 industrial properties totaling 2.7 million square feet sold around Central Ohio for a total sales volume of $95 million. The average price per square foot reached $46. Exeter Property Group purchased a portfolio of two warehouses on Heritage Drive from Prologis for a total of $51.7 million, or $50 per square foot - the largest sale of the quarter. Southern Glazer’s Wine-Spirits bought 4800-4850 Poth Road for $16 million. 427 and 457 N. Cleveland Ave. sold to Kelley Companies for a total of $8.15 million.