Demand remains strong in the CBD as vacancy continued its slow decline over the start of the year, falling to 12.9 percent, while outpacing the suburban market by over 2.0 percent.
1. CBD vacancy outpaces suburbs at start of the year
Demand remains strong in the CBD as vacancy continued its slow decline over
the start of the year, falling to 12.9 percent, while outpacing the suburban market
by over 2.0 percent. Meanwhile, the suburbs saw a slowdown in activity, posting
roughly 50,000 square feet of negative absorption. Continued interest in the CBD
is also evidenced by the increasing number of construction projects as of late.
Columbia Gas recently moved into its newly-constructed, 286,000-square-foot
headquarters in the Arena District, development continues on the market’s
largest project currently under construction at 250 S. High, while an additional,
newly announced project at the Columbus Commons will add roughly 125,000
square feet of Class A office space in the downtown area.
CBD vs. suburban vacancy
Source: JLL Research
Rental rate growth on the horizon
Average direct asking rents in the Columbus market continue to stabilize amid
slowly declining vacancy rates. The average Class A direct asking rent in the
CBD currently stands at $19.23 per square foot, while the average Class A direct
asking rent in the suburbs is $19.68 per square foot, a difference of $0.45 per
square foot, or 2.3 percent. As demand continues to grow, particularly in
conjunction with the delivery of competitive, modern space, incremental rental
rate growth will be soon to follow. A number of projects currently under
construction will provide tenants with high-class, contemporary options and
breathe life into an aging product inventory.
Average direct asking rent by submarket cluster (p.s.f)
Source: JLL Research
Columbus fosters business development
Columbus continue to attract a number of new business, both domestically and
internationally, as well as expand existing ones thanks to its highly competitive
business environment and well-educatedpopulation, among other factors.
Currently, there are 38 expansion projects and 86 attraction projects active in the
Columbus region. Active expansion projects are comprised of 87.0 percent
domestic businesses and 13.0 percent international businesses, while active
attraction projects are comprised of 45.0 percent domestic businesses and 55.0
percent international businesses.
Current expansion and attraction projects by sector
Source: JLL Research
14.4%
Total vacancy
-53,468
Q4 2014 net absorption (s.f.)
-1.1%
12-month rent growth
484,000
Total under construction (s.f.)
38.2%
Total preleased
Office Insight
Columbus | Q1 2015
Construction to breathe life into aging inventory
$16.65
$17.11
$17.40
$17.93
$16.00 $16.50 $17.00 $17.50 $18.00 $18.50
Northeast
North
CBD
Northwest
16.5%
15.2% 15.0%
16.0%
14.0%
12.9%
19.4%
17.7% 18.6%
15.5%
14.4%
15.1%
12.0%
14.0%
16.0%
18.0%
20.0%
22.0%
2010 2011 2012 2013 2014 Q1 2015
CBD vacancy Suburban vacancy
0
10
20
30
40
Manufacturing Logistics HQ & Business
Services
Science and
Technology
Expansion projects Attraction projects