Your SlideShare is downloading. ×
Q2 2012 | OFFICEGREATER COLUMBUS REGIONOFFICE TRENDS REPORT                                                               ...
RESEARCH & FORECAST REPORT | Q2 2012 | OFFICE | GREATER COLUMBUS REGION                                                   ...
RESEARCH & FORECAST REPORT | Q2 2012 | OFFICE | GREATER COLUMBUS REGIONUPDATE     Market ComparisonsOFFICE MARKET         ...
RESEARCH & FORECAST REPORT | Q2 2012 | OFFICE | GREATER COLUMBUS REGIONCENTRAL BUSINESS DISTRICT                          ...
Upcoming SlideShare
Loading in...5
×

Q2 2012 Columbus Office Market Trends

301

Published on

Published in: Real Estate, Sports
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
301
On Slideshare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
3
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Transcript of "Q2 2012 Columbus Office Market Trends"

  1. 1. Q2 2012 | OFFICEGREATER COLUMBUS REGIONOFFICE TRENDS REPORT More Activity but Little Gain COLUMBUS REGION OVERVIEW The Columbus region posted postive absorption of 32,000 square feet. The largest lease came from Residential Finance at 1 Easton Oval, who leased nearly 40,000 square feet of space. Vacancy increases in the Easton submarket are due to NetJets vacating 103,000 square feet for their move to a 140,000-square-foot, build-to-suit building at the airport. FORECASTS AND REFLECTIONSMARKET INDICATORS • Construction continues in New Albany on a • A Class A office and retail space in the Short 50,000 square foot office building, which is the North is set for construction in the third quarter. Q2 Q3 first phase of the 150,000 square feet planned. The offices at The Joseph, will be 130-unit 2012 2012* The construction of the FBI-anchored 425 hotel and office/retail, mixed-use space. West Nationwide Boulevard in the Arena • Construction continues on the parking garage, VACANCY District continues. The 51,000 square foot which is a part of the Columbia Gas-anchored, NET ABSORPTION building will have 6,000 square feet of 240 West Nationwide Blvd. There will be speculative space available when completed. roughly 35,000 square feet of space not leased CONSTRUCTION • Construction continues at 10 West Nationwide by Columbia Gas. The Columbia Gas lease at RENTAL RATES Blvd. a 200,000 square foot office building, 200 Civic Center Drive does not run out until which will house the current Nationwide 2014.m More parking will also be available *Projected trend for next quarter employees working at 5900 Parkwood Place in downtown due to the reconstruction of the Dublin when completed. parking garage at 425 North Front Street. ASKING RATES ANDRENTAL RATES ABSORPTION, COMPLETIONS, AND VACANCY RATES CONSTRUCTION 400,000 20.0% Asking rates have$21.00 18.0% steadily increased$20.00 300,000 throughout the past$19.00 16.0% year. Operating$18.00 200,000$17.00 14.0% expenses have seen$16.00 100,000 increases as well, which 12.0%$15.00 may be affecting asking$14.00 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 0 10.0% ratesThere are only 48 08 08 09 09 09 09 10 10 10 10 11 11 11 11 12 12 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 8.0% spaces available in Class A Rental Rates Class B (100,000) 08 08 09 09 09 09 10 10 10 10 11 11 11 11 12 12 Columbus larger than 6.0% 30,000 square feet; (200,000) 4.0% seven in the CBD and (300,000) 41 in the suburban 2.0% markets. The market will (400,000) 0.0% likely see continued Completions Absorption Vacancy Rate increases in asking rental rates, but notwww.colliers.com/columbus
  2. 2. RESEARCH & FORECAST REPORT | Q2 2012 | OFFICE | GREATER COLUMBUS REGION EMPLOYMENT DATA employment growth leads to leasing, so these Delaware are positive signs. County The preliminary unemployment rate for Columbus in May fell to 6.1 percent from 7.3 percent in Union County Powell Polaris Westerville January. The unemployment rate from January MARKET ACTIVITY Licking Dublin Worthington New County to May fell each month: 7.2 in February; 6.8 in Market interest increased during the second Albany Bethel North Central March; 6.4 in April; and finally, 6.1 in May. In May, quarter. Colliers International attempts to track demand for office space by tracking tenants in Hilliard Easton Gahanna/ Arlington/ Grandview CBD Airport Education and Health Services employment Madison East grew to 140,100 from 135,500 employees in the market. The average number of tenants in County Southwest January. This sector has been very strong this the market has increased slightly in second Southeast Fairfield yeae, averaging 7.28 percent higher employment quarter 2012 than in first quarter 2012, 73 to 76. County levels compared to the same time last year. However, there are fewer tenants seeking large Pickaway County spaces than last quarter. 14 tenants are looking Employment for Financial Activities hung for more than 25,000 square feet, and there areThe Columbus office market consists between 71,400 to 71,800 workers from January 23 tenants looking for 10,000 up to 25,000of 15 suburban submarkets plus the to May. Each month has been between 2.3 square feet of space.Central Business District submarket. The percent and 2.7 percent higher than FinanceColumbus region features a total of 63 Market Activity Volume is the sum of the absolutemillion square feet, 43.7 million of which employment levels in January through May in 2011. Nationwide Insurance and JP Morgan value of each absorption change in the market,is suburban. Chase have been driving this employment growth and it tells us how much space was in transition in 2012. in the quarter. The total amount of space in transition was 888,000 square feet. The market Professional and Business Services grew has picked up from first quarter in office leasing, steadily from 147,500 employees in January to though activity is not as high as it has been in 154,000 in May. Employment levels in January years past when more than 1.3 million square and February this year were 1.2 and 1.9 percent feet on average were in transition. greater than the same months in 2011. Consistent MARKET ACTIVITY SALES ACTIVITY PROPERTY ADDRESS SALES DATE SALE PRICE SIZE SF BUYER SELLER PRICE / SF TYPE SUBMARKET 41 S High Street 6/8/2012 $177,000,000.00 1,112,409 Huntington Center LLC Huntington Center Associates $195.00 A CBD 7800 Walton Parkway 6/4/2012 $13,333,000.00 86,312 CVG12 New Albany OH LLC Walton 605 LLC $154.47 A New Albany 2231 Schrock Road 4/25/2012 $4,700,000.00 41,656 Cole of Columbus Ohio Schrock Office Realty $112.82 B Worthington 570 Metro Place 6/26/2012 $2,100,000.00 32,000 Investment Grade Loan, Inc. 570 Metro Place North LP $61.35 B Dublin 3592 Corporate Drive 6/28/2012 $4,037,000.00 30,003 NCH12 Columbus OH LLC Omni Columbus One LLC $134.55 B Westerville 1335 Worthington Woods 4/23/2012 $1,200,000.00 24,144 A & J Rentals LLC McLeod Properties LLC $49.70 C Worthington 5957 Cleveland Avenue 5/4/2012 $1,250,000.00 17,911 HIS Property LLC Burton Terence W TR $69.78 B Westerville 81 S 5th Street 4/16/2012 $1,180,000.00 15,000 JEK Management Ltd 81 S 5th St LLC $78.66 C Capitol Square LEASE ACTIVITY PROPERTY ADDRESS SALES DATE LEASE SF TENANT ASKING PRICE (NNN) TYPE SUBMARKET 1 Easton Oval 6/14/2012 39,866 Residential Finance $12.95 A Easton 4689 Hilton Corporate Drive 4/1/2012 20,000 Connections Education $10.00 B East 5747 Perimeter Drive 5/22/2012 15,118 University of Dayton $8.95 B Dublin 4689 Hilton Corporate Drive 6/26/2012 14,586 National Charter School $10.00 B East 6460 Busch Boulevard 5/9/2012 11,897 Learning Never Ends, LLC $11.75 B Worthington 7540 Sawmill Parkway 5/18/2012 11,027 Childrens of America $14.00 B Powell 2400 Corporate Exchange Drive 5/1/2012 10,650 Wilkes Broadcast Group $14.50 B WestervilleP. 2 | COLLIERS INTERNATIONAL
  3. 3. RESEARCH & FORECAST REPORT | Q2 2012 | OFFICE | GREATER COLUMBUS REGIONUPDATE Market ComparisonsOFFICE MARKET Net Absorption Construction Asking Rental RatesSUBMARKET Total SF Vacant SF Vacancy % Current Quarter Year-to-date Current Completions Class A ($) Class B ($)CBD 19,358,350 2,048,195 10.6 48,968 54,622 251,000 - $19.89 $17.09ARLINGTON/GRANDVIEW 4,752,155 626,851 13.2 44,819 8,105 - $21.36 $15.59DUBLIN 9,501,878 1,266,673 13.3 (16,401) (54,536) - $18.80 $15.16EAST 3,691,158 503,935 13.7 19,072 43,883 - $15.66 $14.97EASTON 2,685,332 283,146 10.5 (116,057) (116,512) - $21.04 $22.00GAHANNA/AIRPORT 1,262,031 127,404 10.1 3,634 21,910 - $16.99 $16.54HILLIARD 2,480,456 472,440 19.0 16,784 5,835 - $19.95 $14.73NEW ALBANY 1,935,789 153,354 7.9 29,274 29,274 50,000 - $18.73 -NORTH CENTRAL 1,255,636 74,116 5.9 (4,561) (6,813) - - $13.68POLARIS 4,419,869 267,398 6.0 (11,712) (35,872) - $19.36 $19.13POWELL 273,719 60,302 22.0 235 (7,645) - - $15.77SOUTHEAST 402,548 52,818 13.1 (1,250) (2,065) - - -SOUTHWEST 236,158 43,987 18.6 (137) (6,216) - - $16.95WESTERVILLE 4,489,479 651,263 14.5 (15,727) 10,852 - $16.31 $15.11WORTHINGTON 6,296,402 934,215 14.8 35,804 63,215 - $16.88 $14.56SUBURBAN TOTAL 43,682,610 5,517,902 12.6 (16,223) (46,585) 50,000 - $18.55 $15.10TOTAL 63,051,662 7,566,097 12.0 32,745 8,037 301,000 0 $19.05 $15.67 Net Absorption Construction Asking Rental RatesPROPERTY TYPE Total SF Vacant SF Vacancy % Current Quarter Year-to-date Current Completions By Product TypeCLASS A 26,082,781 2,850,863 10.9 (13,512) (20,580) 301,000 - $19.05CLASS B 23,087,076 3,020,551 13.1 109,978 66,781 - $15.67CLASS C 13,881,805 1,694,683 12.2 (63,721) (38,164) - $12.71TOTALS 63,051,662 7,566,097 12.0 32,745 8,037 301,000 - $16.46QUARTERLY COMPARISON AND TOTALS Net Absorption Construction Asking Rental RatesQUARTER, YEAR Total SF Vacant SF Vacancy % Current Quarter Year-to-date Current Completions By Product TypeQ1, 2012 63,040,960 7,598,842 12.1 (22,230) (22,230) 301,000 140,000 $18.79 $15.57Q4, 2011 63,040,314 7,632,767 12.1 252,351 732,831 190,000 - $18.61 $15.47Q3, 2011 63,040,314 7,885,118 12.5 284,581 480,480 190,000 - $18.58 $15.41Q2, 2011 62,900,314 8,169,699 13.0 202,803 195,899 190,000 - $18.25 $15.25 COLUMBUS REGION MARKET Colliers International has changed the critieria for inclusion in the office dataset. All 10,000 square foot, class A, B and C buildings, not owned and fully leased by government are included in the dataset. COLLIERS INTERNATIONAL | P. 3
  4. 4. RESEARCH & FORECAST REPORT | Q2 2012 | OFFICE | GREATER COLUMBUS REGIONCENTRAL BUSINESS DISTRICT Never Ends, who leased 11,000 square feet at 6460 Busch Boulevard and Flairsoft, who leasedThe CBD saw more than 48,000 square feet ofpositive absorption. Many smaller leases were 7,000 square feet at 7720 Rivers Edge Drive. 522 offices incompleted at 65 East State, 130 Chestnut Street, SOUTH MARKET 62 countries on10 East Broad Street, and 585 Front Street formore than 36,000 square feet of absorption. The south submarkets are the Southwest and 6 continentsLarge leases included Safe Auto moving into the Southeast. United States: 14728,000 square feet at 175 South Third Avenue Canada: 37and Colliers International moving into just less Very little change occurred in these submarkets Latin America: 19than 11,000 square feet at Two Miranova Place. as these are among the smallest submarkets, Asia Pacific: 201No significantly sized tenants vacated space. with little significant office space. EMEA: 118 • $1.8 billion in annual revenueNationwide Insurance began construction on EAST MARKET • 1.25 billion square feet undertheir 200,000 square foot facility, where they management The east submarkets are the East side, Easton,will house the employees transferring into • Over 12,300 professionals Gahanna/Airport and New Albany.downtown from 5900 Parkwood Place in Dublin.Nationwide Realty also began construction on a GREATER COLUMBUS REGION: The East submarket saw 19,000 square feet ofnew 51,000-square-foot, $10 million project. positive absorption from a national charter Richard B. Schuen SIOR CCIMLocated at 425 W. Nationwide Blvd, the site will CEO | Principal | Columbus school leasing 20,000 square feet of negativebe anchored by FBI. 2 Miranova absorption at 4689 Hilton Corporate Drive. Suite 900WEST MARKET Columbus, Ohio 43215 The Easton submarket lost 116,000 square feet TEL +1 614 410 5612The west submarkets are Arlington/Grandview this quarter with strong activity. Net Jets vacatedand Hilliard. 103,000 square feet at 4349 Easton Way and McGraw Hill vacated 67,000 square feet at 4400 Leslie HobbsThe Hilliard submarket saw positive absorption Director of Marketing | Ohio Easton Commons. Positive absorption came 2 Miranovaof 16,000 square feet from smaller leases. from Residential Finance leasing 39,000 square Suite 900 feet at 1 Easton Oval and Abbott Labs leasing Columbus, Ohio 43215Arlington/Grandview saw more than 44,000 9,000 square feet at 3435 Stelzer Road. TEL +1 614 410 5640square feet of positive absorption. The BoyScouts of America leased 28,000 square feet at New Albany saw 29,000 square feet of positive807 Kinnear Road. absorption from Healthscape, leasing more than Jonathan Schuen Research Analyst 11,000 square feet at 5150 Dublin-Granville 2 MiranovaNORTH COLUMBUS MARKET Road, and Auto Owners and Maxwell Financial Suite 900The north submarkets are Dublin, Powell, Polaris, leased space at 6530 Campus Oval for a total of Columbus, Ohio 43215North Central, Worthington and Westerville. 7,000 square feet. TEL +1 614 437 4495Dublin saw negative 16,000 square feet of space LANDLORD/TENANTon the back of PICS Photoscan vacating 43,000 The types of tenants most seen in the marketsquare feet at 4150 Tuller Road and Century Link recently have been medical, call centers, highervacating 22,800 square feet at 6000 Parkwood education, and banking. Tenants have heard soPlace. Positive absorption came from Wendy’s much negativity from the media about the market This document/email has been prepared by Colliers International for advertising purposes. Colliersleasing 28,000 square feet at 5555 Parkcenter that deals are extremely difficult to get done International statistics and data are audited annually andCircle, University of Dayton leasing 15,000 because tenants .are hesitant to close deals out may result in revisions to previously reported quarterly and final year-end figures. Sources include Columbussquare feet at 5747 Perimeter Drive and Maguire of the fear of getting locked in at a bad rate. Dispatch, Business First, Xceligent, CoStar, Chain Store& Schneider leasing 7,000 square feet at 555 Age, Wall Street Journal, Bureau of Labor Statistics,Metro Place. The largest issue facing landlords is creating a steady cashflow, especially for landlords whoPowell and North Central saw very little change. want to renegotiate their debt. Landlords arePolaris and Westerville saw slight negative also challenged to get good financial analysis ofabsorption from multiple smaller vacancies. tenants to understand tenant’s viability, as well as the tenant credit risk with significant cost forWorthington had 35,000 square feet of improvements when required.absorption. Two notable leases were Learning Accelerating success.www.colliers.com/columbus

×