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Q1 2011 | OFFICE




GREATER COLUMBUS REGION

OFFICE TRENDS REPORT



                                                                                            Activity Rebounds
                                                                                            COLUMBUS REGION OVERVIEW
                                                                                            The Columbus office market incurred 14,500 square feet of negative absorption. Despite the continued
                                                                                            malaise of absorption, there is stronger sense of optimism than at any time since the start of the
                                                                                            recovery. We expect good absorption numbers for second quarter 2011 based on the increased rate
                                                                                            of deal completions and a large number pending deals at the close of first quarter. Activity this
                                                                                            quarter was marked by a number of tenants sought to reduce their footprint or sublease their
                                                                                            unneeded space, and a number of tenants in the Central Business District (CBD) expanded their
                                                                                            footprints within their current buildings. The biggest story was the number of buildings that transferred
MARKET INDICATORS                                                                           hands as 6 buildings over 100,000 square feet were transferred, including the Duke transfers
                                                                 Q1            Q2
                                                                                            mentioned in the last report. Continued on page 2 ...

                                                                2010         2011*          FORECASTS AND REFLECTIONS
                                                                                            •   The Columbus region posted negligible weak                                    construction.
                               VACANCY                                                          results during the first quarter of 2011 with                             •   Average asking rental rates for class A
                                                                                                the vacancy rate increasing marginally to 13.4                                continued to soften this quarter declining by
               NET ABSORPTION
                                                                                                percent from 13.3 percent in Q4 2010 adjusted                                 $.47, which class B average asking rental
                   CONSTRUCTION                                                —                numbers.                                                                      rates increased by $.50.
                                                                                            •   NetJets Inc began construction of their
                    RENTAL RATES                                —              —                                                                                          •   Rent concessions continued to play a very
                                                                                                140,000-square-foot building at Port                                          important factor in negotiation. Capital is still
                  *Projected trend for next quarter                                             Columbus International Airport. The                                           scarce for tenant improvement dollars and
                                                                                                Grandview Yard has begun leasing the first                                    landlords are waiting on the credit market to
                                                                                                phase of the project marking the completion of                                thaw.

                                                                                                                                                                                                                                     DATA SET CHANGES
RENTAL RATES                                                                                ABSORPTION, COMPLETIONS, AND VACANCY RATES
                                                                                                                                                                                                                                     Colliers international has
                                                                                                                20.0%                                                                       300,000                                  changed the critieria for
               $22.00
                                                                                                                18.0%                                                                                                                inclusion in the office
               $21.00
                                                                                                                                                                                            200,000
               $20.00                                                                                           16.0%
                                                                                                                                                                                                                                     dataset. All 10,000
                                                                                                                                                                                                                                     square foot, class A , B,
                                                                                                                                                                                                        Completions and Absorption




               $19.00
                                                                                                                                                                                            100,000
Rental Rates




                                                                                                                14.0%
               $18.00                                                                                                                                                                                                                C buildings, not owned
                                                                                                Vacancy Rates




               $17.00                                                                                           12.0%
                                                                                                                                                                                            0                                        and fully leased by
               $16.00
                                                                                                                10.0%                                                                                                                government are included
                                                                                                                                                                                                                                     in the dataset. This has
               $15.00
                                                                                                                                                                                            (100,000)
               $14.00                                                                                            8.0%
                        3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 4Q 09 1Q 10 2Q 10 3Q 10 4Q 10 1Q 11                                                                                                                                            changed the overall
                                                                                                                 6.0%                                                                       (200,000)
                                         Class A Rental Rates     Class B
                                                                                                                                                                                                                                     vacancy rate signifi-
                                                                                                                 4.0%                                                                                                                cantly from the numbers
                                                                                                                                                                                            (300,000)
                                                                                                                 2.0%                                                                                                                at the close of 2010.
                                                                                                                 0.0%                                                                       (400,000)
                                                                                                                        3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 4Q 09 1Q 10 2Q 10 3Q 10 4Q 10 1Q 11

                                                                                                                                       Completions     Absorption     Vacancy Rate




www.colliers.com/columbus
RESEARCH & FORECAST REPORT | Q1 2011 | OFFICE | GREATER COLUMBUS REGION


                                                                                     Market interest has increased during the first          offices and a training center.
                                 Delaware
                                 County                                              quarter. While it’s very difficult to calculate and
   Union County                                                                      gauge market interest accurately, Colliers              Market Activity Volume is the sum of the absolute
                        Powell       Polaris
                                               Westerville
                                                                                     International attempts to track tenants in the          value of each absorption change in the market,
                                                                Licking
                                  Worthington         New
                                                                County               market. There was an increase of 200,000                and it tells us how much space was in transition
                  Dublin                              Albany
                            Bethel
                                     North
                                     Central
                                                                                     square feet in the minimum square feet desired          in the quarter. Roughly 300,000 fewer square
             Hilliard   Arlington/
                        Grandview
                                           Easton    Gahanna/
                                                     Airport                         by tenants that have toured space and have been         feet were in transition this quarter than first
                                                                                     in the market. There were roughly eight tenants         quarter last year. The total amount in transition
                                   CBD
   Madison                                          East
   County
              Southwest
                                                                                     seeking more than 50,000 square feet of space           was slightly more than 700,000 square feet.
                                               Southeast
                                                                Fairfield
                                                                                     which is an increase over the average of seven in       This is significant as the general trend is that the
                                                                County
                                                                                     the previous year.                                      first quarter has the highest amount of space in
                           Pickaway County                                                                                                   transition
                                                                                     Tenants are pursuing a broad range of options
The Columbus office market consists
                                                                                     for dealing with excess space on current leases,        SIGNIFICANT INVESTMENT SALES
of 15 suburban submarkets plus the                                                   and even some owner users are opening up                The past six months have been momentous for
Central Business District submarket. The                                             space in their buildings to exercise multi-tenant       investment sales locally. It is estimated that there
Columbus region features a total of 62.6                                             options. Beyond subleasing space we heard that          is $1.4 billion in commercial real estate loans that
million square feet, 43.5 million of which                                           many tenants were relocating within their               will expire by 2014 nationally, and in light of that
is suburban.
                                                                                     current locations. This behavior typifies power         fact we expect that institutional and investment
                                                                                     on the part of the tenant in that landlords are         sales activity will increase locally over that
                                                                                     very willing to rearrange suites to keep tenants.       period. While data on the number of underwater
                                                                                                                                             loans is unavailable we estimate that there is at
                                                                                     Columbia Gas has committed to anchoring the             least one million square feet of space that could
                                                                                     corner of Neil Avenue and Nationwide Boulevard          transfer under the conditions like the sales that
                                                                                     with a 280,000 square foot building. Also,              have occurred lately.
                                                                                     Columbia Gas has announced an investment plan
                                                                                     that includes $50 million in upgrades for Central       Two major landmark towers were sold in the
                                                                                     and southeast Ohio as well as hiring 36 new             CBD, the Atlas tower and the LeVeque tower. The
                                                                                     employees for that region.                              city’s two oldest towers each sold well below the
                                                                                                                                             previous price paid. LeVeque Tower sold for $4
                                                                                     Bob Evans has announced it will move to New             million ($11.31 psf) while the Atlas building was
                                                                                     Albany garnering a seven year payroll tax of 25         sold for $3.5 million ($2.92) The 250,000-square-
                                                                                     percent as well as a 15-year real tax abatement         foot Nisource Call Center at 1600 Dublin Road
                                                                                     on the value of its new buildings. The firm plans       sold in February for $6 million ($24.00 psf).
                                                                                     to construct a 175,000-square-foot facility for



 MARKET ACTIVITY

 SALES AND DEALS

 PROPERTY ADDRESS                                          SALES DATE                SALE PRICE                        SIZE SF             SALES PRICE / SF          TYPE
 50 W. Broad St                                            Mar 2011                  $4,043,000.00                     353,768             $11.43                    General Office
 8 E Long St                                               Feb 2011                  $3,500,000.00                     120,000             $29.17                    General Office
 1600 Dublin Road                                          Mar 2011                  $6,000,000.00                     252,000             $23.81                    General Office
 350 E Wilson Bridge Rd                                    Feb 2011                  $2,700,000.00                     166,399             $63.91                    Medical
 2401 N Columbus St                                        Jan 2011                  $3,120,000.00                     15,582              $200.23                   General Office

 PROPERTY ADDRESS                                          LESSOR                    LESSEE                            LEASE SF            ASKING PRICE / SF (FSG)   TYPE
 150 E Gay St                                              Continental Centre Llc    Exact Logistics                   19,348              $9.50 (NNN)               Direct Lease
 7450 Huntington Park Dr                                   Buckeye Realty Corp       Confidential                      18,610              $16.00                    Direct Lease
 580 N 4th St                                              SBHI INC                  N/A                               12,335              $13.50                    Direct Lease
 1783-99 Kenny Rd                                          Franklin Co. Board Com-   N/A                               11,593              $5.60 (NNN)               Direct Lease
                                                           mission




P. 2     | COLLIERS INTERNATIONAL
RESEARCH & FORECAST REPORT | Q1 2011 | OFFICE | GREATER COLUMBUS REGION




UPDATE     Market Comparisons

OFFICE MARKET
                                                                                Net Absorption                     Construction                     Asking Rental Rates
SUBMARKET                       Total SF     Vacant SF   Vacancy %   Current Quarter      Year-to-date   Current          Completions          Class A ($)       Class B ($)
CBD                             19,091,001   2,210,245   11.6        58,477               58,477         -                -                     $19.25            $16.78
ARLINGTON/GRANDVIEW             4,752,155    733,439     15.4        (11,579)             (11,579)       -                65,000                $17.06            $15.90
DUBLIN                          9,501,878    1,369,331   14.4        (30,479)             (30,479)       -                -                     $18.67            $14.96
EAST                            3,555,814    573,905     16.1        9,651                9,651          140,000          -                     $17.76            $12.22
EASTON                          2,685,332    193,084     7.2         (9,353)              (9,353)        -                -                     $18.18            $18.75
GAHANNA/AIRPORT                 1,262,397    294,486     23.3        42,411               42,411         -                -                     $18.18            $15.84
HILLIARD                        2,480,456    310,575     12.5        (11,315)             (11,315)       -                -                     $19.09            $15.47
NEW ALBANY                      1,935,789    249,521     12.9        (14,587)             (14,587)       69.700           -                     $18.71            $15.00
NORTH CENTRAL                   1,255,636    86,953      6.9         (19,128)             (19,128)       -                -                     $23.00            $15.76
POLARIS                         4,419,869    350,218     7.9         (79,647)             (79,647)       -                -                     $18.54            $16.45
POWELL                          273,719      73,895      27.0        7,133                7,133          -                -                     -                 $14.76
SOUTHEAST                       402,548      70,365      17.5        (10,500)             (10,500)       -                -                     -                 -
SOUTHWEST                       236,158      41,473      17.6        -                    -              -                -                     -                 $8.50
WESTERVILLE                     4,489,479    834,929     18.6        (9,222)              (9,222)        -                -                     $16.92            $15.35
WORTHINGTON                     6,496,402    1,001,623   15.4        63,638               63,638         -                -                     $17.92            $14.23
SUBURBAN TOTAL                  43,747,632   6,183,797   14.1        (72,977)             (72,977)       -                65,000                $17.50            $14.91
TOTAL                           62,838,633   8,394,042   13.4        (14,500)             (14,500)       -                65,000                $18.10            $15.46


                                                                                Net Absorption                     Construction                     Asking Rental Rates
PROPERTY TYPE                   Total SF     Vacant SF   Vacancy %   Current Quarter      Year-to-date   Current          Completions          By Product Type
CLASS A                         25,562,843   3,163,300   12.4        (85,168)             (85,168)       209,700          65,000                $18.10
CLASS B                         23,215,746   3,501,441   15.1        94,389               94,389         -                -                     $15.46
CLASS C                         14,060,044   1,729,301   12.3        (23,721)             (23,721)       -                -                     $12.35
TOTALS                          62,838,633   8,394,042   13.4        (14,500)             (14,500)       -                65,000                $15.87

QUARTERLY COMPARISON AND TOTALS
                                                                                 Net Absorption                    Construction                      Asking Rental Rates
QUARTER, YEAR                   Total SF     Vacant SF   Vacancy %   Current Quarter Year-to-date        Current              Completions      By Product Type
Q4, 2010                        40,544,677   7,188,371   17.73       (13,360)             (253,648)                                            $18.56        $14.96
Q3, 2010                        40,544,677   7,184,011   17.72       (191,783)            (240,288)      90,000               -                $18.77        $15.38
Q2, 2010                        40,544,677   6,992,228   17.25       54,334               (48,505)       90,000               -                $19.30        $15.82
Q1, 2010                        40,544,677   7,046,562   17.38       (102,839)            (102,839)      90,000               -                $19.30        $15.82



                                                                                                                                  COLUMBUS REGION MARKET
                                                                                                                                  Class B space did well first quarter
                                                                                                                                  for the first time since second quarter
                                                                                                                                  2010. Prior to second quarter 2010
                                                                                                                                  class B space did not have positive
                                                                                                                                  absorption after fourth quarter of 2008.
                                                                                                                                  Pricing between class types are still
                                                                                                                                  compressed which is in large part .




                                                                                                                                         COLLIERS INTERNATIONAL |              P. 3
RESEARCH & FORECAST REPORT | Q1 2011 | OFFICE | GREATER COLUMBUS REGION


CENTRAL BUSINESS DISTRICT                             negative absorption. A good portion of the space
The CBD was one of the stronger performing            expansion and contraction occurred here with
submarkets first quarter due to a couple of large     downsizing accounting for about 15,000 square           480 offices in
leases including two expansions. Huntington
Bancshares took an extra 15,471 square feet of
                                                      feet of negative absorption and expansion
                                                      accounting for 5,000 square feet of positive
                                                                                                              61 countries on
space at 250 Broad Street, and Motorist               absorption.                                             6 continents
Insurance Group took an extra 6,930 at 45 N.
High Street. Class B average asking rental rates      SOUTH MARKET                                            United States: 95
                                                                                                              Canada: 17
increased by a significant amount as well from        The south submarkets are the Southwest and              Latin America: 17
$15.87 to $16.78.                                     the Southeast. There was some movement in               Asia Pacific: 52
                                                      the Southeast: Scholars Preparatory and Career          EMEA: 85
Tax incentives are available for downtown             Center for Children leased 24,000 square feet of    •   $1.6 billion in annual revenue
relocation including the Columbus Downtown            space at 1565 Integrity Drive, but the vacancy of
                                                                                                          • 672.9 million square feet under
Office Incentive Program which is available to        the Legal Aid Society from 34,500 square feet of
                                                                                                              management
those private sector tenants who are moving           space at 1108 City Park Drive washed out the
                                                                                                          • Over 10,000 professionals
from outside the Columbus city limits and will        gain. No change occurred in the Southwest.
create at least ten jobs.
                                                                                                              GREATER COLUMBUS REGION:
                                                      EAST MARKET
NORTH COLUMBUS MARKET                                 The east submarkets are the East side, Easton,
                                                                                                              Richard B. Schuen SIOR CCIM
                                                                                                              CEO | Principal | Columbus
The north submarkets are Dublin, Powell, Polaris,     Gahanna/Airport, and New Albany. Proposed               8800 Lyra Drive
North Central, Worthington, and Westerville.          construction in New Albany continues to be the          Suite # 150
Class A leasing was weak in these submarkets          biggest story in the East as the business parks         Columbus, Ohio 43240
with no positive absorption occurring. Class A        grow and develop there. The Gahanna/Airport             TEL +1 614 410 5612
incurred 98,491 of negative absorption with the       submarket experienced 42,411 square feet of             FAX +1 614 410 3312
vast majority of it coming from losses in Polaris.    absorption from a couple larger deals.
                                                                                                              Leslie Hobbs
                                                                                                              Marketing & Research Manager
While leasing was strong, the average asking          EMPLOYMENT DATA                                         8800 Lyra Drive
rental rates dipped in all submarkets except for                                                              Suite # 150
                                                      The unemployment rate for Columbus in January
Polaris. Overall, class A space is being taken but                                                            Columbus, Ohio 43240
                                                      was 8.5 percent, up from 7.8 percent in
not at a pace that will allow landlords increase                                                              TEL +1 614 410 5640
                                                      December 2010. The unemployment rate is
average asking rental rates in the short term.                                                                FAX +1 614 410 3310
                                                      determined by the ratio of the number of those
                                                      who have looked for work in the last 4 weeks            Jonathan Badgley
Polaris was the poorest performing submarket                                                                  Research Analyst
                                                      compared to the total number of workers and
with 79,647 of negative absorption. The largest                                                               8800 Lyra Drive
                                                      those searching for employment. The recent dip
portion of this recorded loss was from the                                                                    Suite # 150
                                                      from 8.0 percent in November to 7.7 percent in          Columbus, Ohio 43240
landlord adding 24,341 square feet from
                                                      December 2010 and the subsequent increase in            TEL +1 614 410 5652
American Family Insurance.
                                                      January through February closing at is 8.2              FAX +1 614 410 3327
                                                      percent is a sign that those out of work are
In Dublin, smaller tenants shuffled while only a
                                                      returning to the labor market and less of an
few larger changes moved absorption into the
                                                      indication that layoffs are occurring. Based on
red. Sophos left the central Ohio market
                                                      the Bureau of Labor Statistics’ preliminary
altogether leaving 28,700 square feet at 565
                                                      numbers, the only sector to lose employment             This document/email has been prepared by Colliers
Metro Place. Corvell expanded their lease at
                                                      from January to February was Trade,                     International for advertising purposes. Colliers
5080 Tuttle Crossing Blvd. by 6,000 square feet.                                                              International statistics and data are audited annually and
                                                      Transportation, and Utilities.                          may result in revisions to previously reported quarterly
                                                                                                              and final year-end figures. Sources include Columbus
Alcatel-Lucent signed a 120,000-square-foot                                                                   Dispatch, Business First, Xceligent, and the Wall Street
                                                      The sectors which are significant for office            Journal.
lease at 5455-5475 Rings Road, Atrium II. The
                                                      leasing were steady or up in the preliminary
firm will be vacating their offices on East Broad
                                                      February numbers. The information sector was
Street in Columbus and moving 600 employees
                                                      flat January to February but down 1.8 percent
to the new location. The absorption changes
                                                      from a year ago. Employment for Financial
from this deal will not be reflected in this report
                                                      Activities, and Professional and Business
as the transition has not yet occurred.
                                                      Services were flat January to February with
                                                      12-month change of 1.3 percent and 4.4 percent
WEST MARKET                                           respectively. Education and Health Services
                                                      increased by about 100 workers with a .6                          Accelerating success.
The west submarkets, are Arlington/Grandview
                                                      percent 12-month change.
and Hilliard. Both submarkets experienced slight


www.colliers.com/columbus

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Q12011 Columbus Office Market Report

  • 1. Q1 2011 | OFFICE GREATER COLUMBUS REGION OFFICE TRENDS REPORT Activity Rebounds COLUMBUS REGION OVERVIEW The Columbus office market incurred 14,500 square feet of negative absorption. Despite the continued malaise of absorption, there is stronger sense of optimism than at any time since the start of the recovery. We expect good absorption numbers for second quarter 2011 based on the increased rate of deal completions and a large number pending deals at the close of first quarter. Activity this quarter was marked by a number of tenants sought to reduce their footprint or sublease their unneeded space, and a number of tenants in the Central Business District (CBD) expanded their footprints within their current buildings. The biggest story was the number of buildings that transferred MARKET INDICATORS hands as 6 buildings over 100,000 square feet were transferred, including the Duke transfers Q1 Q2 mentioned in the last report. Continued on page 2 ... 2010 2011* FORECASTS AND REFLECTIONS • The Columbus region posted negligible weak construction. VACANCY results during the first quarter of 2011 with • Average asking rental rates for class A the vacancy rate increasing marginally to 13.4 continued to soften this quarter declining by NET ABSORPTION percent from 13.3 percent in Q4 2010 adjusted $.47, which class B average asking rental CONSTRUCTION — numbers. rates increased by $.50. • NetJets Inc began construction of their RENTAL RATES — — • Rent concessions continued to play a very 140,000-square-foot building at Port important factor in negotiation. Capital is still *Projected trend for next quarter Columbus International Airport. The scarce for tenant improvement dollars and Grandview Yard has begun leasing the first landlords are waiting on the credit market to phase of the project marking the completion of thaw. DATA SET CHANGES RENTAL RATES ABSORPTION, COMPLETIONS, AND VACANCY RATES Colliers international has 20.0% 300,000 changed the critieria for $22.00 18.0% inclusion in the office $21.00 200,000 $20.00 16.0% dataset. All 10,000 square foot, class A , B, Completions and Absorption $19.00 100,000 Rental Rates 14.0% $18.00 C buildings, not owned Vacancy Rates $17.00 12.0% 0 and fully leased by $16.00 10.0% government are included in the dataset. This has $15.00 (100,000) $14.00 8.0% 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 4Q 09 1Q 10 2Q 10 3Q 10 4Q 10 1Q 11 changed the overall 6.0% (200,000) Class A Rental Rates Class B vacancy rate signifi- 4.0% cantly from the numbers (300,000) 2.0% at the close of 2010. 0.0% (400,000) 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 4Q 09 1Q 10 2Q 10 3Q 10 4Q 10 1Q 11 Completions Absorption Vacancy Rate www.colliers.com/columbus
  • 2. RESEARCH & FORECAST REPORT | Q1 2011 | OFFICE | GREATER COLUMBUS REGION Market interest has increased during the first offices and a training center. Delaware County quarter. While it’s very difficult to calculate and Union County gauge market interest accurately, Colliers Market Activity Volume is the sum of the absolute Powell Polaris Westerville International attempts to track tenants in the value of each absorption change in the market, Licking Worthington New County market. There was an increase of 200,000 and it tells us how much space was in transition Dublin Albany Bethel North Central square feet in the minimum square feet desired in the quarter. Roughly 300,000 fewer square Hilliard Arlington/ Grandview Easton Gahanna/ Airport by tenants that have toured space and have been feet were in transition this quarter than first in the market. There were roughly eight tenants quarter last year. The total amount in transition CBD Madison East County Southwest seeking more than 50,000 square feet of space was slightly more than 700,000 square feet. Southeast Fairfield which is an increase over the average of seven in This is significant as the general trend is that the County the previous year. first quarter has the highest amount of space in Pickaway County transition Tenants are pursuing a broad range of options The Columbus office market consists for dealing with excess space on current leases, SIGNIFICANT INVESTMENT SALES of 15 suburban submarkets plus the and even some owner users are opening up The past six months have been momentous for Central Business District submarket. The space in their buildings to exercise multi-tenant investment sales locally. It is estimated that there Columbus region features a total of 62.6 options. Beyond subleasing space we heard that is $1.4 billion in commercial real estate loans that million square feet, 43.5 million of which many tenants were relocating within their will expire by 2014 nationally, and in light of that is suburban. current locations. This behavior typifies power fact we expect that institutional and investment on the part of the tenant in that landlords are sales activity will increase locally over that very willing to rearrange suites to keep tenants. period. While data on the number of underwater loans is unavailable we estimate that there is at Columbia Gas has committed to anchoring the least one million square feet of space that could corner of Neil Avenue and Nationwide Boulevard transfer under the conditions like the sales that with a 280,000 square foot building. Also, have occurred lately. Columbia Gas has announced an investment plan that includes $50 million in upgrades for Central Two major landmark towers were sold in the and southeast Ohio as well as hiring 36 new CBD, the Atlas tower and the LeVeque tower. The employees for that region. city’s two oldest towers each sold well below the previous price paid. LeVeque Tower sold for $4 Bob Evans has announced it will move to New million ($11.31 psf) while the Atlas building was Albany garnering a seven year payroll tax of 25 sold for $3.5 million ($2.92) The 250,000-square- percent as well as a 15-year real tax abatement foot Nisource Call Center at 1600 Dublin Road on the value of its new buildings. The firm plans sold in February for $6 million ($24.00 psf). to construct a 175,000-square-foot facility for MARKET ACTIVITY SALES AND DEALS PROPERTY ADDRESS SALES DATE SALE PRICE SIZE SF SALES PRICE / SF TYPE 50 W. Broad St Mar 2011 $4,043,000.00 353,768 $11.43 General Office 8 E Long St Feb 2011 $3,500,000.00 120,000 $29.17 General Office 1600 Dublin Road Mar 2011 $6,000,000.00 252,000 $23.81 General Office 350 E Wilson Bridge Rd Feb 2011 $2,700,000.00 166,399 $63.91 Medical 2401 N Columbus St Jan 2011 $3,120,000.00 15,582 $200.23 General Office PROPERTY ADDRESS LESSOR LESSEE LEASE SF ASKING PRICE / SF (FSG) TYPE 150 E Gay St Continental Centre Llc Exact Logistics 19,348 $9.50 (NNN) Direct Lease 7450 Huntington Park Dr Buckeye Realty Corp Confidential 18,610 $16.00 Direct Lease 580 N 4th St SBHI INC N/A 12,335 $13.50 Direct Lease 1783-99 Kenny Rd Franklin Co. Board Com- N/A 11,593 $5.60 (NNN) Direct Lease mission P. 2 | COLLIERS INTERNATIONAL
  • 3. RESEARCH & FORECAST REPORT | Q1 2011 | OFFICE | GREATER COLUMBUS REGION UPDATE Market Comparisons OFFICE MARKET Net Absorption Construction Asking Rental Rates SUBMARKET Total SF Vacant SF Vacancy % Current Quarter Year-to-date Current Completions Class A ($) Class B ($) CBD 19,091,001 2,210,245 11.6 58,477 58,477 - - $19.25 $16.78 ARLINGTON/GRANDVIEW 4,752,155 733,439 15.4 (11,579) (11,579) - 65,000 $17.06 $15.90 DUBLIN 9,501,878 1,369,331 14.4 (30,479) (30,479) - - $18.67 $14.96 EAST 3,555,814 573,905 16.1 9,651 9,651 140,000 - $17.76 $12.22 EASTON 2,685,332 193,084 7.2 (9,353) (9,353) - - $18.18 $18.75 GAHANNA/AIRPORT 1,262,397 294,486 23.3 42,411 42,411 - - $18.18 $15.84 HILLIARD 2,480,456 310,575 12.5 (11,315) (11,315) - - $19.09 $15.47 NEW ALBANY 1,935,789 249,521 12.9 (14,587) (14,587) 69.700 - $18.71 $15.00 NORTH CENTRAL 1,255,636 86,953 6.9 (19,128) (19,128) - - $23.00 $15.76 POLARIS 4,419,869 350,218 7.9 (79,647) (79,647) - - $18.54 $16.45 POWELL 273,719 73,895 27.0 7,133 7,133 - - - $14.76 SOUTHEAST 402,548 70,365 17.5 (10,500) (10,500) - - - - SOUTHWEST 236,158 41,473 17.6 - - - - - $8.50 WESTERVILLE 4,489,479 834,929 18.6 (9,222) (9,222) - - $16.92 $15.35 WORTHINGTON 6,496,402 1,001,623 15.4 63,638 63,638 - - $17.92 $14.23 SUBURBAN TOTAL 43,747,632 6,183,797 14.1 (72,977) (72,977) - 65,000 $17.50 $14.91 TOTAL 62,838,633 8,394,042 13.4 (14,500) (14,500) - 65,000 $18.10 $15.46 Net Absorption Construction Asking Rental Rates PROPERTY TYPE Total SF Vacant SF Vacancy % Current Quarter Year-to-date Current Completions By Product Type CLASS A 25,562,843 3,163,300 12.4 (85,168) (85,168) 209,700 65,000 $18.10 CLASS B 23,215,746 3,501,441 15.1 94,389 94,389 - - $15.46 CLASS C 14,060,044 1,729,301 12.3 (23,721) (23,721) - - $12.35 TOTALS 62,838,633 8,394,042 13.4 (14,500) (14,500) - 65,000 $15.87 QUARTERLY COMPARISON AND TOTALS Net Absorption Construction Asking Rental Rates QUARTER, YEAR Total SF Vacant SF Vacancy % Current Quarter Year-to-date Current Completions By Product Type Q4, 2010 40,544,677 7,188,371 17.73 (13,360) (253,648) $18.56 $14.96 Q3, 2010 40,544,677 7,184,011 17.72 (191,783) (240,288) 90,000 - $18.77 $15.38 Q2, 2010 40,544,677 6,992,228 17.25 54,334 (48,505) 90,000 - $19.30 $15.82 Q1, 2010 40,544,677 7,046,562 17.38 (102,839) (102,839) 90,000 - $19.30 $15.82 COLUMBUS REGION MARKET Class B space did well first quarter for the first time since second quarter 2010. Prior to second quarter 2010 class B space did not have positive absorption after fourth quarter of 2008. Pricing between class types are still compressed which is in large part . COLLIERS INTERNATIONAL | P. 3
  • 4. RESEARCH & FORECAST REPORT | Q1 2011 | OFFICE | GREATER COLUMBUS REGION CENTRAL BUSINESS DISTRICT negative absorption. A good portion of the space The CBD was one of the stronger performing expansion and contraction occurred here with submarkets first quarter due to a couple of large downsizing accounting for about 15,000 square 480 offices in leases including two expansions. Huntington Bancshares took an extra 15,471 square feet of feet of negative absorption and expansion accounting for 5,000 square feet of positive 61 countries on space at 250 Broad Street, and Motorist absorption. 6 continents Insurance Group took an extra 6,930 at 45 N. High Street. Class B average asking rental rates SOUTH MARKET United States: 95 Canada: 17 increased by a significant amount as well from The south submarkets are the Southwest and Latin America: 17 $15.87 to $16.78. the Southeast. There was some movement in Asia Pacific: 52 the Southeast: Scholars Preparatory and Career EMEA: 85 Tax incentives are available for downtown Center for Children leased 24,000 square feet of • $1.6 billion in annual revenue relocation including the Columbus Downtown space at 1565 Integrity Drive, but the vacancy of • 672.9 million square feet under Office Incentive Program which is available to the Legal Aid Society from 34,500 square feet of management those private sector tenants who are moving space at 1108 City Park Drive washed out the • Over 10,000 professionals from outside the Columbus city limits and will gain. No change occurred in the Southwest. create at least ten jobs. GREATER COLUMBUS REGION: EAST MARKET NORTH COLUMBUS MARKET The east submarkets are the East side, Easton, Richard B. Schuen SIOR CCIM CEO | Principal | Columbus The north submarkets are Dublin, Powell, Polaris, Gahanna/Airport, and New Albany. Proposed 8800 Lyra Drive North Central, Worthington, and Westerville. construction in New Albany continues to be the Suite # 150 Class A leasing was weak in these submarkets biggest story in the East as the business parks Columbus, Ohio 43240 with no positive absorption occurring. Class A grow and develop there. The Gahanna/Airport TEL +1 614 410 5612 incurred 98,491 of negative absorption with the submarket experienced 42,411 square feet of FAX +1 614 410 3312 vast majority of it coming from losses in Polaris. absorption from a couple larger deals. Leslie Hobbs Marketing & Research Manager While leasing was strong, the average asking EMPLOYMENT DATA 8800 Lyra Drive rental rates dipped in all submarkets except for Suite # 150 The unemployment rate for Columbus in January Polaris. Overall, class A space is being taken but Columbus, Ohio 43240 was 8.5 percent, up from 7.8 percent in not at a pace that will allow landlords increase TEL +1 614 410 5640 December 2010. The unemployment rate is average asking rental rates in the short term. FAX +1 614 410 3310 determined by the ratio of the number of those who have looked for work in the last 4 weeks Jonathan Badgley Polaris was the poorest performing submarket Research Analyst compared to the total number of workers and with 79,647 of negative absorption. The largest 8800 Lyra Drive those searching for employment. The recent dip portion of this recorded loss was from the Suite # 150 from 8.0 percent in November to 7.7 percent in Columbus, Ohio 43240 landlord adding 24,341 square feet from December 2010 and the subsequent increase in TEL +1 614 410 5652 American Family Insurance. January through February closing at is 8.2 FAX +1 614 410 3327 percent is a sign that those out of work are In Dublin, smaller tenants shuffled while only a returning to the labor market and less of an few larger changes moved absorption into the indication that layoffs are occurring. Based on red. Sophos left the central Ohio market the Bureau of Labor Statistics’ preliminary altogether leaving 28,700 square feet at 565 numbers, the only sector to lose employment This document/email has been prepared by Colliers Metro Place. Corvell expanded their lease at from January to February was Trade, International for advertising purposes. Colliers 5080 Tuttle Crossing Blvd. by 6,000 square feet. International statistics and data are audited annually and Transportation, and Utilities. may result in revisions to previously reported quarterly and final year-end figures. Sources include Columbus Alcatel-Lucent signed a 120,000-square-foot Dispatch, Business First, Xceligent, and the Wall Street The sectors which are significant for office Journal. lease at 5455-5475 Rings Road, Atrium II. The leasing were steady or up in the preliminary firm will be vacating their offices on East Broad February numbers. The information sector was Street in Columbus and moving 600 employees flat January to February but down 1.8 percent to the new location. The absorption changes from a year ago. Employment for Financial from this deal will not be reflected in this report Activities, and Professional and Business as the transition has not yet occurred. Services were flat January to February with 12-month change of 1.3 percent and 4.4 percent WEST MARKET respectively. Education and Health Services increased by about 100 workers with a .6 Accelerating success. The west submarkets, are Arlington/Grandview percent 12-month change. and Hilliard. Both submarkets experienced slight www.colliers.com/columbus