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The Punch List: What's the state of the Columbus office market?


The high sale price of the second CoverMyMeds building in Franklinton isn't indicative of the broader office market, where one expert says deep-pocketed buyers can be hard to find.

But there are other reasons for optimism in the market, at least when it comes to leasing activity. That's the focus of this week's Punch List, our new and improved analysis of the biggest trends in real estate for the week.

Last week, we reported that the second phase of the CoverMyMeds campus had been acquired for $118 million.

The buyer of the building was MK 2 Property Company LLC, a similarly named entity to the MK 1 Property Company LLC that purchased the first phase of the campus in a $120 million deal last year.

The buyers in that 2021 deal were Qatar First Bank, now known as Lesha Bank, and Northern Virginia-based Golden Eagle Group Inc., which lists the John Street property on its website. Golden Eagle last week announced it had acquired the second phase "of a corporate headquarters of a healthcare technology company located in Columbus" and owned by a Fortune 100 company, following the May 2021 acquisition of the first phase.

Although both sales were record-breaking, they're not a sign that investors are looking to snap up office buildings.

"Buyers of office property today are few and far between," Liz Ptacek, senior director of market analytics for CoStar, told me last week.

Ptacek said rising interest rates, hybrid working and a likely recession will cause office activity to slow in the future, especially when it comes to sales.

But it's not all bad news.

As the flight-to-quality trend continues in the Columbus office market, Class B buildings stand to benefit in terms of their own leasing activity.

Matt Gregory, senior vice president at NAI Ohio Equities, called it "the trickle down effect."

Class A stands to benefit the most from flight-to-quality, but as tenants are moving from Class B to Class A space or new construction, new tenants are also looking to move up.

"We've seen a lot of companies trading up space," Ryan McHugh, an office broker at Colliers, told me.

An example of a Class B building winning tenants is the three Corporate Exchange buildings near Westerville, which McHugh was the leasing agent for. Hudson-based Moss Commercial Property Group acquired 284,600 square feet of office space across the three-building office complex at Corporate Exchange Office Park in 2021 and renovated the interiors, securing a few new tenants such as the Ohio Housing Finance Agency and Pike Engineering, McHugh said.

After Moss Commercial bought the three buildings, the firm renovated them.

"This is a great example of a landlord seeing results from improving Class B buildings," McHugh said. "Even in Class B buildings, if you add amenities you can close deals. Class B still has a place in the Columbus market."

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Ryan McHugh



As a brokerage associate at Colliers International, Ryan specializes in commercial office leasing, including both landlord and tenant representation in the central Ohio area. Ryan worked as an intern at Colliers International Columbus prior to coming on as a full-time associate. His market knowledge, attention to detail and relentless effort allow Ryan to come up with creative and effective real estate solutions for his clients.   

Ryan graduated from The Ohio State University with a dual-specialization in finance and real estate. While at OSU Ryan was involved in several student organizations, including the Fisher Real Estate Society where he served as Vice President. Real estate has always been his primary interest, but financial background enables him to offer those essential skills to his clients.  

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