Research & Forecast Report
COLUMBUS | OFFICE
The Columbus office market continues to be impacted by the ongoing COVID-19 pandemic, posting negative net absorption of 351,686 square feet and vacancy of 11.8 percent this quarter. A majority of this can be attributed to the 700,000+ square feet of sublease space that has been added to the market over the past year. On a positive note, development remains high with 1.4 million square feet underway and tenant demand is picking up. There was 355,000 square feet of new leasing activity this quarter, compared to 214,000 square feet last quarter, signifying that the office market is beginning to rebound.
Office vacancy increased to 11.8 percent this quarter, as more sublease availability and new speculative vacancy were added to the market. The Gahanna/Airport submarket saw a substantial vacancy increase to 22.28 percent due to AEP, Intermedix and EASi vacating a combined 127,000 square feet there. Vacancy decreased to 7.32 percent in the Polaris submarket as Quest Business Centers, Matrix Engineering and Fusion Alliance occupied space in 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 943,082 square feet– a strong indication that tenants are staying active in the market.
CONSTRUCTION ACTIVITY >>
New development remains steady in the office sector. There is currently 1,413,399 square feet under construction - 200,000 square feet more than at this time last year. The highly anticipated Arlington Gateway project broke ground this quarter, projected to complete in 2023. Both phases of the CoverMyMeds HQ are underway, with the
220,000-square-foot first phase expected to finalize this summer. Phase II of Gravity is also slated for a 2021 completion and will offer 167,000 square feet of office space. There was one completion this quarter in Central Ohio. The speculative portion of the Reach on Goodale project was finalized, with preleasing from two tenants. Throughout the coming year, as many as six projects are expected to complete around the city.
SALES ACTIVITY >>
This quarter, 13 office properties totaling 334,000 square feet sold around the Columbus region. The total sales volume reached $30 million, with an average price per square foot of $105. Activity is expected to rise, as 178 office properties totaling 3.5 million square feet are currently for sale. Viking Partners purchased 3100 Easton Square Pl. for $18.6 million, making it the largest sale of the quarter. Hammes Partners sold 6670 Perimeter Drive to an undisclosed LLC for $14.5 million, or $288 per square foot. 6465 E Broad St. was sold by Equity to Demag Property Group for $2.13 million in an investment sale.