Research & Forecast Report
COLUMBUS | OFFICE
As the world continues to feel the effects of the ongoing COVID-19 pandemic, the Columbus office market recorded negative net absorption of 48,300 square feet in the second quarter. The 1 million+ square feet of new sublease space that has been added to the market since Q2 2020 has driven the vacancy rate up to 12.12 percent. Central Ohio is showing signs of recovery, with development and leasing activity picking up significantly this year. With 1.2 million square feet of product underway and a 5.4 percent QoQ increase in leased square feet, the office sector is demonstrating its resilience and beginning to rebound.
The vacancy rate rose to 12.12 percent this quarter, as various companies consolidated offices and more sublease availability was added to the market. The New Albany submarket saw a substantial vacancy increase to 14.26 percent due to State Farm vacating their 148,000-square-foot building there. Vacancy decreased to 16.21 percent in the Easton submarket as Goosehead Insurance relocated to the area and Jet Edge expanded in their current building.
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 1.04 million square feet– a strong indication that tenants are staying active in the market.
CONSTRUCTION ACTIVITY >>
With 1.19 million square feet currently under construction around the region, development remains steady. The highly anticipated Arlington Gateway project is underway and secured 73,000 square feet of preleasing this quarter. The first phase of the Scioto Peninsula mixed-use development is expected to complete in 2022. The first building of Grandview Crossing will finalize next quarter and will be occupied entirely by BMW Financial Services. There was one completion this quarter in Central Ohio. The first of two buildings in CoverMyMeds’ new headquarters was finalized and sold in a record-setting $120 million investment sale. Throughout the coming year, as many as six projects are expected to complete around the city.
SALES ACTIVITY >>
This quarter, 17 office properties totaling 857,000 square feet sold around the Columbus region. The total sales volume reached $146 million, with an average price per square foot of $139. Activity is expected to rise, as 190 office properties totaling 4.2 million square feet are currently on the market. Qatar First Bank purchased 910 John St. for $120 million, making it the largest office sale in Columbus’ history. 5150 E. Dublin Granville Road was sold to OhioHealth for $9.75 million, or $117 per square foot. Wupek Properties purchased 6480 Busch Blvd. from Grubb Properties for $3 million in an investment sale.