Research & Forecast Report
COLUMBUS | INDUSTRIAL
The Columbus industrial market continued a strong year with a record third quarter, posting 4 million square feet of positive net absorption. The ongoing pandemic has caused the e-commerce industry to grow rapidly over the past 18 months, indicated by an influx of demand for prime warehouse space. Central Ohio has experienced absorption greater than 2 million square feet consecutively in the past seven months, and the current vacancy rate of 2.78 percent is the lowest it has ever been. Construction continues to rise, as there is nearly 14 million square feet of product currently underway. Columbus can anticipate high activity throughout the rest of the year as COVID-19 fuels growth in e-commerce and logistics.
Another quarter of positive net absorption drove the vacancy rate down from 3.68 percent to 2.78 percent. The largest vacancy of the quarter occurred in the Southeast submarket, as a tenant vacated 130,000 square feet at 2200 Fairwood Ave. However, the Southeast submarket saw the most significant overall decrease in vacancy to 1.81 percent, as multiple users leased there.
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 5.1 million square feet – a strong indication that tenants are continuing to stay active in the market.
Development continues to grow in Columbus, as 13 projects totaling 5.9 million square feet broke ground this quarter. This brings total product under construction to 13.8 million square feet - the ninth consecutive quarter with over 5 million square feet underway. The Licking and Southeast submarkets lead activity, each with over 4.8 million square feet of Class A industrial product under construction. Over two thirds of buildings currently underway are speculative projects. Seven properties totaling 2.3 million square feet reached completion this quarter. VanTrust’s Rickenbacker Exchange I was finalized and fully pre-leased. Duke’s West Jefferson build-to-suit is now complete and fully occupied. With over 40 projects comprising of nearly 16 million square feet either under construction or in the development pipeline, Central Ohio can expect more large completions in the fourth quarter.
This quarter, 34 industrial properties totaling 4.2 million square feet sold in Central Ohio for a total sales volume of $199 million. This total is $6 million higher than the sales volume last quarter. The average price per square foot reached $74. Vault Realty purchased 2893 W. Fair Ave. for $42.9 million, making it the largest sale of the quarter. Stockbridge Capital Group bought a portfolio of three Columbus properties, including 3800-3880 Groveport Road which sold for $25.6 million. The warehouse at 1860 Walcutt Road was sold to Lexington Realty Trust for $29.15 million, or $99 per square foot.