Research & Forecast Report
COLUMBUS | OFFICE
The Columbus office market continues to be impacted by the ongoing COVID-19 pandemic, recording 262,017 square feet of negative net absorption and vacancy of 12.7 percent. A majority of this can be attributed to the 1.4 million+ square feet of new sublease space that has been added to the market since Q2 2020. On a positive note, development remains high with more than 1.3 million square feet of Class A space underway and tenant demand is picking up. With nearly 130 office users actively searching for space, Central Ohio can anticipate an increase in activity in coming months as the market begins to rebound.
The vacancy rate rose to 12.67 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 18.16 percent due to Aetna downsizing at 7400 W. Campus Road. Vacancy decreased to 13.27 percent in the Westerville submarket as various tenants occupied space there this quarter.
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 970,565 square feet– a strong indication that tenants are staying active in the market.
With 1.3 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 already. The first phase of the Scioto Peninsula mixed-use development is expected to complete in 2022. The first building of Grandview Crossing will finalize in coming months and will be occupied entirely by BMW Financial Services. There was one completion this quarter in Central Ohio. The 130,000-square-foot Arena District expansion was finalized and Chipotle moved their corporate offices to part of the space. Throughout the coming year, as many as four projects are expected to complete around the city.
This quarter, 26 office properties totaling 782,000 square feet sold around the Columbus region. The total sales volume reached $36 million, with an average price per square foot of $112. Activity is expected to rise, as 183 office properties totaling 3.7 million square feet are currently on the market. Gasoco Properties purchased 2500, 2550 and 2600 Corporate Exchange Drive for $5.01 million, making it the largest office sale of the quarter. Marimeter, LLC bought 5000 Arlington Centre Blvd. for $5 million. 1776-1780 E. Broad St. was sold to The Village Network for $3.51 million, or $73 per square foot. Bridge Credit Union purchased 10567 Sawmill Pkwy. for $2.3 million.