Research & Forecast Report
COLUMBUS | INDUSTRIAL
The Columbus industrial market finished 2021 with a strong fourth quarter, posting 3,455,921 square feet of net absorption. This brings year-to-date net absorption up to 15,367,522 square feet and vacancy down to 2.16 percent - both records for Central Ohio. 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 and distribution space. Construction continues to rise, as there is over 15 million square feet of product currently underway and 45 million square feet in the pipeline. Columbus can expect continued activity throughout the new year as COVID-19 fuels demand in the industrial sector.
Another quarter of positive net absorption drove the vacancy rate down from 2.78 percent to 2.16 percent. The largest vacancy of the quarter occurred in the Southeast submarket, as a tenant vacated 85,000 square feet at 2315 Creekside Pkwy. The East submarket saw the most significant overall decrease in vacancy to 2.71 percent, as Whiplash Logistics and The Superior Group occupied space 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 4.4 million square feet – a strong indication that tenants are continuing to stay active in the market.
Development continues to grow in Columbus, as five projects totaling 3.4 million square feet broke ground this quarter. This brings total product under construction to 15.4 million square feet - the third consecutive quarter with over 10 million square feet underway. Two projects over 1 million square feet broke ground this quarter - The Cubes at Etna and The RIC. Additionally, the Core5 I-70 Logistics Center, New Albany Innovation Park and 3188 Toy Road warehouses broke ground and are expected to complete in 2022. Four properties totaling 1.8 million square feet reached completion this quarter. Ashley Furniture and FedEx’s build-to-suits were both finalized. 5770 Saltzgaber Road completed and was preleased by Go Direct and the Urbancrest Infill 100 project was finalized and leased by DecisionOne. With 90 projects comprising of over 63 million square feet either under construction or in the development pipeline, Central Ohio can expect more large completions in the new year.
This quarter, 55 industrial properties totaling 9.9 million square feet sold in Central Ohio for a total sales volume of $762 million. This total is $550 million higher than the sales volume last quarter. The average price per square foot reached $90. Kohlberg Kravis Roberts & Co. L.P. purchased 4077 and 4337 Airbase Road in a portfolio sale for $131.75 million, making it the largest sale of the quarter. 514 Exchange Way was sold for $93 million, or $91 per square foot. Blackstone REIT bought 3051 Creekside Pkwy. for $68 million. The warehouse at 8320 Global Way SW was sold to Ashley Furniture for $57 million in an owner-user sale.