Research & Forecast Report
COLUMBUS | INDUSTRIAL
Q1 2022
The Columbus industrial market started the year on a positive note, recording 3,455,972 square feet of net absorption this quarter. The ongoing COVID-19 pandemic has caused already-high demand for industrial space to skyrocket, leading to booming activity from e-commerce and logistics tenants. High leasing activity has driven vacancy down to 1.55 percent and overall asking rates up to $4.61 NNN - both records in the Central Ohio market. Construction activity also remains strong, as there are 26 projects comprising of 13.7 million square feet currently underway. Throughout 2022, Columbus can anticipate consistent demand from tenants, developers and investors as the city solidifies itself as a true U.S. industrial hub.
Vacancy
The vacancy rate declined from 2.16 percent to 1.55 percent in the first quarter due to positive net absorption. The largest vacancy of the quarter occurred in the Southwest submarket to 2.22 percent, as various tenants vacated space there. The Madison submarket saw the most significant decrease in vacancy to 0 percent, as Home Depot occupied over 1 million square feet there.
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 4.6 million square feet – higher than last quarter and a strong indication that tenants are staying active in the market.
Construction
Development continues to grow in Columbus, as two projects totaling 227,000 square feet broke ground this quarter. This brings total product under construction to 13.7 million square feet - the fourth consecutive quarter with over 10 million square feet underway. A design build project for Michael Foods broke ground in West Jefferson for 215,000 square feet and is expected to complete by the end of the year. An owner/user building at 5220 Nike Drive also broke ground for 12,000 square feet and will finalize in Q3 2022. Six properties totaling 1.9 million square feet reached completion this quarter. The Owens Corning and Moen Faucets build-to-suit warehouses were both finalized. New Albany 315 and Green Pointe Landing completed with preleasing. Global Court I and II also reached completion, adding 355,000 square feet of space to the Southeast submarket. With 125 projects comprising of over 65 million square feet either underway or in the pipeline, Central Ohio can expect more large completions in 2022.
Sales
This quarter, 35 industrial properties totaling 2.8 million square feet sold in Central Ohio for a total sales volume of $316 million. This total is $157 million higher than the sales volume at the beginning of last year. The average price per square foot reached $75. Industrial Logistics Properties Trust purchased 8341 Industrial Pkwy. for $117 million, making it the largest sale of the quarter. 5303 Fisher Road was sold to Cantor Fitzgerald Income Trust for $58 million, or $125 per square foot. The warehouses at 2919-2999 Lewis Centre Way and 3103 Agler Road were both bought by Invesco Real Estate Income Trust, for $27.5 million and $20 million, respectively.
