MIDDLE MARKET HIGHLIGHT, MARCH 2007

Columbus, Ohio
Dan Marcec

The Columbus, Ohio, commercial real estate market has been strong on the industrial side lately, with key industries in the region including logistics and distribution; advancement on the office side of the market is based in business and professional services.

“Targeted industries for the Columbus region include logistics and distribution; office and professional services; and manufacturing and industrial,” says Matt McCollister, vice president of economic development for the Columbus Chamber of Commerce. “Significant development is underway at Rickenbacker, Columbus’ logistics park, which has attracted a number of distribution and warehousing companies that seek space and transportation access.”

According to CB Richard Ellis’ Fourth Quarter 2006 MarketViews, vacancy rates in the industrial sector currently stand at 11.4 percent, while average rental rates in that market are $3.25 per square foot. In the office market, statistics in the downtown sector are slightly higher than the suburban submarkets. Downtown, vacancies are hovering around 18.3 percent and rental rates average $17.98 per square foot, while vacancy rates in the suburban office sector stand at 21.7 percent and rental rates are $16.61 per square foot. Grubb & Ellis Adena Realty Advisors reports that vacancy rates in the Columbus retail sector stand at 10.8 percent, while average rental rates for all retail properties average out to $10.67 per square foot.

Net absorption for the fourth quarter of 2006 is up in some areas. According to Grubb & Ellis, approximately 1.6 million square feet of industrial space was absorbed in the Columbus market in the fourth quarter alone. Major leases contributing to this absorption included First Industrial Realty Trust taking 31,624 square feet at 2829 Charter Street and 25,415 square feet at 2190 Westbelt Drive; Marcus Adams Capital signing on for 50,000 square feet at 4900 Poth Road; and RREEF leasing 48,750 square feet at 5830 Green Point Drive.

In the retail and office markets, Grubb & Ellis reports that positive absorption totaled 529,520 square feet in the retail market, while it remained modest in the office market at 83,873 square feet. In the office sector, two major leases contributing to the absorption were Phillips and Cohen Associates’ lease of 10,014 square feet at 200 East Campus Boulevard and Tim Hortons’ occupation of 17,227 square feet at 4140 Tuller Road.

“Columbus’ technology corridor comprises more than 10,000 acres, making it one of the largest research-based sites in the U.S.,” McCollister says. “The corridor includes Ohio State University and all four of central Ohio’s major hospital systems.”

Companies and organizations situated along this corridor employ more than 50,000 workers, and entities located here manage more than $1 billion in research grants annually in addition to harboring $1 billion dollars in current development proposals. Further, the logistics area boasts 130 million square feet of industrial space and 8,000 acres available for growth opportunities.

Looking toward the future, downtown development is a key initiative of Columbus’ mayor. More than 3,800 new residential units already have been built in this area, and over a 10-year period, the city is prepared to develop 10,000 units of housing, in addition to parks and entertainment venues.

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