MIDDLE MARKET HIGHLIGHT, MARCH 2010

COLUMBUS, OHIO

Columbus, Ohio, continues to weather the economic downturn, while the market waits for development and transaction opportunities.

The market is not experiencing any particular trends driving construction. Development is much more opportunistic based on the location and specific need for an area. Developers and investors are taking care to vet development opportunities in various areas across the market, so there is no one place or type of development dominating the Columbus market. The area is saturated with many good developers that will become more active as the economy improves.

The recent Grandview Yard will have a dramatic impact on the surrounding area generating significant re-use and redevelopment opportunities. Additionally, Columbus Commons will be a catalyst for central business district retail, an increase in housing stock and perhaps a rebirth of office space in the area. The New Albany, Ohio, area will continue to add critical mass in developed product and jobs, which will give the area even more identity and market strength.

Gambling, the newest proposed industry in the Columbus market, is receiving mixed reviews. The gambling industry will offer new opportunities for developers and investors, but the community has varied feelings about the benefits, or lack thereof, of bringing a casino to Columbus and the impact on the surrounding areas.

Three areas to keep an eye on in the near future include Grandview, Ohio, with its Grandview Yard project, the West Broad area because of future casino development and New Albany due to the opportunity for significant corporate relocation.

Columbus has taken a punch with the economy, but the market has not been hit as hard as many areas. Business decisions affecting real estate are expected to become more definitive as 2010 evolves and businesses gain traction. Leases will be negotiated with a more permanent business plan in mind instead of just to get through the recession. The market still has significant surpluses in most property types, which will suppress development for a while, but by the end of the year, Columbus should feel some sense of normalcy.

— Robert Click is senior managing director in CB Richard Ellis’ Columbus, Ohio, office.

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