HEARTLAND SNAPSHOT, NOVEMBER 2006
Columbus, Ohio Industrial Market
The industrial development market is strong in the Columbus area, with many completed projects being leased up by third-party logistics companies.
Industrial developments currently underway in the area include Pizzuti’s 500-acre Creekside Industrial Center; Duke Realty’s 1,000-acre Rickenbacker Global Logistics Park and Groveport Commerce Center; Kirco’s 230-acre Centerpoint Business Park; OPUS Business Center at Rickenbacker; and Cabot’s Air East, a 754,000-square-foot speculative building. First generation warehouse/distribution buildings with 32-foot minimum clear ceiling heights and other modern features will continue to be in demand.
The majority of development is taking place in the Rickenbacker International Airport/southeast Columbus submarket. This is largely due to the tax-abated land, presence of a Foreign Trade Zone and the new Rickenbacker Intermodal Terminal, which is being developed by Norfolk Southern Railroad. The intermodal facility is being constructed on 300 acres with completion expected in 2007. An additional 1,000 acres will be developed adjacent to the intermodal facility, which will add to the 13 existing industrial parks in the area and create an estimated 20,000 new jobs.
“The intermodal yard should help spur more industrial activity in Columbus, considering the growth of rail shipments over the past 5 years,” says Michael Linder, first vice president in the industrial services group with Grubb & Ellis|Adena Realty Advisors. “The improvements to the Heartland Corridor, a rail corridor that begins at the Port of Virginia and ends in Columbus, along with the improvements to the Port of Virginia and the new intermodal facility at Rickenbacker, should create unprecedented economic opportunity for all ports along this corridor, including the Port of Huntington Tri-State (the seventh largest port and largest inland river port in the United States).”
Recently closed leases in the Columbus market include Whirlpool Corp.’s 740,000 square feet at Creekside XII; Yokohama Tire’s 650,000-square-foot lease at 5945 Opus Dr.; Exel’s 572,000-square-foot deal at Building 752 and its 358,000-square-foot lease at 5765 Greenpointe Dr.; a 500,000-square-foot lease at 2829 Rohr Rd.; Melno Logistics’ 250-square-foot deal at Etna Building I; Genco’s 200,000 square feet at Creekside XIV; and DHL’s 150,000-square-foot lease at Creekside II.
The overall vacancy rate is 10.9 percent, which is almost 3 percent lower than last year at this time and should continue to decline. The older buildings in the market will continue to be at a competitive disadvantage and have higher vacancy rates. Flex space had a vacancy rate of 12.8 percent at the end of second-quarter 2006, which was about the same from a year ago at 12.3 percent. New generation warehouse/distribution space has an average rental rate of $3.25 triple-net per square foot, while older warehouse/distribution product is averaging $2.72 triple-net per square foot and flex space has an average rate of $5.61 triple-net per square foot.
“The improvements to this corridor are an important step to address the growing need to increase capacity by moving freight via rail, considering how rail shipments have increased so dramatically over the past 5 years,” Linder explains. “These improvements will help increase efficiencies for shippers and strengthen Columbus’ importance in the global economy.”
— Kimberly Begley, marketing and research manager in the Columbus, Ohio, office of Grubb & Ellis|Adena Realty Advisors and Curt Berlin of Columbus-based NAI Ohio Equities contributed to the article.
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