COLUMBUS—The industrial real estate market in Ohio’s capital city has started off the year with a solid first quarter, and the office sector also continued growing, according to a new report on the first quarter by researchers from Cassidy Turley, a national real estate provider that, as reported in GlobeSt.com, recently expanded its presence in the state’s industrial market. They attribute the boost in net absorption to Ohio’s recovering jobs market.
“Nationally, Ohio had the second highest job gain in January with more than 16,000 jobs, including 8,000 new construction jobs, which is an indicator of overall economic growth,” said Robin Mitchell, research analyst for Cassidy Turley’s Columbus office, in a prepared statement. She was not available for further comment by deadline, but GlobeSt.com will post an update later in the week. “The local job rates offer optimism in the business community, which bodes well for both the industrial and office sectors in Columbus.”
Cassidy Turley said that the overall industrial vacancy rate in the metro area dropped to 7.32% in the first quarter, with net absorption totaling more than 2-million-square-feet. Bulk market buildings were the most popular with users, and accounted for about 1-million-square-feet. The Southeast submarket led the area with 859,530-square-feet of absorption; Out of County, 404,331; Northwest, 301,690; and Southwest, 289,670.
“The time is right for speculative construction in Columbus as tenant demand remains strong and vacancy rates continue to fall,” the researchers found. “However, existing warehouses will have the advantage to meet demand when space is vacated as many tenants are working with short timelines and cannot wait for new builds.”
Other firms that study the market agree with Cassidy’s overall assessment. JLL recently pegged the market’s industrial vacancy rate at 7.0%, an all-time low. In a typical transaction, the Opus Group just signed Seattle-based SK Food Group for the last remaining 180,000-square-feet of space at the 496,000-square-foot Opus Business Center at Rickenbacker 7 in suburban Groveport.
The metro area’s long run of quarters with positive absorption and decreasing vacancy has been helped by increased build-to-suit activity. Prologis recently signed a build-to-suit agreement with SpeedFC, Inc., an e-commerce firm, for a 770,000-square-foot distribution facility in Etna. The company built the structure in their Prologis Park 70 Etna industrial park near I-70 and Port Columbus International Airport.
Furthermore, “central Ohio’s office market continues on a positive path with direct vacancy down and positive absorption up in the first quarter of 2014,” according to Cassidy Turley. The Northeast market absorbed 32,500-square-feet, while downtown had 28,000-square-feet of positive absorption. Class A and B buildings had a total vacancy rate of 16.38%, with direct vacancies down to 14.95% compared to last quarter’s 15.11%.
“As the office market continues to strengthen, confidence grows in speculative office space development,” Cassidy Turley noted. “Expect to see more organic growth from local businesses seeking larger spaces to either upgrade facilities or relocate to more vibrant areas of Columbus.”