COLUMBUS—The Columbus metro area has kept pace with the overall economic recovery and the office market has started to feel the impact of the expanding employment rolls. According to a new report from DTZ, it experienced positive absorption of nearly 100,000 square feet in the first quarter of 2015 – almost four times the square feet absorbed last quarter. But most impressive was the performance of the speculative office space.
“With delivery of 131,500 square feet of speculative development, 82% already has been leased,” says Robin Mitchell, DTZ research analyst. “We expect that demand for office space, fueled by job growth, will continue throughout the year.”
Central Ohio has the lowest unemployment rate of any metro area in the state, DTZ reports. The unemployment rate for Columbus is now just 4.3%, down from 5.4% one year ago. “The office real estate sector has been slow to recover, but is poised to have a breakout year with robust job creation driving many companies to seek out more office space.”
The metro area's vacancy rate of 16.15% is the lowest first quarter rate since 2009 and an improvement over last quarter's 16.24%. Downtown saw its vacancy rate drop to 15.86%, a drop of 110 bps since last quarter.
Downtown leasing got a boost from deals in the Arena and Central Business districts, and the delivery of the Joseph, a mixed-use project with 48,500 square feet of office space that is 100% leased to Pizzuti, Drive Capital, Klarna Group, QICParc, and Industrious Limited. In the Northeast submarket, the Daimler Group delivered the 43,000 square-foot Waters Edge III, now 100% leased by NiSource.
And it seems likely that users will continue to make 2015 a robust year. “There is almost 400,000 square feet of speculative office space under construction and set to complete this year,” DTZ notes. “Additionally, over 300,000 square feet of speculative office space is set to start this year, helping to add opportunities for companies looking to expand, or re-locate in the near future.”
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to asset-and-logo-licensing@alm.com. For more inforrmation visit Asset & Logo Licensing.
