The office market has been a sluggish one in most Midwest cities. But in Columbus, at least, this sector is showing steady improvement.
That’s the takeaway from Cassidy Turley’s third-quarter Columbus office report, which found improvements in both vacancy rates and net absorption in the third quarter in Ohio’s capital city.
“The Columbus office market is alive and well,” said Robin Mitchell, research analyst for Cassidy Turley’s Columbus office, in a written statement.
How well is the market performing today? Mitchell said that as of the end of the third quarter, the Columbus office market had absorbed more than 330,000 square feet in 2014. That figure matches the office absorption for the entire year of 2013.
The city’s Northeast submarket had a strong showing, absorbing almost 70,000 square feet in the third quarter. A key deal here was Zulily’s lease of 34,000 square feet at Columbus’ Tech Center III.
Columbus’ downtown market, though, saw even more activity in the third quarter, absorbing nearly 120,000 square feet. Excel Inc.’s lease of an additional 22,000 square feet in the quarter was a boon to the downtown market. And Excel’s deal came after the company had already leased 26,000 square feet in downtown Columbus in the first quarter of the year.
At the end of the third quarter, Columbus’ office market had a vacancy rate of 15.6 percent, the lowest since before 2008. The Northeast submarket’s office vacancy rates stood at 13.03 percent, down from 14.48 percent in the second quarter.
Today, almost 900,000 square feet of construction is underway in the Columbus office. This is the most construction activity in this sector since 2008. New expansion projects are now in progress at such key office complexes as Waters Edge, Westar and New Albany Tech.
The biggest project in the office market is The Columbia Gas Building. At 288,000 square feet, it is the largest building under construction in the Columbus market. Construction should wrap on this building in the fourth quarter of this year.