In its latest report, Lee & Associates shared the good news that the demand for industrial space in the Columbus, Ohio, region remains strong, although the market isn’t seeing quite as many sales, developments or new leases as it did throughout 2022.
Lee & Associates’ first-quarter Columbus industrial report says that local developers are currently active in the industrial space and have already delivered more than 7 million square feet of new industrial space in the region, with another 9.9 million square feet of speculative product in the pipeline for 2023.
Despite this, vacancy rates in the region remain at all-time lows, and occupiers are actively seeking spaces in various size ranges.
Several factors are driving the demand for industrial space in the Columbus Region, including the growing trend toward e-commerce, strong regional demographic trends and the development of mega-projects such as Intel and Honda’s electric vehicle battery factory.
Additionally, Columbus is known for having some of the most affordable rents for logistics hubs in the Midwest, and its diverse economy means that no sector dominates more than 18% of the market, making it resilient to economic headwinds.
At the end of the first quarter of 2023, construction activity in the Columbus market exceeded 11 million square feet, with more than 86% of the projects on a speculative basis. However, construction starts have slowed from the previous quarter as developers analyze the potential impact of a recession and the Federal Reserve’s influence on debt markets.
There is a need for more supply for industrial spaces under 600,000 square feet, while there is currently an oversupply of opportunities exceeding 1 million square feet that are nearing completion.
Several new industrial developments have been completed in the Columbus market, including CT Realty’s delivery of 2 million square feet across three buildings (41% preleased), Core 5’s completion of 748,000 square feet in Madison County and 698,000 square feet in Licking County, and VanTrust’s completion of a 446,000-square-foot build-to-suit and a 302,000-square-foot preleased speculative project in Licking County.
Additionally, Hardy World, a Pittsburgh-based developer, began its first project in Ohio with a 123,000-square-foot speculative industrial property in Marysville’s 33 Innovation Park in Union County, Ohio.
Investment sales are also picking up steam in the region, with several transactions taking place, including Prologis’ acquisition of the 582,000-square-foot DHL project, Washington Capital Management’s purchase of two buildings at Saltzgaber Road and Crawford Hoying’s acquisition of a freezer/cooler facility.
In Licking County, Red Rock Developments sold its 1.1-million-square-foot speculative space to owner-occupant Invenergy, a manufacturer of solar panels.
