The office market in Columbus, Ohio, is in a state of flux, as large-scale tenants are consolidating and downsizing their real estate footprints. What does this mean for the brokers working the downtown Columbus market? Only that they’ll be plenty busy helping companies meet their evolving office-space needs.
JLL released its most recent Skyline report for downtown Columbus. According to the report, the office vacancy rate in downtown Columbus stood at 18.9 percent as of the third quarter of 2018. That’s up 4.4 percentage points from the same period last year.
Why the increase? Sam Stouffer, research analyst with JLL, said that large occupiers are consoliding their locations and righstizing their real estate footprints. These companies are looking for more modern office space with stronger amenities, a way to attract and retain the best workers.
This approach, though, has resulted in big blocks of available office space opening across the Columbus skyline. And that, in turn, has meant a higher office vacancy rate in downtown.
Despite this gain in vacancy, downtown office space is still attractive, especially as a growing number of workers prefer to live and work in the core of the city. JLL reports that the average direct asking rent for office space in downtown Columbus stood at $22.94 a square foot. That is an increase of 5.1 percent from a year earlier.
JLL also reported that 87,000 square feet of office space is now under construction downtown.
The Arena District remains one of the strongest office markets in the Columbus area, and is now close to full occupancy, JLL says. The story is different in the Capital Square section of town, where large blocks of office space are opening as tenants relocate to more dynamic space. Again, these tenants are moving in an effort to attract and retain the best talent in the area.
To combat this, Capital Square landlords are increasingly investing in building upgrades and amenities, JLL reported.
Brokers can expect more changes in the Columbus office market in the coming months. JLL says that distressed, aging office towers with undersized floor plates might eventually become multifamily buildings as Columbus’ downtown residential boom continues.
