Lee & Associates: Soaring spec construction barely keeping up with industrial demand in Columbus

Looking for modern industrial space in the Columbus market? That could be a challenge. There simply isn’t enough of it available.

According to the first-quarter industrial report from Lee & Associates, the industrial vacancy rate in the Columbus, Ohio, market dropped to 3.6 percent as of the end of the first quarter. That leaves precious little space for users seeking an industrial base in this key Midwest market.

There is hope, though. Recognizing the strength of this market, developers are adding new industrial space to the Columbus area. Lee & Associates reported that 1.75 million square feet of new industrial construction hit the Columbus market during the first quarter.

At the same time, developers are currently building 4.12 million more square feet of industrial space here. This will make life easier for users seeking modern industrial space in the market.

One of the biggest new industrial facilities hitting Columbus in the first quarter was the 673,920-square-foot spec building delivered by Duke Realty in the Southeast submarket on Rail Court. Hillwood also delivered a major new building, a more than 1-million-square-foot spec building on Tradeport Court in Pickaway County.

The more than 1.6-million-square-foot Sofidel build-to-suit space is also nearing completion, while Becknell Industrial’s second spec building, 324,000 square feet in the Southwest submarket at Southpark Place, is also underway with a scheduled delivery in the third quarter of 2018.

Other big spec industrial developments in progress include the first building in Pizzuti’s Rick West development. This building will cover 802,390 square feet when complete. Meritex’s 250,685-square-foot multi-tenant spec project on Adelaide Court is also under construction.

Meanwhile, VanTrust is moving ahead with two planned spec buildings – 229,333 square feet and 758,160 square feet – fronting Rohr Road east of an Amazon distribution center.

Does all this spec construction mean higher vacancies on the way? The researchers at Lee & Associates don’t think so. Company experts say that demand is high enough to keep the vacancy rate law and asking rents high.

In the first quarter, this has certainly held true. Lee & Associates reported that the average asking rent for industrial in the Columbus market stood at $3.97 a square foot.