Unemployment remains too high. That’s the message from the first quarter 2013 Columbus office market snapshot recently released by Cassidy Turley.
According to the report, Columbus’ unemployment rate stood at 6.4 percent in the first quarter of 2013. That’s not a terrible rate, and is more than 1 percent lower than the national unemployment rate of 7.6 percent.
However, the unemployment rate here did climb slightly from 5.4 percent in the fourth quarter of 2012. And it helps explain the mostly sluggish commercial office market in the Columbus area.
According to Cassidy Turley, the office vacancy rate in the Columbus area stood at 16.6 percent in the first quarter of this year. That’s up 54 basis points from the end of 2012.
When unemployment is high, companies don’t need as much space. And this leads to higher office vacancy rates.
The area’s office vacancy rate wasn’t helped when the 5900 Parkwood Place building in Dublin, Ohio, was left completely empty after Nationwide Insurance left it. This added 165,000 square feet of office space back to the market. This meant that Columbus’ Northwest submarket posted a weak 249,279 square feet of negative absorption during the first quarter of this year.
Leasing activity was slow in the first quarter here, too. Cassidy Turley reported that the biggest office lease of the quarter came when Cardinal Health leased an extra 61,128 square feet at 600 Parkwood Place in Dublin, Ohio.
It should come as little surprise that Cassidy Turley reported that speculative office construction has been non-existent in Central Ohio. The company counted just six major office projects spread out among Columbus’ four submarkets. These projects will bring just 587,900 square feet of new office construction to the region.
