2020 YEAR-END BIG BOX REVIEW
Written by: Amanda Ortiz
Amanda Ortiz is the Director, National Industrial Research on the National Marketing & Research team at Colliers. Based in Chicago, Amanda partners with national and local teams to deliver market intelligence initiatives and provide direction to drive national competitive advantage through research strategy, development and analytics. Keep reading for insights on the Columbus big box market.
Home to 17 Fortune 1000 headquarters, 52 colleges and universities and a top 10 city for millennial concentration, the Columbus region is a prime location for industrial expansion. The area boasts a large population of more than 2.2 million people and its economy has begun to rebound. Featuring some of the most resilient job markets during the pandemic, the unemployment rate for the Columbus area was 4.7% at the end of the year.
The e-commerce explosion has also benefited the Columbus big-box market as Amazon and other online retailers occupied large blocks in 2020. The big-box market finished the year strong, posting more than 4.2 million square feet of net absorption at year-end, nearly double the volume of 2019.
Big-box construction completions reached a new record in 2020, delivering nearly 7.7 million square feet of new product to the market. Three buildings larger than 1 million square feet were completed – two of them large fulfillment centers for Amazon. With new development added to the market, vacancy increased to 10.9% but is expected to decrease in coming months as this product is leased. The pipeline in Columbus also remains steady, with nearly 6 million square feet of big-box product currently underway.
Overall rents for big-box properties saw an uptick to $3.75 per square foot NNN from $3.61 per square foot NNN in 2019 due to an influx of new bulk projects. Investment activity picked up in the second half of 2020, with 16 big-box buildings comprising of 8.1 million square feet sold. Discount retailer Big Lots sold their 7.8 million square foot portfolio to Oak Street Real Estate Capital in a sale-leaseback transaction during the second half of the year.
Click here to access the full 2020 Year-end North America Big Box Review.