CBD: SUBMARKET UPDATE
Written by: Hannah Williams, CPRC
Hannah specializes in research capabilities, providing support for the Colliers Columbus Office, Industrial, Retail, and Multifamily Groups. She is responsible for executing data reports, maintaining a commercial property database, reporting quarterly trends, performing data analysis and utilizing statistical information to predict future behavior in the market. She also assists the marketing and research director on special projects and corporate initiatives. Keep reading to get Hannah’s take on what’s happening in the CBD submarket.
The CBD submarket continues to be impacted by the ongoing COVID-19 pandemic, posting negative net absorption of 203,016 square feet this quarter. A majority of this can be attributed to Nationwide vacating their space at 275 Marconi Blvd. due to employees working remotely. This negative net absorption has increased vacancy to 11.07 percent. Overall asking rates increased slightly to $19.73 in the CBD this quarter. Despite average rates not yet being affected by the pandemic, landlords are expected to slightly decrease asking rents to compete with the influx of sublease space, which could drive overall rates down in the short term. On a positive note, this quarter marks the highest office construction activity in the CBD to date, with 1,090,938 square feet of projects underway. Additionally, tenants are continuing to stay active in the downtown market. The largest lease of Q4 occurred when Burgess & Niple Inc. leased 45,000 square feet at the Scioto Peninsula development, which just recently broke ground. The largest sale of the quarter was also in the CBD – Hertz Investment Group sold 65 E State St to Group RMC for $36.8 million, or $74 per square foot. Columbus and the CBD submarket can anticipate a slow but steady recovery in the new year, as the office sector adapts to a post-coronavirus world.
Tenants in the Market
Colliers | Columbus reports that 46 office tenants are looking for space exclusively in CBD – 17 of which require 10,000 square feet or more. The CBD is the most desired submarket for office tenants in the market. The industrial sector has 7 tenants currently looking to lease or purchase in the CBD, and over half require 20,000 square feet or more. On the retail side, there are 32 users looking exclusively in the CBD and 73 tenants looking in multiple markets, including the CBD.