CHART OF THE MONTH: FLEX MARKET RENT GROWTH

Written by: Stephanie Morris

Stephanie specializes in research capabilities, providing support for the Colliers Columbus Office, Industrial, Retail and Capital Market 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. Keep reading for her take on how flex rent growth reflects a market split between legacy and modern product.

Flex Rent Growth Reflects a Market Split Between Legacy and Modern Product

Columbus’ industrial flex market continues to show resilience despite what appears to be mixed movement in asking rents. At first glance, the latest data suggests softening conditions, with average asking rents for available space declining to $10.21 NNN while first-year lease rates increased 1.8% year-over-year to $10.73 NNN. The divergence says less about weakening demand and more about the type of product currently available in the market.

Over the past six years, both net and gross flex rental rates have trended steadily upward. Average starting NNN rates have increased from $6.89 per square foot in 2020 to $10.73 per square foot in 2026 year-to-date, while gross rates climbed from $9.60 per square foot to $14.49 per square foot over the same period. The widening spread between the two metrics highlights the growing impact of operating expenses across older flex inventory.

This pricing dynamic is increasingly tied to the composition of available space. Nearly half of current flex availability was built between 1980 and 1999, while approximately 23% of available inventory was built since 2024. Older-generation flex buildings typically offer lower face rental rates but carry higher operating expenses tied to aging infrastructure and less efficient building systems.

The trend is evident in the widening gap between net and gross rental rates shown in the chart. While NNN asking rents have increased at a measured pace, gross rents have accelerated more rapidly, reflecting rising operating expenses embedded within older buildings. This has created an environment where headline asking rates alone no longer fully capture tenant economics.

Overall market fundamentals remain healthy. Vacancy has held below 4% for two consecutive quarters, availability remains constrained across most submarkets, and annual rent escalations continue averaging roughly 3.5%. Rather than signaling demand erosion, the recent moderation in average asking rents reflects the continued influence of older product within the available inventory pool.