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  • Writer's pictureColliers | Columbus


Written by: Cade Polter

  • Fed Chair Jerome Powell points to strong consumer spending as a key to the U.S. economy heat-up and says to be patient about rate cuts.

  • Inflation numbers released from April finally show a cooldown after a few months of rising.

  • Supply continues to outrun demand in CRE markets, but recent moves hint at a bounce back.

  • New projects around Columbus continue to push growth outlooks in different sectors.

The graphic shows a quarterly comparison between retail property sales in the Midwest and US GDP growth. It highlights the Midwest's crucial role in the overall U.S. economy and shows how fluctuations in the retail property market can reflect similar movements. The significant downturn in the first half of 2020 demonstrates the beginning of the Covid-19 pandemic. As the U.S. economy bounced back with multiple periods of growth, retail sales volume followed and reached a high of over $2.5 million.

How This Impacts Commercial Real Estate and the Columbus Market

The April release of inflation data finally showed a slight decrease from 3.5% to 3.4% after consecutive months of increases. The slowdown is a step in the right direction towards the targeted 2% mark. The job market also pulled back, giving the Federal Reserve precisely what it hoped for. After a few months of similar behavior, we would likely see the first rate cut towards the end of 2024. Before this data came out, Federal Reserve Chair Jerome Powell spoke at a Foreign Bankers' Association meeting and continued to wait for the inflation data numbers to come down before considering any rate cuts.

Microsoft recently acquired more land in the Licking County area just outside of Columbus, continuing its growth with companies such as Amazon and Intel. Google has also broke ground recently on two new data centers. With large companies like these still expanding into new land and spaces, it should encourage others around the area to continue the trend.

Columbus is well known as of late for its growth when many cities were decreasing in size. This trend will continue as many new developments have started in the Columbus region. OhioHealth, The Ohio State University Wexner Medical Center, Mount Carmel Health System and Nationwide Children's Hospital are all in the process of adding new centers all over Columbus. Healthcare at the city level is vital in driving population growth; a city can only hold as many people as it can take care of. Another investment development is happening at John Glenn International Airport. The well-known McDonald's at the airport will now be replaced by an almost $200 million parking garage. The parking addition is a nearly $2 billion airport renovation in response to growing traffic and preparation for continued city growth. "The Capital Line" is a bike and pedestrian path set to go through Downtown Columbus, aiming to give the downtown area a spark of life.

Our Take

Despite the stubborn inflation numbers staying above the 2% target, there still may be hope for a rate cut or possibly multiple by the end of 2024. The European Central Bank is set to lower rates within the next month, which may influence the U.S. to jump to a rate cut sooner than anticipated. It will likely continue to be a waiting game in hopes that the inflation numbers correct themselves towards that 2% target rate. The unchanged rates will continue challenging commercial real estate, with many buyers waiting on the sidelines.

Columbus is still one of the fastest-growing cities in the country, with a young population and a bright future ahead. The new DORA, designated outdoor refreshment area, is now active in Downtown Columbus, so we expect to gradually see more foot traffic towards the Scioto River. As the new norm of hybrid work continues, look for more initiatives like DORA to bring people back to the downtown area.


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