Written by: Collin Fitzgerald
Collin specializes in research capabilities, providing support for the Colliers Columbus Office, Industrial and Retail groups. He 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 his take on market trends in the Columbus retail sector.
Key Takeaways
Over 96 percent of tracked retail properties are leased
Majority of construction deliveries were freestanding properties
Q1 vacancy rate increased to 3.6 percent
Regional Summary
The Columbus retail market saw positive absorption this quarter with a slight vacancy rate increase of three basis points from last quarter to 3.6 percent. The limited availability is a key factor in the lower absorption trend as tenants struggle to find high-quality space following several years of historically low development activity. Consumers are still are impacted by macroeconomic headwinds in Columbus, with higher prices of goods, and the looming possibility of another recession all weighing on spending. Higher costs are also impacting retailers, leading to higher rate of store closures. While demand for retail space has remained healthy in the last few years, it could trail to more typical levels. Leasing activity has continued to remain steady despite macroeconomic conditions affecting other sectors of real estate. The biggest leases that were signed this quarter were CVS, who took 27,438 square feet at 775 Neil Ave in the Short North submarket, followed by Crystal Ballroom, who leased 26,407 square feet 1853-1921 Channingway Center Dr in the Reynoldsburg submarket. Anchored by a diverse range of businesses, from local boutiques to national chains, the market sustained steady leasing activity. E-commerce integration continued to be a focal point for retailers. Additionally, prime retail locations in Columbus remained sought after, reflecting sustained investor confidence. As the city continues to grow and diversify, the commercial retail sector is poised for further innovation and expansion in the quarters ahead.
Under Construction
Retail development activity in the Columbus Market has been average in recent years with only 320,000 square feet delivered in the past 12 months. One of the main factors to the lack of construction is the elevated construction financing costs are weighing on construction activity. Many of the largest properties under construction are build-to-suit properties such as the new BJ's Wholesale Club at 100,000-SF New Albany and is the first Columbus area location since 2002. There has also been abundance of mixed-use projects in the past few years and more recently Evans Farm mixed-use development in Lewis Center with multiple buildings adding up to over 100,000 square feet feeding into the national trend of more work and play developments.
Check out the full Q1 2024 Retail Trends report here!