Q3 2025 INDUSTRIAL & OFFICE MARKET UPDATE
- Colliers | Columbus
- 4 days ago
- 5 min read
Written by: Stephanie Morris
Stephanie specializes in research capabilities, providing support for the Colliers Columbus Office, Industrial and Retail 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 market trends in the Columbus office and industrial sectors.
Industrial Market Update
Modern bulk demand sustains Columbus industrial growth in Q3 resulting in another quarter of positive net absorption and declining vacancy rate.
Quarter in Review
Leasing activity and continued tenant interest in modern distribution space led to 2.07 million square feet of positive net absorption.
Vacancy rates declined for the third consecutive quarter and are expected to decline slightly by the end of the year with limited supply and continued positive absorption.
Rents reached $7.04 per square foot in Q3 2025, up 0.7% quarter-over-quarter as rent growth continues to moderate. The slowdown reflects the impact of new speculative deliveries.
Modern bulk space continues to command a premium with asking rents 7.4% higher than general industrial product.
Speculative development is gradually returning, with three new projects totaling 738,520 square feet breaking ground in the third quarter. This steady pickup signals renewed developer confidence and sustained tenant demand for mid-sized modern industrial space.
Build-to-suit construction remains a key driver of new supply, as two projects totaling 1.79 million square feet began this quarter. The scale of these commitments underscores the strength of user-specific demand.
Forecast
The Columbus modern bulk industrial market has been the primary driver of leasing activity in 2025, with absorption levels tracking above historical averages. Much of this demand has been fueled by large-scale commitments from solar panel manufacturers, data center contractors, and third-party logistics providers securing space to support regional and national distribution networks.
While demand is expected to moderate through late 2025 and into early 2026, developer sentiment is improving. Recent groundbreakings signal a measured return of speculative activity, particularly in the 100,000–300,000 square foot range. Broader economic uncertainties including interest rate pressures, capital market uncertainties, and slower corporate decision making could weigh on leasing velocity.
Absorption & Leasing
The Columbus industrial market recorded 5.79 million square feet of leasing activity in Q3 20 25. New leases accounted for 61 % of total volume highlighting continued tenant demand for industrial space. Deals in the Southeast and West submarkets represented 62 % of new leasing activity.
Net absorption remained steady with 2.07millio n square feet of positive absorption. The largest occupancies were MEI Rigging and Crating expanding 367,633 square feet at 840 Hilliard Rome Road and a confidential tenant occupying 337,200 square feet at 3538 Tradeport Court. The largest move out of the quarter was McKesson vacating 354,676 square feet at 6500 Adelaide Court in the Southeast submarket.
Vacancy & Market Rents
The total market vacancy rate in Columbus fell by 0.41% quarter-over-quarter but remains 0.37% higher year-over-year. Buildings between 400,000–600,000 square feet recorded the largest decrease in vacancy, dropping 1.85% quarter-over-quarter. This segment is showing signs of recovery as elevated speculative supply is getting leased. This decrease in the mid-size bucket correlates with a decline in modern bulk vacancy, which has decreased 6.46% since its Q4 2024 peak to 10.54%.
Average market rents increased $0.05 to $7.04 per square foot in Q3. The North submarket commands the highest average asking rate at $9.30 per square foot driven by the high concentration of flex and mini bulk product. Modern bulk distribution facilities maintain a 7.4% rental premium over general industrial space.
Sales Activity
Investment activity accelerated in Q3 with total sales volume climbing to $370.5 million and an average price of $123.23 per square foot. The market was influenced by Selco Service Corp.’s $118.8 million acquisition of 6241 Shook Road, a 1.6 million-square-foot warehouse fully occupied by Whirlpool Corporation. The $89.05 million sale of 7409 Mink Street SW points to steady investor interest in newly delivered, fully leased assets. The property delivered in Q3 2024 and stabilized by early 2025, highlighting the market’s capacity to absorb modern industrial product. This performance reinforces Columbus’ positioning as an attractive option for institutional capital.
Check out the full Q3 2025 Industrial Trends report here!
Office Market Update
At the close of the third quarter, the Columbus office market continued to show steady signs of improvement. Tenant demand strengthened in the suburbs with much of the leasing momentum concentrated in Dublin and Arlington/Grandview.
Market rents held steady at $21.66 per square foot and have hovered near the $21 mark since 2023.
The construction pipeline remains modest at 143,944 square feet concentrated in the CBD and Dublin. No new deliveries recorded in Q3.
Investment sales activity slowed, totaling $57.41 million at an average of $95.20 per square foot. Activity led by EOG Resources’ $28.7 million acquisition of 8111–8131 Smiths Mill Road.
With limited construction activity and no new deliveries this quarter, fundamentals are expected to strengthen modestly through year-end positioning Columbus to finish 2025 with vacancy dipping below 18%.
Absorption & Leasing
The Columbus office market recorded 550,659 square feet of new leasing activity in Q3 2025. The largest lease of the quarter was Hexion, which leased 76,522 square feet at 5200 Blazer Parkway in Dublin. Deals in the CBD and Dublin accounted for 50.9% of transaction activity.
Net absorption remained steady with 148,701 square feet of positive absorption. The largest occupancy of the quarter was The Village Network purchasing 2500 Corporate Exchange for owner use. The largest move out of the quarter was the United States Bankruptcy Court vacating 55,195 square feet at 168-170 N High Street in the CBD.
Vacancy & Market Rents
The total market vacancy rate in Columbus fell to 18.23%, a 1.08% quarter-over-quarter improvement from 19.31% in Q2. Several submarkets posted positive absorption signaling sustained tenant demand. Westerville and Dublin captured the largest absorption gains. Westerville recorded the largest decrease in vacancy dropping 3.6% quarter-over-quarter.
The Columbus office market saw a modest decline in average asking rents to $21.66 per square foot quarter-over-quarter. Market rents remain the highest in the Easton ($25.04) driven by its mix of high-end, mixed-use developments. Class A properties maintain a 7.8% premium over Class B assets, consistent with tenant demand for quality space.
Sales Activity
Sales activity slowed in the third quarter, with total volume reaching $57.41 million at an average of $95.20 per square foot. The largest transaction was the $28.5 million purchase of 8111–8131 Smiths Mill Road in New Albany by EOG Resources, Inc. The former Bob Evans headquarters includes a 175,000 square foot Class A office building and a 25,000 square foot warehouse. Additionally, The Village Network purchased 2500 Corporate Exchange in Westerville for $4.3 million.
Check out the full Q3 2025 Office Trends report here!