UPSWING IN OFFICE SALES
Written by: Andrew Jameson SIOR CCIM
Andrew Jameson has 25 years of experience in the sales and leasing of office space as well as investment sales and tenant representation. Andrew’s primary focus has been in the Columbus suburban and downtown office market. His work ethic has led to being awarded virtually every year Co-Star Power broker award, Columbus Board of Realtors – Top 10 producers, and even Colliers national awards (top 5% in the country in production). Keep reading for Andy’s take on the recent uptick in office sales.
Office Sales Activity
While office building sales saw a temporary decline during the summer months amid the COVID-19 pandemic, activity has picked up in the market and looks promising for the months to come. Two major office transactions were recently announced – 65 E State St and 565 Metro Place S. One of Downtown Columbus' most prominent office buildings, 65 E State St, was just sold by Hertz Investment Group for $36.8 million to Canadian-based investment firm, Group RMC, while Priam Properties acquired 565 Metro Place S from The Windsor Companies for an undisclosed amount. These notable sales followed a strong third quarter in which over 1,000,000 square feet of office product sold around Central Ohio. sales included Woodside Capital Partners' portfolio acquisition of 575-615 Copeland Mill Road and 6096-6100 E. for a total of $6.55 million and BaseCamp Recover Center's acquisition of 815 W. Broad St. for $3.5 million.
As highlighted in the graph below, sales activity is trending upwards after hitting a low in Q2 2020. Bolstered by steadily increasing asking rents, office buildings remain a promising investment source. A growing concern, however, is the simultaneously increasing cost of retaining and attracting tenants. While owners continue to invest large sums of money into upgrades from lobbies to roof decks and amenity floors, the competition for modern, Class A space remains high as owners fight to attract stable, elite tenants. With a few additional properties currently on the market, we will likely see an increase in investment volume throughout the fourth quarter and in the first quarter of next year.