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 to delve into the key findings of each office report to gain a deeper understanding of the trends driving the Columbus commercial real estate landscape.
Tenant Migration - Where are Tenants Moving?
Tenants are constantly relocating their office space to better fit their needs. Using a points system based on signed square feet, we are able to track where office users are coming and going throughout the city. Check out our tenant migration heat map, and click around to find out more information on the movement within each submarket.
One of the most significant highlights from the Tenant Migration Report is the substantial lease signed by a Government tenant in the CBD submarket, totaling over 31,000 square feet. Notably, all tenants that vacated space in the CBD, Dublin or Polaris areas opted to lease space within the same submarket, underlining a trend of intra-submarket relocation.
Moreover, the report reveals that 40 percent of new leases signed in the market belonged to Law or Technology industries, indicating a strong presence and growth potential for these sectors within Columbus' office market.
High-Rise Report - What's Happening Downtown?
The High-Rise Report paints a nuanced picture of the evolving workplace environment in Columbus. Despite recording negative absorption in the first quarter of 2024, the CBD submarket witnessed a decrease in vacancy rates to 12.10 percent, outperforming the overall market's vacancy rate of 17.44 percent.
Construction activity remains robust in the CBD, with various projects underway, including the Scioto Peninsula, Front and Fulton development, Gravity project and the renovation of the Municipal Light Building. Mixed-use developments, such as 80 on the Commons, The Hayden and North Market Tower, signify a shift towards multifunctional spaces catering to the "live, work, play" lifestyle.
Sublease Activity - Analysis of Office Sublease Space
The Sublease Activity Report highlights the concentration of available sublease space in the Dublin, Easton, and New Albany submarkets. Cardinal Health vacating 5100 Rings Road in Dublin resulted in 406,000 square feet of sublease space, while Upstart's departure from 3075 Loyalty Circle in Easton contributed an additional 240,000 square feet.
Interestingly, sublease availability has doubled since the onset of the pandemic, indicating a response to evolving workplace strategies. However, compared to national averages and top-performing office markets, Columbus exhibits significantly lower sublease availability, suggesting a unique market dynamic.
Predictions
As leases expire, available sublease space is expected to transition into direct availability, potentially influencing overall vacancy rates. Monitoring corporate strategies related to hybrid work will be crucial, as shifting workplace dynamics continue to shape leasing patterns and space utilization.
In conclusion, the insights gleaned from these reports offer valuable perspectives on the Columbus office market's resilience, adaptability and future trajectory. Stay tuned for further updates as the Columbus Colliers office continues to monitor and analyze market trends.
Check out our Q1 2024 Tenant Migration Report, High-Rise Reports and Sublease Activity Report here!