WHAT'S IN STORE FOR THE COLUMBUS OFFICE MARKET
Written by: Grant Hartman
As a Vice President at Colliers, Grant specializes in office leasing and sales, in addition to contract work and negotiation, in the Greater Columbus area. He is a motivated entrepreneur providing successful solutions for his clients and colleagues. He has been involved in numerous transactions totaling more than $4,865,000 in value, and is currently listing over 500,000 SF of commercial space for lease. Keep reading to get Grant's take on what's in store for the office market this year.
What do you think is in store for the Columbus office market for the rest of 2023?
The Columbus market, in general, compared to the rest of the country, is going to be pretty bullish for 2023. I believe the velocity is going to continue to be strong and continues to grow with companies looking to potentially move or expand in Columbus. Through sublease options, I believe we’ll see more absorption as a whole in our market’s existing product. And newly constructed space will continue to be absorbed at a good pace.
From what we're seeing, there appears to be a strong return to office in early 2023. As major national companies return to office, we see smaller companies making the move as well. Physical occupancy should see a jump.
Sublease space continues to be a hot topic. How are people looking at it now?
A lot of subleases came about from knee jerk reactions to COVID. Much of the sublease space came from firms that just cut space immediately. However, we do see a lot of space that was corporate overflow space. When you tour these spaces now, they really didn’t make sense as they were outdated early 2000s, big cube farm floorplans. That space was already becoming obsolete and COVID gave them good reason to dump the excess space. It pushed decisions on space forward probably five years.
And you must mention jumps to quality when it comes to sublease space. Companies that are right sizing are taking Class A space and paying more per square foot while taking less space and leaving outdated spaces behind.
Call centers and operations centers are one of the biggest sublease providers. They will very likely take the longest to come back if they ever do. If they do make a return, they won't come back in the same space format, which was Class B/C office space. It will require a different feel to which will most likely be cost-prohibitive.
We are now three years from the pandemic. How do you think it compares to where we were last year? What have you seen change?
What we’ve seen here is companies many companies took advantage of COVID to make strategic moves to upgrade office space. This in turn opened opportunities for smaller companies, which is why Columbus is such a great mid-tier, corporate market. You have fourteen or fifteen Fortune 500 headquarters here, and many of those companies contracted overflow space where they could fill big spaces with cubes of workers pre-pandemic. Through the changes COVID presented, we’ve seen this middle growth in the second-generation, Class A space for mid-size companies. We are going to see a lot more of those Fortune 500 players continue to go into a new construction space to get people back in and be able to continue to recruit.