Second quarter sees positive net absorption and demand for inventory remains steady
The Columbus retail market experienced positive net absorption totaling 508,518 square feet of inventory during the third quarter of 2016, according to the third quarter report from the Central Ohio Commercial Information Exchange (COCIE), which uses Xceligent as its vendor.
Director of Analytics for Xceligent Kim Begley explained that the new COSTCO building at 7300 State Route 161, The Shoppes at East Broad, Giant Eagle in Bexley and Hwy 42 Automotive store in Delaware were all factors contributing to the positive net absorption during the 3rd quarter of 2016.
“This activity is normal during this time of year with the construction activity that the Columbus retail market has been experiencing,” Begley said.
Columbus REALTORS® 2016 President John Royer said the positive absorption in the third quarter is due to some optimism with business owners that are currently looking for retail space in the market.
“There also is not any new speculative retail construction going on so space is being absorbed,” Royer said.
At 5.3 percent, the third quarter vacancy rate has declined from 5.9 percent during the third quarter of 2015.
Begley said the slight decline in the vacancy rate is the result of tenants expanding in the market. For the remainder of the year, she thinks that the vacancy rate will continue to decline slightly.
“I think the vacancy rate will remain stable until year end, not much different from this last quarter,” Royer said.
In the overall market, the freestanding building type performed the best during the third quarter with a 3.3 percent total vacancy rate and positive net absorption of 324,819 square feet. The new construction for the COSTCO, Automotive Hwy 42 and the Giant Eagle are all freestanding buildings that contributed to this positive performance.
The Columbus regional retail market has over 900,000 square feet under construction during the third quarter of 2016.
Begley said current trends in commercial real estate include projects that offer a combination of different property types such as retail, office and multi-unit housing.
“Live, work and play in the same area is the current theme,” Begley said. “Th is very attractive to the millennial generation.”
Royer reflected on current commercial trends adding that there are always new food and bar uses, led by new fast quick serve concepts and bars led by the craft brewery fad.
“There are several local lower end close out concepts searching the market for moderately priced space,” Royer said.
The Southeast submarket absorbed the highest levels of net demand totaling 156,402 square feet during the third quarter. Most this positive net absorption was from the COSTCO building for 150,000 square feet.
Over 70 leases and 411,000 square feet of retail space were leased in the tracked data set in the third quarter. The Columbus tracked data set consists of an inventory of buildings considered to be competitive within the brokerage community.
Begley said demand for inventory looks good for the remainder of 2016.
“Currently there is almost 840,000 square feet under construction with over 750,000 square feet that is part of the tracked buildings,” Begley said.
Begley said she predicts the remainder of 2016 and first part of 2017 will remain steady with a slight decline in the vacancy rate.
Royer said he thinks demand will remain steady and absorption over the next couple quarters can remain positive.
“Columbus is an exciting market to be part of and is getting national attention with investment dollars finding its way to Central Ohio from all over the world,” Royer said.
3rd Quarter 2016 Retail Overview
3rd Quarter 2015 Retail Overview
2nd Quarter 2016 Retail Overview
For vacancy and absorption purposes, COCIE tracks 1,469 existing regional, community, convenience/strip center, neighborhood, grocery anchored strip and Freestanding with a minimum of 10,000 SF in the Franklin, Delaware, Union, Licking, Fairfield, Pickaway and Madison counties with a total inventory of almost 76 million square feet.
The entire database includes 6,383 retail records totaling over 115 million square feet.
To view commercial properties for sale or lease in central Ohio, visit www.COCIE.org
To view residential properties for sale, visit www.Realtor.com
To view residential housing reports, visit www.ColumbusRealtors.com/stats