COLUMBUS, OH - The central Ohio office market rebounded in 2012 as industrial activity continued its slow pace of recovery, according to a new report from Cassidy Turley.

The "Annual Market Report 2013: Insight and Analysis of Central Ohio's Commercial Real Estate Markets," shows the effects that years of an uncertain political and economic climate has had on the office and industrial markets. "The challenges of 2012 have been weathered and the Central Ohio commercial real estate market is poised to take advantage of opportunities that exist in our market today," says Cassidy Turley Managing Principal Tom McGarity. Despite question marks surrounding the presidential election and fiscal cliff, the office market still saw a healthy amount of buying and leasing activity in 2012, the report says. The local economy and transaction volume continued to increase last year, the report says, with new office construction topping activity. Almost 1 million SF of office space was scheduled to begin construction, with varying completion dates. Central Ohio's inventory is spread across four major submarkets: the Downtown/Central Business District and the three suburban submarkets in the Northwest, North and Northeast. Investment sales in 2012 saw increased action in the early stages of the year but quieted in the second and third quarters while recovering in the fourth. After a stellar 2011 in which all four submarkets closed out the year with positive net absorption, 2012 provided a solid follow-up as the year cosed out with 299,584 SF of positive net absorption.

In the vacancy area, the office market closed out the year at 15.31%, besting 2011 by 68 basis points. As a result of the declining vacancy rates, the Columbus market saw a significant boost in asking rent throughout the four markets.

Meanwhile, industrial activity throughout central Ohio continued its slow pace of recovery throughout the fourth quarter of 2012, the report said. Uncertainty related to the presidential election and the fiscal cliff had a noticeable dampening effect on the sector, according to the report. Despite slow leasing activity, sales were strong as sizable deals closed at the end of 2012. Construction activity also picked up as build-to-suit and speculative projects kicked-off. And after a slow start, investment sales picked up too. Vacancy rates remained constant from the third to fourth quarter at 9.15%, a 12 basis point drop since the third quarter. After 105,500 SF of net positive absorption from 2010 to 2011, last year saw more than 2.75 million SF of net positive absorption taken off of the market. The bulk industrial market mirrored this trend as it saw high net positive absorption. In the four submarkets, nearly 1.7 million SF of positive net absorption was recorded. By historical standards, sale prices are very low, the report says, but sales activity and increasing prices are evidence that values are rebounding. The average price for Class A industrial properties has increased by over 18% from 2011, and values should continue to improve this year, the report asserts. In 2012, there was a renewed interest in build-to-suit projects. Several firms are considering new construction as existing building supply has declined. While more expensive than existing buildings, some companies appear to be favoring new construction because of their modern amenities and full 15-years of tax abatement. For 2013, Cassidy Turley expects the central Ohio industrial market will continue to improve at a measured pace.