COLUMBUS—Like all big cities of the Midwest, Columbus suffered during the economic downturn, but while markets in Chicago, Wisconsin, Minneapolis and other locations have been on the road to recovery, Ohio's capital has been a bit slower to come around.
Still, “the industrial market strengthened considerably in the last 12 to 24 months, but especially in the last 6 months,” Douglas J. Swain, vice president and general manager of Opus Development Company, LLC, recently told GlobeSt.com.
And according to a recent report by JLL, the Columbus market now has a 7.0% industrial vacancy rate, an all-time low. The metro area's long run of quarters with positive absorption and decreasing vacancy has been helped by increased build-to-suit activity.
For example, as reported in GlobeSt.com, Prologis recently signed a build-to-suit agreement with SpeedFC, Inc., an e-commerce firm, for a 770,000-square-foot distribution facility in Etna. The company is building the structure in their Prologis Park 70 Etna industrial park near I-70 and Port Columbus International Airport.
However, “developers are considering the possibility of building warehouses on a speculative basis and tenants are seeing a change in economics and concessions from previous years,” the JLL report states. “Landlords who used to offer steep concessions to attract or secure a deal are now dialing back their concessions and seeing an increase in rental rates overall.”
Still, JLL cautions that “although the market is more favorable to owners than it has been at any time since the Great Recession, owners do not yet have the luxury of having multiple deals compete for the same space.”
With the vacancy rate hitting a historic mark, JLL does not expect the long-term decline to continue. However, “the current market conditions are expected to hold strong.”
Above all, Columbus should continue to see an increase in the development of e-commerce, distribution and manufacturing projects.
Although it would be difficult for Columbus to parallel the extraordinary level of distribution development recently seen in Indianapolis, Swain said, it has its own advantages. “Indianapolis has access to the Chicago market, which helps drive development, but for Columbus, proximity to the East is the most important. If you're looking at your distribution model and you ship a lot of products east, Columbus is a great location.”
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Brian J. Rogal
Brian J. Rogal is a Chicago-based freelance writer with years of experience as an investigative reporter and editor, most notably at The Chicago Reporter, where he concentrated on housing issues. He also has written extensively on alternative energy and the payments card industry for national trade publications.
