COLUMBUS—The industrial markets in the nation's core cities have been in a recovery mode for several years, but smaller cities across the Midwest have also started to ride the wave. Cassidy Turley, for example, just published data on the Columbus market that show record-breaking low vacancy rates in industrial properties, while positive absorption also remains strong. Furthermore, “construction is booming as demand for space increases, and investors are scooping up every available building,” the firm's researchers say.
“The industrial market shows no sign of slowing down, and Columbus is well positioned to capture the opportunities and ride the momentum,” adds Robin Mitchell, research analyst for Cassidy Turley's Columbus office. “The office market is riding a wave of construction activity, with several future speculative projects on the drawing board.”
The industrial market ended the year with a 6.71% vacancy rate, researchers found, and modern bulk buildings led the way with a rate of just 4.7%, both all-time lows. And for the fifth consecutive year, the industrial market had positive net absorption with more than 4-million-square-feet. Developers played a big role. New deliveries accounted for 2.2-million-square-feet, half of which was speculative.
“Industrial investment sales are heating up, and owners are changing hands, largely in the Southeast submarket,” which now has a vacancy rate of only 3.87% – 198 bps lower than 2013, the firm says. The largest transaction was DCT Industrial Trust's sale of 12 properties to Exeter, seven of which are in the Southeast, for $112 million.
And the robust development activity seen in 2014 should continue in 2015. Kansas City-based VanTrust Real Estate, for example, has just put the finishing touches on Rickenbacker 717, a 717,717-square-foot bulk distribution center on Rohr Rd. in the Southeast market. Columbus, Ohio. VanTrust broke ground on the project, the largest speculative development since the economic downturn, in April 2014. And developers now have 3.6-million-square-feet of industrial space under construction, and more than 2 million-square-feet of that is speculative. “With vacancy rates at all-time lows and demand heating up, developers are taking notice,” Cassidy Turley researchers say.
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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.
