Q3 2022 Multifamily Real Estate Report: Columbus, OH
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Columbus, Ohio is a growing city with an expanding multifamily market: Its population’s expansion rate hit 10.5% between 2011 and 2021.
Employment is also up this year, seeing a 2.4% increase with over 28,000 jobs added year-to-date. The trade, transportation, and utilities market added 17,000 of those jobs, with leisure and hospitality coming in second, adding over 10,000.
There was also a 40% reduction in income taxes approved by Columbus’ city council for the next 25 years for new jobs created in OSU’s Innovation District.
General Area Overview & Demographics
Columbus is the capital of Ohio and home to a diverse population. As of 2020, it’s ranked 14th in the US by population, with an estimated 899,000 people. Not only is the city a central hub for business with its thriving job market, but it also provides a vibrant arts scene.
The racial makeup of Columbus is 64.0% White, 24.4% African American, 4.8% Asian, 0.2% Native American, 1.8% from other races, and 4.7% from two or more races. The median income for households in Columbus is $44,656, and the median family income is $55,434.
The capital city draws more than 22 million visitors annually, making it one of the top tourist destinations in the Midwest. It’s also home to Ohio State University and several other universities.
Columbus is a vibrant destination full of attractions and activities for the whole family. Popular attractions include the Columbus Zoo and Aquarium and Nationwide Arena, home of the NHL’s Columbus Blue Jackets.
It’s known for its diverse and changing weather. During the summer, the area experiences hot, humid days with temperatures reaching the upper 80s and 90s. In contrast, winter can be quite cold, with temperatures dropping into the single digits.
Summary of Columbus Multifamily Real Estate Performance in Q3 2022
The construction pipeline has slowed, bringing in only 1,780 units so far. However, $550 million in investment activity took place for Columbus’ multifamily properties so far in 2022, while Q3 2021 only saw $454 million.
Occupancy decreased by 1% quarterly and annually, now sitting at 96%. Class A has the lowest occupancy at 95.6%, Class B follows with 95.8%, and Class C leads the way with 96.7%.
What are multifamily rents like in Columbus?
Rent increased by 2.8% in Q3 2022 compared to Q2 2022.
The average rent for multifamily real estate in Columbus currently sits at around $1,235 per month, trailing well behind the national average of $1,715 and costing Americans in the city the lowest percentage of their income.
By the end of 2022, rents are expected to rise to an average of $1,260.
Purchase & Leasing Activity
There was $1.4 billion in total investment volume for Columbus multifamily product in 2021. While 2022 is currently ahead of 2021 by over $100 million in transaction volume year-over-year, rising inflation and interest rates will make it unlikely to pass 2021’s total volume.
The average price per unit has increased by over $7,600, now sitting around $137,000. This figure is still below the national average of $217,000 per unit.
Notable Multifamily Real Estate Deals in Columbus in Q3 2022
Several notable deals for multifamily real estate in Columbus this quarter.
- VennPoint Real Estate’s acquisition of The Green for $70 million;
- Birge & Held Asset Management’s acquisition of Wesbury Park Price for $27 million; and
- Cyclone Investment Group’s acquisition of Crown Pointe for $17 million.
These provide select examples among other sales for Columbus’ multifamily properties.
New Multifamily Real Estate Development Activity in Columbus in Q3 2022
Making up 1% of the total stock, 1,780 units were delivered through the end of July 2022. The Hilliard submarket accounted for 450 of those units.
There are currently over 7,900 units under construction, and another 32,000 are undergoing planning and permitting. Less than 11% of the projects in the pipeline are affordable projects, and high-income renters continue to be the target for new deliveries.
Market Forecast for Columbus’ Multifamily Real Estate Market
Columbus’ multifamily market is expected to have continued job growth, with Intel providing hundreds of construction job openings for their $20 billion facility, Pharmavite spending $200 million on a new space, and Amazon building another data center in Columbus’ submarket Hilliard.
Annual rent is forecasted to grow over 3%, and occupancy is projected to remain between 95% and 96% across all property classes.
Takeaways for Multifamily Real Estate Investors
Columbus, Ohio provides a healthy multifamily market for investors due to its job growth, increasing rents, a moving pipeline, and an average sales price below the national average.
Research and due diligence are always required regardless of positive investment indicators.
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