Q4 2022 Industrial Real Estate Report: Columbus, OH
Specializes in providing actionable insights into the commercial real estate space for investors, brokers, lessors, and lessees. He covers quarterly market data reports, investment strategies, how-to guides, and top-down perspectives on market movements.
Columbus is known for its pioneering art scene and thriving tech sector, contributing to its unique culture.
The city’s unemployment rate declined quarter-over-quarter from 3.3% to 3.1%, lower than the national average of 3.5% in Q4 2022.
Year-over-year, the metro population of Columbus grew by 1.24%.
Overall, industrial real estate in Columbus performed positively with increased inventory, declining vacancy, and rising rental rates.
General Area Overview & Demographics
Columbus is the most populous city in Ohio, with a population of 906,528. The racial demographics are White (69.9%) and Black or African American (26.5%). The remaining population consists of Asians (2.8%), Native Americans (0.3%), and other ethnicities (1.5%). The Hispanic or Latino population was 6.7%.
Columbus, OH Median Household Income, Education, & Climate
The median household income in Columbus is $53,564. This income level is lower than the national average of $57,652. The poverty rate in the city is 22.4%, which is higher than the national average of 11.8%. There are more individuals living in poverty in Columbus than the state average.
The city is relatively young, with a median age of 33.3 years old. There are more individuals aged 18 to 24 (13.7%) than any other age group, followed by those aged 25 to 39 (26%). The population aged between 40 and 54 makes up 17.2%, while those aged 55 and over make up the remaining 39.4%.
It is home to Ohio State University, a public research university with over 65,000 students. The city also has multiple technical schools and community colleges, such as Columbus State Community College and the Franklin University System.
One of the city’s most recognizable landmarks is the Ohio Statehouse, located in the heart of downtown Columbus. Another popular attraction is the Columbus Zoo and Aquarium, one of the largest in the United States.
Known for its temperate climate, the city’s location in the Midwest makes it ideal for experiencing all four seasons. Summers have an average high temperature of 86°F during July. Winters average low of 20°F during January. Spring and autumn are mild, with temperatures ranging from 40 to 70°F.
Summary of Columbus Industrial Real Estate Performance in Q4 2022
Vacancy declined quarter-over-quarter from 2.21% to 2.10%. This also marked a year-over-year drop from 2.17%.
The Pickaway submarket posted the lowest vacancy of 0%, while the CBD’s was highest at 4.68%.
Madison saw the most significant decrease in vacancy quarter-over-quarter, going from 6.83% in Q3 to 2.79% in Q4. Southeast had the highest increase, from 1.3% to 3.29% from Q3 to Q4.
Net absorption for 2022 was positive, with around 8.9 million square feet. The fourth quarter of 2022 posted nearly 1 million square feet of positive absorption. Southwest went -460,000 for the year, while Licking County accounted for 3.2 million absorbed.
What are industrial rents like in Columbus?
Average industrial rent increased quarter-over-quarter from $6.15 to $6.27 per square foot.
The submarket with the highest rent was Union, recording average rents of $7.82 per square foot. Pickaway posted the lowest average of $4.94. Rents were highest for R&D/Flex space property types.
Purchase & Leasing Activity
Total sales volume reached $370 million across 47 properties, accounting for 2 million square feet in Q4. The majority of sales were for warehouse buildings.
Leasing activity reached 3.6 million square feet in the fourth quarter of 2022. New leases accounted for nearly 70% of that, while renewals comprised most of the remainder.
Notable Industrial Real Estate Deals in Columbus in Q4 2022
Several deals for Columbus industrial real estate properties took place in Q4 2022, including:
- Clear Height Properties purchased 290,000 square feet for $9.6 million.
- Angelo, Gordon, and Co. purchased 57,000 square feet for $4.1 million.
- Brooks leased about 590,000 square feet.
- United Healthcare Services leased about 300,00 square feet.
These are select examples among other activity.
New Industrial Real Estate Development Activity in Columbus in Q4 2022
5.1 million square feet were delivered in Q4, leaving 12.7 million in the pipeline.
Licking County accounted for nearly 3 million square feet of deliveries and Southeast for 1.3 million in the fourth quarter. Pickaway and Madison accounted for the remaining deliveries.
Market Forecast for Columbus’ Industrial Real Estate Market
At the beginning of 2021, vacancy rates for modern bulk projects were nearly 8%. By December 2022, this rate had dropped to 2.5%.
Demand for construction should remain at that level in 2023, complemented by the added benefit of a pipeline totaling 12.7 million square feet to deliver.
With new product lined up and supply and demand remaining strong, the outlook for 2023 looks promising.
Takeaways for Industrial Real Estate Investors
The market for industrial real estate in Columbus is a strong contender for investment in 2023. Due to the high demand, investors should consider small to midsize space.
Stay diligent and happy investing.
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