Commercial Retail Market Report Q4 2014 - Central Ohio

Central Ohio retail market ends year on a positive note

After a negative start to 2014, the Columbus commercial retail market ended the year on a positive note posting its third consecutive quarter of positive net absorption. The 122,237 square foot gain in occupancy over the course of the year erased the early loss and the overall vacancy rate.

The Northwest and Southeast submarkets posted the largest gains in the fourth quarter with 43,893 and 19,161 square feet of positive absorption, respectively according to the Central Ohio Information Exchange (COCIE). These gains can be attributed to three leases in the Northwest including Planet Fitness, Hockey Stop and Player Bench Corp as well as Save-a-Lot in the Southeast.

Retail activity was slightly down in the fourth quarter, but this is nothing unexpected.

“This is nothing alarming. The fourth quarter is traditionally slower because stores are busy with holiday sales,” said Brian Irwin, director of client services and sales at Xceligent.

Although retail activity was slightly down, there were some unique openings such as Tequila Cowboy in the Polaris area as well as parts of the Easton Gateway opening.

“Fast casual restaurants such as Chiptole also continued to be a heavy trend as well,” said John Royer, Columbus REALTORS® President Elect and President of Kohr Royer Griffith.

Fifty-four leases totaling 224,780 SF of retail space were leased in the tracked data set during fourth quarter. The Columbus tracked data set consists of an inventory of buildings considered to be competitive within the brokerage community.

The overall vacancy rate also returned to 9.4 percent, which is where it started.  Vacancy rates range across the region from a high of 16.9 percent in the Southeast submarket to the Northwest’s low of 4.9 percent, a decrease over the previous year of 70 basis points. The biggest winners, however, were in the surrounding counties, including Madison County’s vacancy rate decreasing 3.1 percentage points to 11.7 percent.

“Columbus is on a very positive trend,” Irwin said of the vacancy trend. “More small space is being leased.  This may be a factor from the improvement in the economy.”

Vacancy will remain steady for the next two quarters and then have a slight increase, Irwin further said. New construction being delivered will affect the rates, but in a positive way.

Demand for inventory is also continuing to improve in central Ohio.

“When vacancy rates drop, developers start to build to meet demand,” said Irwin. “The Polaris area is about to boom again with the new IKEA in 2017 and the outlet malls on exits 36 and 37 off of I-71.”

2015 looks to be a promising year for commercial real estate in central Ohio.

“I’m very optimistic for the Columbus Retail market.  It’s not a traditional market with mom-and-pop stores, but rather national retailers.  I’m excited to see the new developments being announced in 2015,” Irwin said.

Royer commented that he thinks commercial real estate in 2015 will be stable and there may even be a slight uptick in the market.

“I expect 2015 to be a solid year. The exciting announcement of IKEA is a big deal in the Polaris area and may also boast well for Columbus as a whole,” Royer said.

4th Quarter 2014 Retail Overview
4th Quarter 2013 Retail Overview
3rd Quarter 2014 Retail Overview

 For vacancy and absorption purposes, COCIE tracks 377 existing community, convenience, neighborhood, grocery anchored strip and power centers with a minimum of 20,000 SF in the Franklin, Delaware, Union, Licking, Fairfield, Pickaway and Madison counties with a total inventory of almost 39 million square feet.

The entire database includes 4,518 retail records totaling over 108 million square feet and also includes big box retail, regional centers, smaller convenience centers, restaurants, free standing single tenant buildings, fast food properties, etc.

To view commercial properties for sale or lease in central Ohio, visit www.COCIE.org.

To view residential properties for sale, visit
www.Realtor.com.

To view residential housing reports, visit
www.ColumbusRealtors.com/stats.