Positive Net Absorption in 3Q retail
The Columbus retail market recorded 308,588 square feet (SF) of positive net absorption during the third quarter of 2017, according to the third quarter retail market report from the Central Ohio Commercial Information Exchange (COCIE), which uses Xceligent as its vendor. Compared to the same quarter a year ago, absorption was down 427,713 SF of positive net absorption.
Director of Analytics for Xceligent Kim Begley said the positive net absorption during the third quarter is normal activity for this time of year.
“Factors contributing to this include the Andersons General Store for 147,034 sf at 7000 Bent Tree Blvd and the 144,870 SF building at 5800 Alshire Rd,” Begley said. “Both buildings sold during 3Q 2017, with the 7000 Bent Tree location being a redevelopment project for apartment buildings and the 5800 Alshire Rd. building was purchased by Farber Specialty Vehicles. The former Dicks Sporting Goods store at Easton will be occupied by Sierra Trading Center, Home Goods and Marshalls.”
Mary Bresnahan, vice president at CBRE commented that for smaller spaces, lack of inventory has helped to lease even the more non-desirable sites in the Columbus market.
The total vacancy rate increased from 5.2 percent at the close of 3Q2016 to 6.4 percent at the close of 3Q2017.
According to Begley, the primary influence for the increased vacancy rate has been from the store closings during 2017.
“The Andersons General Store closed both locations in Columbus, Giant Eagle and HH Gregg also closed big box stores in the Columbus market,” Begley said.
Bresnahan said the increase in vacancy rate can also be attributed to the closing of larger big box retailers like Macy’s and Sears, as well as Giant Eagle and Kroger closing their smaller stores to move their customers into new stores.
Weight average asking rents in all specific uses increased from $11.48 per square foot (psf) at the close of 3Q2016 compared to $12.61 psf 3Q2017. The weighted average asking rent is the weighted average quoted as monthly triple net lease (NNN) rent per square foot.
Begley said the increase in weighted average asking rents was influenced by the demand for tenants wanting to be close to the “hot spots” like Polaris, Grandview, Dublin and Grove City.
The freestanding/general specific use performed the best recording positive net absorption of 308,421 SF and the overall vacancy rate of 4 percent at the close of 3Q2017.
Notable net gains in occupancy during the third quarter include the Andersons General Store for 147,034 sf at 7000 Bent Tree Boulevard which is being used a redevelopment project for apartment buildings and the 5800 Alshire Road building which was purchased by Farber specialty Vehicles. The former Dicks Sporting Goods Store at Easton will be occupied by Sierra Trading Center, Home Goods and Marshall’s.
Bresnahan said current trends in commercial retail include smaller unique type retailers.
“This includes Sweetwaters, which is a coffee shop, Lash Lounge, and Warby Parker which are all moving into the Columbus market,” Bresnahan said.
Currently there is 830,000 SF under construction in the Columbus retail market during the third quarter.
According to Begley, this includes thrift stores, discount retailers, gyms, appliance and furniture stores all expanding and opening new locations.
During the third quarter of 2017, 158,526 SF was delivered to the market. The largest delivery was at 3025 Olentangy River Road with a 18,000 SF building which will lease space to a Skyline, Denny’s, chicken franchise and a medical uniform shop. Additionally, there is also a new Aldi building which was delivered for 16,500 sf at 720 W Waterloo Street.
Over 75 leases and over 350,000 square feet of retail space were leased in the tracked data set in the third quarter. The Columbus tracked data set consists of buildings considered to be competitive within the brokerage community.
Begley said that demand for inventory looks good for the remainder of 2017.
“The Columbus retail market has over 830,000 SF under construction and has delivered over 700,000 SF during the 2017 year to date,” Begley said.
According to Bresnahan, it’s difficult to find space under 2,000 SF in most markets.
3rd Quarter 2017 Retail Overview
3rd Quarter 2016 Retail Overview
2nd Quarter 2017 Retail Overview
For vacancy and absorption purposes, COCIE tracks 1,469 existing regional, community, convenience/strip center, neighborhood, grocery anchored strip and Freestanding with a minimum of 10,000 SF in the Franklin, Delaware, Union, Licking, Fairfield, Pickaway and Madison counties with a total inventory of almost 76 million square feet.
The entire database includes 6,383 retail records totaling over 115 million square feet.
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.