Downtown Office Vacancy Rate Drops to 12.1 Percent
According to the latest data from the Capital Crossroads Special Improvement District, Downtown Columbus saw a continued decline in office vacancy rates, which have steadily fallen from 15.1 percent over the past two years, to a low of 12.1 percent in the fourth quarter of 2015.
While the continued strong demand for office space is noteworthy, it’s doubly significant considering the large amount of new office space that was completed in 2015, which leased up quickly, keeping the market from being oversaturated with new available product. In the second half of 2015, over 800,000 square feet of office space was absorbed.
“It will be interesting to watch what happens with the old Columbia Gas building, which is getting tenants from Capital Square office towers,” said Marc Conte, Deputy Director of Research, Planning & Facilities at Capital Crossroads. “It will also be interesting to watch how those office buildings are filling up again and how quickly that will happen.”
When asked about the possibility of more large-scale speculative office construction, Conte said that the vacancy rate would likely have to drop below 10 percent.
“Now that we’re at twelve percent, there’s probably developers thinking about it in anticipation,” he added. “I think what we will see is more along the lines of what Brett Kaufman is proposing at Two25 Commons, which includes both office and residential.”
Currently, suburban Columbus office markets have an total of 12.4 percent vacancy. Cleveland and Cincinnati have Downtown office vacancy rates of 17.4 percent and 17.7 percent respectively.
To view the full State of Downtown Columbus Year End 2015 Report, CLICK HERE (PDF).