Downtown Office Vacancy Rates Now Lower Than Suburbs
Over 232,000 square feet of vacant Downtown office space was leased and taken off the market in 2014, dropping the vacancy rate from 15.1% in the first quarter of the year to 13.2% in the final quarter. The drop brings the number below the overall suburban office market vacancy rate, which is currently pegged at 13.4% for the region.
“I don’t remember it being that low in a long time,” said Marc Conte, Deputy Director of Research, Planning & Facilities at Capital Crossroads Special Improvement District.
These facts and figures were unveiled this week in Capital Crossroads’ quarterly Downtown Economic Development Update. The report provides a snapshot of the residential, commercial and public improvements made to Downtown Columbus.
Conte says that the low vacancy rates are driving additional office construction Downtown. He points out that the former Columbia Gas building was emptied out in 2014, adding nearly 240,000 square feet of empty space to the market, and yet the rate still dropped.
The improved office vacancy rates for Downtown also compare favorably to our regional counterparts Cleveland and Cincinnati, which carry a 17.5% and 19.5% rate respectively. The average lease rate for Downtown commercial office space in Columbus is $18.43 per square foot.
The report from Capital Crossroads shows that most of the development under construction Downtown takes the form of residential or mixed-use buildings, though several significant new office additions are under way. The 250 High Building will contain 135,000 square feet of new office space upon completion, which is already 60% leased to tenants including NBBJ Architecture and Resource/Ammirati digital marketing agency. The City of Columbus is expected to break ground this summer on a new eight-story 180,000 square foot office building for city services. Nationwide Realty Investors is also working on converting the historic Buggyworks building in the Arena District into a 130,000 square foot office building, which is scheduled to be completed this fall.
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