Local Real Estate Sector Expected to Remain on Growth Track in 2015
The Columbus chapter of the Urban Land Institute released their 2015 Real Estate predictions last week, providing an industry forecast as to what may take place in the region within the realm of development and construction in the year to come. The report is compiled based on a survey of local real estate professionals, city planners, developers and others within the field. The group generally paints a pretty positive picture of development in Columbus in 2015, with certain sub-sectors performing better than others.
“One of the biggest changes this year is that large industrial/distribution space is the top sector for real estate investment and development, dethroning multifamily rental which had been on top for the last few years,” said Jung Kim, Programs Cochair at ULI Columbus, and Research Director at Columbus 2020. “Multifamily rental is still doing very well, but developers and investors are doing more to distinguish projects by location and quality. I think many want to take a breather after their current wave of projects and see where things are with supply versus demand.”
Currently, the demand for rental housing is showing no signs of slowing in 2014. The Dispatch reported about a new survey earlier this week that says that despite the addition of 4,300 new rental units in the past year, vacancy rates have only continued to fall from 4.5 percent to 4.2 percent, which is also keeping rental prices high.
“2014 has been a good year for real estate in central Ohio, and 2015 looks just as good — but some developers and investors are looking ahead, locking in good, long-term financing at low interest rates and considering projects more carefully,” added Kim.
The types of projects that local developers are shying away from in 2015 include regional malls and suburban office centers. Respondents to the survey indicate that a continued shift to urban centers (in both suburbs and Downtown locations) are driving their decisions to divest in suburban-fringe developments.
When breaking down regional performance, the survey ranks the top sub-markets as Easton, New Albany, Downtown Columbus, Dublin and Polaris in that order. Several interviewees noted that the success of Downtown is due to investment and planning efforts that stretch back over a decade and have set the stage for private development to continue strongly into 2015 and beyond.
“There’s very little land left available in the Short North for redevelopment; all the significant parcels are spoken for,” explained Kim. “This may shift momentum more towards Downtown and other areas around central Columbus.”
For more information and more reports, visit columbus.uli.org.