Written by: Collin Fitzgerald
Collin specializes in research capabilities, providing support for the Colliers Columbus Office, Industrial and Retail groups. He is responsible for executing data reports, maintaining a commercial property database, reporting quarterly trends, performing data analysis and utilizing statistical information to predict future behavior in the market. Continue reading for insights into industrial cap rates over the past 5 years.
*Leases signed in 2019 and 2024 (so far)
In Columbus, Ohio, cap rates for industrial buildings have followed the national trend, declining steadily since 2019. Columbus has emerged as a significant logistics hub due to its central location within a day's drive of major U.S. markets, well-established infrastructure, and a robust labor pool. These factors have made the region highly attractive to e-commerce companies, third-party logistics providers, and manufacturers. The heightened demand for industrial space in Columbus has driven up property values and pushed cap rates lower, especially for newer, Class A facilities with features like high-clearance ceilings and proximity to transportation networks. The cap rate compression in Columbus indicates a strong and growing investor interest in the region, as well as confidence in the long-term prospects of the industrial sector. Properties in less desirable locations or older facilities, however, may still exhibit slightly higher cap rates, reflecting the increased risk or necessary investment for modernization.
The decline in cap rates for industrial buildings nationally and in Columbus signals a robust industrial real estate market, but it also creates challenges and opportunities for various stakeholders. For investors, the lower cap rates mean higher purchase prices and potentially tighter profit margins, which could encourage more focus on value-add opportunities or speculative developments in underserved areas. For developers, the sustained demand for industrial space, especially modern facilities catering to e-commerce and supply chain optimization, offers incentives to expand construction pipelines, although rising costs for land and materials may impact feasibility.