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. Keep reading for insight into office cap rates over the past 5 years.
*Includes all traditional and medical office transactions over $1,00,000 with published cap rates
In the Columbus area, the cap rates for office buildings have also undergone notable changes since 2019, reflecting local economic conditions and broader market trends. Before the pandemic, Columbus enjoyed a relatively stable office market, with cap rates aligning closely with national averages. However, the shift to remote and hybrid work models has impacted the demand for office space in the city, leading to an increase in vacancy rates, particularly in older or less adaptable office buildings. This shift has caused investors to take a cautious approach toward office properties amid uncertainties about future office space utilization. Despite these challenges, Columbus has benefited from its diversified economy and affordable cost of living, which have helped mitigate some of the adverse effects seen in larger, more densely populated cities. For the Columbus office market, this means a potential opportunity for value-add investments and redevelopment projects to meet the evolving demands of businesses.
For tenants, the upcoming lease expirations present a unique opportunity to relocate to more desirable or cost-effective spaces. Companies looking to expand or upgrade their office environments might find this period particularly advantageous, given the likely increase in available properties. However, the influx of vacant spaces could also lead to higher vacancy rates if not matched by sufficient demand. Overall, the state of the office market in Columbus is poised for significant shifts, driven by these impending lease expirations, necessitating strategic planning from both landlords and tenants to navigate the evolving landscape successfully.
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