Written by: Andrew White
With over 15 years of experience in real estate, Andrew White is a seasoned expert in the field. In this blog, he shares his insights on the current state of the retail market in Columbus. Keep reading to discover Andrew’s perspective on key trends and challenges shaping the industry.
How would you describe the current state of the retail real estate market in Columbus?
The Columbus market remains strong. The vacancy rate is currently 3.67% for the retail sector, which continues to put pressure on available inventory. Class “A” product is in high demand, and we're seeing increased rental rates as a result. National retailers continue to show significant interest in the market. Tenants like Bob’s Furniture, Grocery Outlet, and Crunch Fitness are actively expanding into the area, while concepts like Dutch Bros, Zaxby’s, and Buc-ee’s are getting closer to entering the greater Columbus market.
How has the rise of online shopping and omnichannel retail affected demand for physical retail spaces?
Online shopping remains a disruptor in the Columbus retail market, but retailers are adapting. For instance, Ross now provides a space in its stores for Amazon returns, which allows for customer re-engagement at the store level. While customers will always want physical stores to shop in, how retailers integrate online elements into their businesses is still evolving.
What long-term effects of the COVID-19 pandemic are still shaping the retail real estate market today?
COVID-19 showed us that the retail landscape can change at a moment's notice. We've seen retailers reduce their footprints, with many QSRs (Quick Service Restaurants) focusing more on carry-out business and reducing in-store square footage. Additionally, COVID-related lease protection clauses, especially those related to force majeure, remain a topic of discussion.
What should landlords focus on when trying to attract quality tenants in the current market?
Every landlord has different motives and priorities, so it can be case-specific depending on short- and long-term goals. However, I generally advise seeking tenants with strong credit and a proven operating history (solid sales numbers help!). Re-tenanting a space can be costly, so landlords want to ensure they get it right from the start.
What are the most important factors tenants should consider when signing a retail lease in today’s market?
Priorities will vary by tenant, but growth potential—both within the business and in the surrounding market—is crucial. Other factors to consider include rent and operating expenses, delivery conditions, landlord contributions, ingress/egress, signage and visibility, parking, and co-tenancy.
What do you foresee as the biggest challenges and opportunities in retail real estate over the next 5 years?
One of the most pressing concerns over the next five years is whether the rising rental rates are sustainable. If rates continue to increase, businesses could get “priced out” of their models, leading to closures or higher costs being passed on to consumers. Another challenge I would be mindful of is the high construction costs, whether for new builds or buildouts of existing spaces. High costs for materials as well as higher financings costs for such projects can greatly affect the viability of the opportunity. Over the next 5 years, I’ll be paying special attention to the retailers, landlords/owners, and even municipalities (for development) that can navigate these challenges most effectively.
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