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 his take on market trends in the Columbus retail sector.
Key Takeaways
Over 96 percent of tracked retail properties are leased
Majority of construction deliveries were freestanding properties
Q2 vacancy rate increased to 3.67 percent
Regional Summary
The Columbus retail market saw small negative absorption this quarter, with a slight vacancy rate increase from last quarter to 3.67 percent. Limited availability is a critical factor in the lower absorption trend, as tenants need help finding high-quality space following several years of historically low development activity. Consumers are still impacted by macroeconomic headwinds in Columbus, with higher prices of goods and the looming possibility of another recession all weighing on spending. Higher costs also impact retailers, leading to higher store closures. While demand for retail space has remained healthy in the last few years, it could trail to more typical levels. Leasing activity has remained steady despite macroeconomic conditions affecting other real estate sectors. Just 650,000 square feet of space is under construction, representing 0.5% of the total market inventory. With build-to-suit projects driving most of the construction activity in the market, just 25% of the space under construction remains available. The biggest leases that were signed this quarter were Slick City, who took 32,143 square feet at 1170-1194 Polaris Pkwy in the Polaris submarket, followed by Where Ya Bin, who leased 28,400 square feet at 6000-61000 Sawmill Rd in the Dublin submarket. Anchored by a diverse range of businesses, from local boutiques to national chains, the market sustained steady leasing activity. E-commerce integration continued to be a focal point for retailers. Additionally, prime retail locations in Columbus remained sought after, reflecting sustained investor confidence. As the city grows and diversifies, the commercial retail sector is poised for further innovation and expansion in the quarters ahead.
Under Construction
Retail development activity in the Columbus market has aligned with broader trends in the retail sector. Development activity has been modest over the past decade, with just 300,000 square feet delivered over the past 12 months. Elevated construction financing costs are weighing on construction activity, leading to the lack of construction. Many of the largest properties under construction are build-to-suit, such as the new BJ's Wholesale Club at 100,000 square feet in New Albany, which is the first Columbus area location since 2002. Mixed-use developments include much of the new space coming online in recent months. Ten percent of current under-construction projects are mixed-use, including such developments as Trueman Blvd and The Blakely, feeding into the national trend of more work and play developments.
Check out the full Q2 2024 Retail Trends report here!
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