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 supermarkets
Q4 vacancy rate decreased 24 basis points to 3.63 percent
Regional Summary
The Columbus retail market saw significant positive absorption this quarter, with a slight vacancy rate decrease from last quarter to 3.63 percent. The retail market is experiencing a supply-demand imbalance, with tenants facing limited options for high-quality space due to low levels of new development. Macroeconomic headwinds continue to affect consumer sentiment as rising prices weigh on spending. This economic pressure also impacts retailers, contributing to an uptick in store closures. While retail demand has remained robust in recent years, we anticipate a potential normalization in absorption rates going forward.
Leasing activity has remained steady despite macroeconomic conditions affecting other real estate sectors. Just 411,374 square feet of space is under construction, representing 0.4 percent of the total market inventory. The biggest leases that were signed this quarter were Best Buy, who renewed 35,873 square feet at 1645 River Valley Circle N in the Lancaster submarket, followed by Party City, who leased 12,000 square feet at 1300-1428 River Valley Blvd. in the Lancaster submarket. E-commerce integration continued to be a focal point for retailers. Additionally, prime retail locations in Columbus remained sought after, reflecting sustained investor confidence. Columbus is well-positioned to maintain balanced market conditions. Limited supply-side pressure and a growing consumer base will support retail demand despite the potential risks of high interest rates on consumer spending and new business formations.
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 630,411 square feet delivered over the past 12 months. Elevated construction financing costs weigh on construction activity, leading to the lack of construction. The Well is the most significant development under construction and a recreational center in Hilliard. Mixed-use developments include much of the new space coming online in recent months. Two significant mixed-use developments are under construction, Trueman Blvd. and The Blakely, feeding into the national trend of more work-and-play developments. Sixty percent of construction activity is concentrated in the Hilliard and Grandview Heights submarkets.
Check out the full Q4 2024 Retail Trends report here!
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