Written by: Cade Polter
Mixed-use projects continue to be of interest to developers in this changing time.
The Federal Reserve continues to leave rates unchanged until the Federal Reserve sees a significant decrease in inflation.
Columbus City Council will vote on a new zoning code.
President Biden announces the end of his reelection campaign.
Inflation stubbornly still sits at 3%, a percentage point above the target inflation rate of 2%. One more decrease will put us somewhere in the 2 percent, which may sway the Fed towards finally cutting rates.
How This Impacts Commercial Real Estate and the Columbus Market
A mixed-use development is an urban development that combines components such as residential, commercial, recreational, and more to create an integrated community. After the pandemic, the popularity of mixed-use developments significantly increased. The rise of remote work caused many office buildings to be reconfigured into mixed-use buildings. Remote work also increased demand for residential areas with close-by or same-building amenities. Columbus has utilized these types of development in the downtown area and Dublin.
The Federal Open Market Committee (FOMC) meeting on June 11-12 highlighted several key points regarding the U.S. economy and monetary policy. The committee noted that economic activity had been expanding moderately, with strong labor market conditions. Inflation, while moderating, remained above the Federal Reserve's 2% target, primarily due to elevated energy prices and supply chain disruptions. No changes were made to the Federal Reserve rate because of these statistics.
The proposed zoning code in Columbus, introduced in April, aims to create six new mixed-use districts. This will allow for increased building density and height. The new zoning code is expected to unlock the potential for more housing development, addressing the city's housing needs at various price points.
Our Take
July's finish brings us one month away from September and the much-anticipated rate cuts. For the past few months, investors have been pointing to the ninth month of the year to bring a rate cut with it. The Fed has not officially announced a rate cut is coming, but the optimism and eagerness towards one continues to grow. As we approach the 2024 election, investors look for early signs about the winner and how their policies will affect the economy. The candidate shake-up will likely cause uncertainty for longer leading up to the election, likely leading investors to stay on the sidelines for now.
A new zoning code could be huge for the growth of Columbus. With Google, Intel, and Amazon developments outside the city, the suburbs are due for some outward growth. A new zoning code allowing the city to build more and higher residential buildings will likely bring more people and traffic to the downtown area. The upcoming Capital Line project and new DORA requirements are ways to get more of the population to the downtown area as well. All the growth (and growth preparation) points to having a positive effect on commercial real estate, especially in the downtown office sector.
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