Cal Axe

As the world continues to feel the effects of the ongoing COVID-19 pandemic, the Columbus office market recorded negative net absorption of 48,300 square feet in the second quarter. The 1 million+ square feet of new sublease space that has been added to the market since Q2 2020 has driven the vacancy rate up to 12.12 percent. Central Ohio is showing signs of recovery, with development and leasing activity picking up significantly this year. With 1.2 million square feet of product underway and a 5.4 percent QoQ increase in leased square feet, the office sector is demonstrating its resilience and beginning to rebound.

The Columbus office market continues to be impacted by the ongoing COVID-19 pandemic, posting negative net absorption of 351,686 square feet and vacancy of 11.8 percent this quarter. A majority of this can be attributed to the 700,000+ square feet of sublease space that has been added to the market over the past year. On a positive note, development remains high with 1.4 million square feet underway and tenant demand is picking up. There was 355,000 square feet of new leasing activity this quarter, compared to 214,000 square feet last quarter, signifying that the office market is beginning to rebound.

The Columbus office market continues to be impacted by the ongoing COVID-19 pandemic, posting negative net absorption of 278,546 square feet this quarter. A majority of this can be attributed to a rise in sublease vacancy that has come on the market, compared to direct vacant space which has not been hit as hard thus far. The nearly 700,000 square feet of added sublease space this year has driven vacancy up to 11.2 percent in the fourth quarter. However, vacancy for direct space remains stable in comparison, increasing slightly to 9.7 percent mainly due to completed vacant speculative space added to the market. This new construction caused overall asking rates to rise to $19.56 per square foot and Class A rates to increase to $21.43 per square foot. Despite average rates not yet being affected by the pandemic, landlords are expected to slightly decrease asking rents to compete with the influx of sublease space, which could drive overall rates down in the short term. On a positive note, this quarter marks the highest office construction activity to date, with 1,603,649 square feet of projects underway. Additionally, the number of tenants looking for office space increased in the second half of the year from 98 to 121 users, indicating growing demand. Columbus can anticipate a slow but steady recovery in 2021 as the economy recovers and the office sector adapts to a post-COVID-19 world.