Some space hard to find as leasing picks up

Steve Wartenberg, The Columbus Dispatch

Leasing of office and warehouse space in the Columbus market is picking up, with occupancy rates slowly working their way back to pre-recession levels, according to reports from two of the region's largest real-estate companies.

"In general, businesses have decided that uncertainty is the new normal, and they're starting to move forward," said Rob Click, the senior managing director of CBRE in Columbus.

The CBRE study found that the vacancy rate for office space in the Columbus market fell to 18.7 percent in 2012 from 18.9 percent in 2011 and 20.4 percent in 2009.

The vacancy rate for the industrial sector, which includes warehouses and distribution centers, dipped to 11.8 percent in 2012 from 13.7 percent in 2011.

"The industrial market has firmed up nicely, and larger spaces - spaces over 500,000 square feet - are hard to find," Click said. "I think we'll see some speculative builds coming in this area."

NAI Ohio Equities also released its annual office- and industrial-vacancy figures. They were slightly lower than those from CBRE, but showed a similar pattern of gradual improvement.

The NAIO Ohio Equities study pegged the occupancy rate for offices in the central Ohio market at 15.6 percent in 2012; for industrial space, it was 8.2 percent.

The reports' rates differ because of different calculation methods and the size of properties included in each report.

"I think the rate of improvements will improve in 2013," said Mike Simpson of the local office of NAI Ohio Equities. "We're adding more jobs here, and the banks are lending more, and we're seeing more construction projects. Apartments are being built, and all this builds upon itself and creates more growth."

Easton, Polaris and the Arena District are three of the area's most sought-after locations for office space, Click said. The vacancy rate for Easton is 15.4 percent; for Polaris, 16.2 percent. The lease rates are high in these areas: $22.68 per square foot in Easton, $19.44 in Polaris.

"Our numbers don't break down the Arena District number separately from the overall Downtown numbers, but they're similar to Easton," Click said. "They're almost out of space in the Arena District."

Simpson said much of the recent improvements come as a result of leasing of existing, empty space.

"The numbers improved because we added very little office space," he said. "There wasn't any Downtown except for the Arena District, and while there wasn't a lot of new space built in the suburbs, there was some new construction."