Suburban office rent projected to plateau in 2016
Office vacancies in the suburbs reflect increasing focus on collaborative space.
The Columbus suburban office market will most likely hit a rent ceiling in 2016 due to large companies like Nationwide and Verizon shifting spaces and leaving vacancies behind, says Dan Wendorf, managing director at Jones Lang LaSalle. The Downtown market, on the other hand, will continue to attract tenants and see rent increases.
JLL reports that in the fourth quarter of 2015, the total Columbus office vacancy was 13.1 percent of a 30.3-million-square-foot inventory.
But that doesn't necessarily suggest Columbus business is waning. One factor leading to vacancies in the suburbs, and also Downtown, is the nationwide collaborative office trend.
"The metric per employee has been 225-200 square feet per employee. Our corporate clients are looking for that range to now be somewhere at 150-175 square feet per employee," says Andrew Batson, manager of research & analysis at JLL. "The actual work station might be getting slightly smaller, but the collaborative space and breakout rooms, there's an increased focus on that."
Contrasting the office market ceiling is the rent rise for Columbus warehouse space, which has increased to an average of $3.50 per square foot.
Batson says, "While there is rent growth, the rents in Columbus are still far below the national level-roughly a dollar per square foot (below) for warehouse distribution space," says Batson, calling this a "major advantage" for Columbus concerning national site selection.