Columbus, OH/USA

Overall office vacancy now stands at 13.71 percent, down from 14.73% at the close of last quarter. Year-over-year comparisons show stark contrast, when vacancy stood at 17.4%. Class A properties continue to show the greatest progress, as three of the four submarkets have a sub 10 percent vacancy rate (Northwest - 8.98, North - 8.53, and Central Business District - 7.53). Total year-to-date absorption for all properties totals 284,061 square feet.

Construction in the Columbus market continues to be heavy as 1.3 million square feet of new office space will be delivered by the second quarter of 2009. The majority of this new development is leased to owner occupants. Only two speculative developments are underway (totaling 249,120 square feet). Two more speculative office buildings are projected to start in the next six months in the Polaris/Westar area totaling 300,000 square feet.

A synopsis for each of the Columbus area Submarkets follows.

Downtown/Central Business District

The Downtown submarket continued to improve in the second quarter of 2008. The direct vacancy rate in the CBD declined in both the Class A and Class B subsets for a combined direct vacancy rate of 11.22%. Both class types also had positive absorption during the quarter, decreasing vacant space by almost 70,000 square feet. Year-to-date net absorption is slightly below 95,000 square feet.

North

Although the North submarket continues to have the highest direct vacancy rate in Columbus, it reported the most significant gains in absorption. Year-to-date, net absorption reached roughly 172,000 square feet. The majority of the absorption came from the submarkets’ Class A subset. In turn, direct vacancy rates, dipping below the 20% mark for the first time since 2006. Direct vacancy for the 52 tracked buildings in the North submarket ended the quarter at 18.52%; the 17 Class A buildings recorded a direct vacancy rate of 8.52%. Asking rates remained steady from the first quarter of 2008.

The majority of the absorption came from the submarkets’ Class A subset. In turn, direct vacancy rates, dipping below the 20% mark for the first time since 2006. Direct vacancy for the 52 tracked buildings in the North submarket ended the quarter at 18.52%; the 17 Class A buildings recorded a direct vacancy rate of 8.52%. Asking rates remained steady from the first quarter of 2008.

Northeast

Market performance slipped slightly in the Northeast during the quarter. Negative absorption and increased vacancy rates came after small positive gains the quarter before. The direct vacancy rate at mid-year 2008 was 16.72%, a modest increase of 14 basis points from the end of 2007. Net absorption year-to-date is also negative by 17,000 square feet. Airport II on Airport Drive had the largest negative affect on the overall direct vacancy and net absorption with 36,000 square feet that became vacant during the quarter. Lease rates remained steady with the average full service lease rate at $18.57 per square foot.

Northwest

Direct vacancy rates for the Northwest submarket lowered to 11.89%, an improvement over last quarter’s 12.61%. The quarter began to make up for the slight slip in absorption and increase in direct vacancy recorded in the first quarter of 2008. Net absorption year-to-date is 23,576 square feet, leaving 874,000 square feet available in the market. Northwest lease rates remained stable.

About Colliers Turley Martin Tucker

One of the nation’s largest privately held, full-service commercial real estate firms, Colliers Turley Martin Tucker (CTMT) handles more than $5 billion in annual real estate transactions and manages over 237 million square feet of industrial, office, and retail space. CTMT has approximately 1,300 associates of which 505 are licensed real estate professionals throughout its regional offices in Cincinnati, Columbus, and Dayton, OH: Indianapolis, IN; Kansas City, MO; Minneapolis/St. Paul, MN; Nashville, TN, and St. Louis, MO. For more information about CTMT, visit our website at www.ctmt.com.

Contact Information

Wayne Henry
614-827-1724
whenry@ctmt.com

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