The 126,022-unit metro Columbus apartment market ended the second quarter with a 6.1% vacancy rate, down 30 basis points from the prior quarter and down 190 from the second quarter of 2011. Construction has been active here, adding 10,865 units in the nine years ending in 2010. Net absorption, at 4,661 units in that time span, was enough to keep vacancy within reasonable bounds; the rate highest in the current cycle was the recession-induced rate of 9.2% seen in 2009. Reis forecasts new construction from 2012 to 2016 at more than 6,000 units, but net absorption, totaling 8,524 units will more than keep pace as vacancy falls toward 5.0%. Rents are picking up here. Reis reports second quarter average asking and effective rents of $714 and $674 per month, up 1.0% and 1.2%, respectively, over the quarter and 2.6% and 3.4% over 12 months.
Office Market Remains Stuck in the Mud
The 31.5-million-square foot Columbus general purpose, multi-tenant office market posted an 18.4% vacancy rate in the second quarter of 2012, Reis reports. This rate is down 10 basis points over the quarter and 50 year-over-year. Any drop in vacancy is welcome, but Columbus has had high, double-digit vacancy for the past decade. Rents continue to struggle. Reis reports average asking and effective rents of $17.78 psf and $14.13 psf, each up 0.1% from the prior quarter. The year-over-year gain is 0.6% for both measures. Effective rents fell one cent in July.
Zero Construction Isn't Helping Retail
The 27-million-square foot Columbus community-neighborhood shopping center market finished the second quarter of 2012 with a 15.7% vacancy rate, up 20 basis points for the quarter and down 40 over 12 months. Net absorption totaled 74,000 square feet from 2002 to 2011, while new construction saw 2.2 million square feet added in that time span. This is a fairly small construction amount even for a modest market like this, but demand could still not make much of a dent. There were no community-neighborhood shopping centers completed in 2011, and none are on tap for 2012, according to Reis’ latest construction data. The first quarter’s positive net absorption of 93,000 square feet has already been more than halfway undone by the second quarter’s negative 50,000 square feet.