COLUMBUS, Ohio (COLUMBUS BUSINESS FIRST)–Columbus’ industrial vacancy rate fell to an all-time low in the third quarter, according to a Colliers report.

The updated 2.78% vacancy rate is due in part to Columbus’ proximity to the North American population, Mike Linder, senior executive vice president at Collier’s, said in an email.

Columbus is a one-day drive for about 50% of the population.

The record low vacancy rate “further defines Columbus as a borderline primary industrial market, which has historically been limited to very large cities and coastal markets,” Linder said.

The vacancy rate for the second quarter was 3.68%, which was the lowest in Columbus at the time, according to Colliers.

Andrew Weeks, executive vice president at VanTrust, said low vacancy rates could cause tenants to scramble to find space for expansion.

“If there’s not enough available space, tenants might look elsewhere,” Weeks said.

But vacancy rates can change quickly when spaces currently under construction are completed, Weeks said.

“There’s a lot of new buildings underway that I think will change that vacancy rate in upcoming quarters,” Weeks said. “It’ll end up going up and the situation will rectify itself in upcoming quarters, just with the amount of space that’s on the drawing board or under construction right now.

“The vacancy rate is really just a picture at a given point in time that could change the next month. I don’t think it indicates any structural problems or ongoing concerns in the Columbus market – it’s a snapshot in time that shows the Columbus market is a little short on product, but I think it will change in the upcoming quarters as new space gets delivered.”

Twenty construction projects, with a total area of 6.6 million square feet, have been completed this year, with 13.8 million square feet still under construction according to the report. Seven projects, totaling 2.3 million square feet, were finished in the third quarter.

According to the report, notable completed projects include VanTrust’s Rickenbacker Exchange I and Duke’s West Jefferson build-to-suit property.

VanTrust currently is constructing a second building at Rickenbacker Exchange, Weeks said.

Linder said he doesn’t see this industrial boom slowing down until the economy does.

“Developers cannot build fast enough to keep up with the demand,” he said. “Industrial activity is a lagging indicator of the economy.”

More than two-thirds of buildings currently under construction are speculative buildings, according to the report.

Thirty-four industrial properties totaling 4.2 million square feet sold in Central Ohio this quarter, according to the report. The total sales volume was $199 million, which is $6 million more than last quarter’s sales volume.

The report found the most active Central Ohio submarket is in the area around Rickenbacker. That market has 83,557,891 square feet of total inventory, with a direct vacancy rate of 1.53%, according to the report.

The quarter’s largest purchase was made by Vault Realty, which spent $42.9 million on a 1.2 million-square-foot space at 2893 W. Fair Ave, according to the report. The largest lease signed was Exel Inc., a logistics company that does business as DHL Supply Chain. It signed for 582,400 square feet at 1417 Rail Southern Ct.

Year-to-date net absorption also hit a record high of 11.9 million square feet, according to the report.

However, Linder said that while he expects the growth to continue, labor shortage and supply chain issues will continue to be an issue for the next 18 months.

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