Heartland Real Estate Business - Columbus, OH Industrial Market Update -October 2010 Issue

The industrial market in Columbus continues to have plenty of vacant space, but due to its location within a 1- day truck drive of 50 percent of the United States population and its strong logistics infrastructure, the market is seeing activity from large users.  The vacancy rate at the end of the first quarter was 12.8 percent, which is a slight decline from the fourth quarter of 2009.  There is almost no new construction except for a few build-to-suit projects compared to the area’s peak of 5.4 million square feet of new industrial space constructed 2008.  The majority of the build-to-suits are taking place at the Rickenbacker Global Logistics Park and in West Jefferson, Ohio, just west of Columbus. 

Columbus’ logistics infrastructure includes the Rickenbacker Global Logistics Park, which is within a Foreign Trade Zone that offers tax advantages, inland customs and other benefits.  Additionally, Rickenbacker just completed a new intermodal facility and upgrades to the rail lines in which they raised bridges to accomodate double stacked freight cars from the deep water port in Norfolk, Virginia to Columbus.  Now freight can clear customs in Columbus, which saves time and money.

Major tenants moving into space in 2010 were Nabisco with 1 million square feet, Kraft Foods’ 973,000 square foot deal and Coty’s 523,965 square foot move.  The average asking rate in the first quarter was $3.20 per square foot net, which is a 1.8 percent decrease from the end of 2009.

Ohio is focused on attracting distribution, manufacturing, and technology based companies by showcasing its strengths in logistics and incentives programs.  One such program is Ohio Third Frontier, a $3.2 billion initiative program, that will provide support for these companies by increasing the availability of early-stage equity investment capital, providing internship programs, and providing other financial assistance to the industry. 

Brad Kitchen, President of Columbus, Ohio based Alterra Real Estate Advisors LLC