Apr 13, 2022 - Real Estate

Central Ohio is an industrial development "sweet spot"

Illustration of a construction crane lifting another crane, which is lifting another crane, which is lifting another crane.

Illustration: Brendan Lynch/Axios

Housing is not the only real estate market on fire in Central Ohio.

  • The region's large-scale industrial market is seeing record-high occupancy, per a local report from real estate services firm JLL obtained by Axios.

Why it matters: Columbus is in high demand as a key hub of industrial development, which creates a vast amount of jobs throughout our region.

The big picture: The growing world of ecommerce has produced a greater demand for distribution centers to process orders.

  • Companies are increasingly looking to stay domestic in order to avoid international supply chain disruptions. More and more are looking to develop in Central Ohio. But why?

First and foremost, it's our favorable geography, JLL managing partner Brian Marsh tells Axios.

  • An old chestnut says Columbus is within a one day's drive of two-thirds of America's population.
  • Combined with a skilled workforce and the area's freight capabilities by air and train, Columbus is a development "sweet spot," Marsh says.

By the numbers: There's only a fraction of the vacant industrial space available in Central Ohio than the region had a decade ago.

  • Just 1.6% of the 260 million square feet of manufacturing and warehouse distribution space was vacant in 2022 Q1, a record low for the area.
  • Home Depot gobbled up the biggest open spot, a 1.1 million-square-foot warehouse in West Jefferson, while Hollingsworth Logistics and Cardinal Health leased major properties near Rickenbacker Airport.

Zoom out: More than 13 million square feet of space, or 30 times the size of the Ohio Statehouse grounds, is currently under construction across the region.

  • Much of this is speculative development, meaning spaces are built without commercial tenants lined up.
  • Only 12% of the new builds are "preleased," per JLL, though the rest will almost certainly be in high demand over the coming year.

What he's saying: "I think we have a very healthy balance of new construction where demand is," Marsh says, noting these "spec buildings" are built to be flexible for a wide variety of prospective tenants.

  • That's important, since Columbus is likely to see new industries like drone delivery, robotics and electric vehicles continue to develop in our own backyards.

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