Columbus, OH Office Market Shows Signs of Improvement

COLUMBUS, OH — Negative net absorption was recorded in the Columbus office market during the first six months of 2009, but a moderation in job cuts suggests that the worst may soon be over for property owners, according to a second-quarter Office Research Report by Marcus & Millichap, the nation’s largest real estate investment services firm.

Specifically, about 40 percent of the office-using positions eliminated during the year ending in the second quarter occurred in the last six months.

“As the onset of an economic recovery seems to be a few quarters away, prospective buyers continue to move cautiously in the market,” says Michael Glass, (top right photo) regional manager of the Columbus office of Marcus & Millichap.

Following are some of the most significant aspects of the Columbus Office Research Report:

· This year, employers in Columbus are projected to eliminate 19,000 positions, a 2 percent reduction; in 2008, 13,400 jobs were cut. Office-using employers will pare payrolls by 8,000 workers, compared with 6,100 cuts made last year.

· Completions will total 345,000 square feet in 2009, following the delivery of 758,000 square feet last year. Planned projects in the market total 2.1 million square feet, an amount equal to 6.4 percent of existing stock.

· Supply growth will be relatively modest, but demand will continue to fall in response to job cuts. This year, vacancy will increase 200 basis points to 20.8 percent on negative net absorption of 518,000 square feet. The vacancy rate rose 90 basis points in 2008.

· In 2009, asking rents are forecast to fall 3.5 percent to $17.14 per square foot, compared with a 1.7 percent uptick last year. Effective rents are projected to decrease 4.6 percent to $13.71 per square foot, following a modest 0.1 percent drop in 2008.

For a copy of the complete Columbus Office Research Report, as well as reports on other markets nationwide, visit our website at http://www.marcusmillichap.com/.

Press Contact: Stacey Corso, Communications Department, (925) 953-1716