by Dan Rafter
The vacancy rate in the downtown Columbus office market dropped to 7 percent in the second quarter, according to the latest research from Avison Young. That’s a strong performance, good for a drop of 60 basis points from the same quarter one year earlier.
And the good news in Columbus was just the start of the positives in the Midwest when it came to office markets, according to Avison Young. The company reported that the office vacancy rate in Indianapolis fell to a 10-year low of 14.7 percent in the second quarter, a drop of 240 basis points from the same quarter one year earlier.
In Cleveland, the suburban office market’s vacancy rate stood at a low 11.1 percent in the second quarter. The entire Cleveland office market saw 810,000 square feet of net absorption during the 12-month period from mid-year of 2015 to mid-year of 2016.
And in Chicago, the overall office vacancy rate stood at 13.3 percent. The Chicago area saw such notable transactions as Leo Burnett renewing its 642,000-square-foot lease, CNA leasing 272,000 square feet in a new development and U.S. Cellular’s expansion of its suburban headquarters by 119,000 square feet, bringing its footprint here to 331,000 square feet.
Avison Young reported that average asking rental rates continued to trend higher in the Chicago office market. Average asking rental rates were up 1.1 percent at mid-year 2016 when compared to one year earlier. Class-A rates in both the CBD and suburban markets rose 7.6 percent and 5 percent, respectively.
In Cleveland, rents averaged $19.13 a square foot in the downtown market and $16.39 a square foot in the suburban market.
In Columbus, developers are expected to break ground on 478,600 square feet of new office projects in the third quarter. This includes a nine-story office building in the city’s Short North neighborhood. This will be the first Class-A office building higher than six stories and the tallest building in the arts district.