While major industrial and logistics markets capture most of the headlines, industrial occupiers and investors know that dozens of secondary markets are essential to supply chains in the U.S.
Of the 81 industrial markets Cushman & Wakefield tracks, the firm selected five emerging industrial real estate markets outside of primary markets that are markets to watch are based on key metrics from 2019 through 2021, including net absorption, new tenant demand, vacancy, rent growth, construction pipeline and deliveries.
Included in the five is Columbus. Located in a prime region in the Midwest at the intersection of Interstate 70 and Interstate 71, and just 70 miles from Interstate 75, Columbus is supremely positioned to meet industrial demand. Columbus’ demographics have strengthened as the population has climbed by 9.3% during the last 11 years (versus 8.2% for the nation). There’s also a relative affordability of doing business in Columbus, both in terms of the cost of real estate and labor.
Meanwhile, Intel has plans to build two semiconductor facilities on almost 1,000 acres outside of New Albany. The sites will bring 3,000 jobs to the area and should draw interest from suppliers and partners to establish nearby facilities. Construction is anticipated to begin later this year.
From 2019 through 2021, the Columbus warehouse market added more than 26 million square feet (msf) of new supply, responding to industrial demand growth. As of Q1 2022, the inventory now boasts 290 msf of space, making it the 16th largest industrial market in the nation, with another 14 msf of product under development.
Much of the space delivered in the 2019 to 2021 timeframe was speculative, however, major occupiers were behind some notable build-to-suit projects. Demand for new, Class A warehouses has been vigorous — 95% of speculative buildings completed in 2021 were pre-leased prior to completion. In recent years, there has been a major push for industrial development near the Rickenbacker International Airport, a major cargo-focused airport.
Over the last three years, 51 msf of new deals were signed throughout the market, primarily driven by e-commerce, consumer goods and logistics occupiers. This robust demand led to almost 29 msf of net absorption during the same period, 15.7 msf of which was recorded in 2021 alone. As a result, vacancy reached a new low of 1.7%, after declining for seven straight quarters from 5.0%. With available space tightening, landlords pushed asking rents above the $5.00 per square foot mark for the first time on record.
The other four emerging industrial markets included:
For more, check out our “Five Industrial Markets to Watch.”
