Thanks to a fair amount of overbuilding of commercial buildings in the Columbus area, now is a good time to purchase or lease new space.
“It’s definitely a buyer’s market,” says Rick Lombardi, general manager of Turner Construction Co.’s Columbus office.
Lombardi says the vacancy rate downtown is 20 percent, which is higher than in many other Midwest metropolitan areas.
“Vacancy rates in most markets are about 10 to 12 percent, which isn’t good, but Columbus is worse.,” Lombardi says. “The retail sector overbuilt, and with a potential war, people are very concerned about the economy and are not moving ahead with new projects.”
And, he adds, many rental rates are below today’s typical commercial mortgage payments.
Robert White, chairman of the board of The Daimler Group Inc., a real estate development company based in Columbus, says there’s not much speculative development occurring today.
“There is little developer activity,” says White. “Most activity is of the build to suit variety.”
White says when it comes to building, the Arena District has the most activity.
“Westerville is an active market, too,” says White. “And there’s still some activity in Dublin and Easton, but quite a bit less than in previous years.”
“The Arena District is still strong, but other than that, areas are struggling or doing OK, but not great,” he says.
Jeff Copeland, CEO of Elford Inc., a commercial construction company, predicts the commercial construction business will hold steady, doing no better and no worse than it did in 2002.
“Because there is so much uncertainty, we’ll see the market stay about the same as 2002,” he says.
Copeland says the construction industry expanded to meet demand in the ’90s, and now there is excess capacity.
“This makes the market more competitive,” he says.
Copeland says a lot of retail commercial construction business follows home construction.
“Retail building is tied to housing,” he says. “Shopping centers follow new home development. As long as housing stays strong, there will be some retail building.”
All of these commercial construction experts agree that in the next few years, most of the new construction will be of schools and hospitals.
“The new projects we’re seeing are schools — both for suburbs and the city — and the hospitals are all actively building,” says Lombardi. “The Columbus Public Schools bond issue passed, so there will be some significant construction starting, providing opportunities for companies that need the work.”
Copeland and White concur.
“The one area where business will grow is schools,” says White.
But Copeland cautions it may be awhile before construction begins for the Columbus schools system.
“The funds have been approved but the projects are still being considered, so it may be a full year before we see them begin,” he says. How to reach: Turner Construction Co., (614) 781-8550; The Daimler Group Inc., (614) 488-4424; Elford Inc., (614) 488-4000