According to Cassidy Turley’s Third Quarter Office Market Snapshot, 22.7% of the Cincinnati office market is currently vacant. This is a reduction of 20 basis points over last quarter and 110 basis points lower than the third quarter of 2012.
Cincinnati businesses absorbed 63,447 square feet of previously unoccupied space in the third quarter of 2013. This nearly reversed the 67,552 square feet of space that became vacant in the second quarter. Year-to-date, 96,555 square feet of office space has been absorbed. If the year-to-date positive absorption holds up in the fourth quarter, the Cincinnati market will have seen positive absorption each of the last three years.
Just as it was in the second quarter, the overall average asking rental rate in the Cincinnati market, combining class A and B properties, was $18.07 per square foot. The average asking rate for just Class A properties saw a 1.1% decrease. It is now $21.07 per square foot. The report states that the lowering rate was “due primarily to landlords in the Central Business District continuing to offer aggressive leasing packages.”
The Mason sub-market, an area northeast of Cincinnati along Interstate 71, was the strongest sub-market in terms of both office space demand and rent growth. The sub-market saw 76,576 square feet of positive net absorption and 3% rent growth in the third quarter.
In its outlook for the future, Cassidy Turley forecasts that demand for office space will continue to grow. The report projects that there will be 60,000 plus square feet of office space absorbed in 2014 and an additional 120,000 plus square feet in 2015.
Notable lease transactions in the Cincinnati office market during the Third Quarter of 2013 include:
• Children’s Hospital renewed and expanded a lease on 118,097 square feet at 660 Lincoln Avenue in Cincinnati
• UBS Financial Services renewed a lease on 64,993 square feet at 8044 Montgomery Road in Cincinnati
• Sallie Mae leased 50,000 square feet at 4660 Duke Drive in Mason, Ohio
Notable sales transactions in the Cincinnati office market during the Third Quarter of 2013 include:
• Smith/Hallemann Partners purchased the 566,509 square foot building at 201 East Fourth Street in the Central Business District of Cincinnati for $43.4 million
• UB III LLC purchased the 66,444 square foot building at 1001 DDC Way in Fairfield, Ohio for $7.2 million
• SSP PNG LLC purchased the 60,586 square foot building at 100 Commercial Drive in Fairfield, Ohio for $2.7 million
The full report and more information about Cincinnati commercial real estate can be found at http://www.cassidyturley.com/about-us/markets/cincinnati-dayton