2013 was an excellent year for the Cincinnati industrial market. As companies snatched up more and more space, rents increased and vacancies dropped, reaching pre-recession levels.
In the third quarter, the overall industrial vacancy rate in the Greater Cincinnati area dropped below 7 percent for the first time since 2007. And the market continued to perform very well in the final quarter of the year, as well. Cassidy Turley reports that more than 615,000 square feet of space was absorbed in the fourth quarter, making it the 10th consecutive quarter of positive net absorption.
“Demand for industrial space across Greater Cincinnati was impressive throughout 2013,” said Jarrett Hicks, senior research analyst for Cassidy Turley’s Cincinnati office, in a statement for the press. “Overall net absorption totaled nearly 5.2 million square feet for 2013, signifying the highest level of demand since 2005.”
The overall vacancy rate in the region finished the year at 6.35 percent, compared to 6.55 percent in the third quarter, due primarily to Class B bulk warehouse and freestanding leases in the Northwest submarket. Overall bulk vacancy dropped to 7.1 percent in the fourth quarter, from 7.7 percent in the third quarter. Northern Kentucky continues to have a historically low bulk vacancy rate, currently standing below 2 percent. Freestanding space is also in short supply, with a 5.4 percent vacancy at the end of the year. The office/warehouse market experienced negative absorption in the fourth quarter, but three of Greater Cincinnati’s four submarkets showed slight positive absorption. The overall average asking rent stands at $3.63 per square foot.
According to Cassidy Turley, only three projects totaling 215,000 square feet were delivered in Greater Cincinnati in the fourth quarter, with almost 2.2 million square feet of space still under construction. The high demand for space will lead to a further decline in vacancy, which could then result in an increase in industrial construction in the region in 2014.
Charts courtesy of Cassidy Turley.