On September 5, 2017, HCDC hosted the 2017 Hamilton County Real Estate Update featuring information from experts in the Industrial, Office, & Retail real estate markets.
Jeff Bender, Executive Managing Director of global real estate firm Cushman & Wakefield, gave a presentation detailing where the current Industrial market stands. According to Bender, demand has exceeded supply for 29 consecutive quarters as far as availability for industrial sites goes. There is currently only a 3.3% vacancy rate in Greater Cincinnati, with the largest sub-market vacancy rate being in the Central part of the region (Cincinnati, Harrison, Norwood, Anderson, Batavia) at 4.4%. With demand so high for space, the cost per square foot has also increased 4.3% year-over-year, to an all-time high of $5.05/ sq ft.
Scott Yards, Senior Vice President at CBRE, Inc., presented information on the Office real estate market in Cincinnati. The region has the lowest overall office vacancy rate in nine years, at 18.5%, which is down from Q2 2016 data of 19.45%. This increased demand for office space has also led to increased lease rates, going from $18.80/ sq ft in Q2 2016 to $19.01/ sq ft currently. Construction of new office space is about half of what it was in Q2 2016, going from 748,878 sq ft to 340,000 sq ft, so it is suspected that less available office space will continue the lease rate increase.
George Flynn, Retail Specialist at Anchor Associates, spoke on the Retail market in Greater Cincinnati as well. Vacancy rates (including sublease) are down 0.4% over Q2 2016. Office space construction is down as well from 188,500 sq ft in Q2 2016 to 33,924 sq ft. Rent has also decreased from $14.13/ sq ft to $13.40, with a continued decrease expected throughout the next year. Online retailers and ecommerce are changing the race of brick and mortar retail real estate. eCommerce sites like Amazon are increasing their industrial footprint (warehousing and distribution), therefore attesting to the increase in Industrial demand and the continued decrease of needed Retail space.