Columbus, Ohio, year-over-year rent growth was just 30 basis points below the U.S. average as of March and roughly on par with other Midwestern metros such as Chicago, Detroit, Cleveland and Indianapolis, according to Yardi Matrix spring report.
Columbus had 6,906 apartments under construction as of March, 3,760 of which are expected to come online this year, on top of the 320 units delivered in the first quarter.
“Although occupancy in stabilized properties dropped 50 basis points over 12 months to 95.1% as of January, we expect demand to stay healthy and the average rent to advance 3.6% this year,” Yardi Matrix said in the report.
Columbus downtown resurgence
“The metro added 14,400 jobs in the 12 months ending in February, with education and health services accounting for almost half of the gains.
The city continues to benefit from a downtown resurgence and from numerous corporate expansions and relocations. Facebook announced an expansion at its data center development in New Albany, bringing the total project to 1.5 million square feet, while Google is planning its own $600 million facility nearby. The list of large projects also includes an ongoing $500 million addition at the Easton Town Center shopping center and a proposed 28-story tower set to bring the Hilton Columbus Downtown to 1,000 keys.
Columbus rent trends
- Columbus rents were up 2.9% year-over-year through March, 30 basis points below the U.S. average and roughly in line with other large Midwestern metros, including Chicago (2.7%), Detroit (3.0%), the Twin Cities (3.5%), Cleveland (3.0%) and Indianapolis (3.2%). The average rent reached $961, significantly below the $1,430 national figure. Columbus rent growth lost some steam in the area compared to the year prior: Last March, the 3.7% year-over-year rate was the Midwest’s highest, Yardi Matrix reports.
- Following nationwide trends, the Renter-by-Necessity segment led growth, with the average up 3.3% to $872. Meanwhile, rates in the significantly smaller Lifestyle segment were up 2.2%, reaching $1,302. Rents rose at a faster rate in submarkets outside or very close to the Outerbelt, including Fairfield (6.5%), Groveport (5.8%), Delaware (5.3%), Whitehall (5.2%) and New Albany (4.9%). Despite heavy development, rents in downtown Columbus continue to improve, up 1.3% to $1,332 as of March.
- With Columbus’ population rising at roughly twice the U.S. average over the past five years while multifamily development underperformed against national figures, demand is likely to remain elevated. Although the occupancy rate in stabilized properties dropped 50 basis points in the 12 months ending in January, to 95.1%, demographic expansion should keep demand healthy. “We expect the average Columbus rent to advance 3.6% in 2019,” Yardi Matrix said in the report.