Properties Sampled 395 | Units Sampled 85,940 | Submarkets 9
3rd Quarter 2014 Columbus Apartment Trends
- Effective Rent $785
- Occupancy 95.8%
- Annual Job Change -700 jobs
- Annual Permits 3,934 units
- Annual Demand 4,575 units
- Annual Completions 4,286 units
3rd Quarter Columbus Performance Highlights
Columbus’s economy was one of the nation’s most stable during the recession, and the metro produced solid growth coming out of the downturn. A main reason for Columbus’ economic health is the fact that Columbus is the home of both the fifth-largest university in the nation (Ohio State University) and the state government. General economic health propped up occupancy rates and spurred along rent growth levels in the Columbus apartment market. That attracted developers to the metro, causing construction volumes to soar to decade-high numbers. As many of those projects have begun to complete, increased supply volumes have started to impact overall fundamentals. On one hand, the metro has seen strong leasing activity among the new properties, which has helped to keep apartment fundamentals in healthy shape. On the other hand, occupancy levels started to slip under an unusually large supply load in 3rd quarter 2014, specifically. Most market segments saw modest-to-moderate rent growth. Looking forward, apartment development will likely remain a limiting factor through 2014, particularly among the 2000+ product age niche and the handful of high-development submarkets. But the impact shouldn’t be especially severe given Columbus’s demographic and economic tailwinds, which makes the Ohio state capital one of the Midwest’s most attractive apartment markets long term.
What changed this quarter? Demand dropped significantly below supply levels in the 3rd quarter 2014, sending occupancy down 0.5 points quarter-over-quarter. While occupancy and rent growth remain in fundamentally solid shape, new supply coming on board are beginning to weigh on this healthy Ohio community. Meanwhile, operators pushed rents 0.5% quarter-over-quarter.
Source: MPF Research, www.mpfresearch.com