Graphic: How do rent rates compare in the hottest Columbus neighborhoods?
Columbus is coming off its biggest year of apartment construction in more than a decade. Yet that development has not moved the needle higher on a very low vacancy rate that continues to hover at about 4%.
Developers completed some 3,700 units last year, which represents a modest 1.4% increase in the overall inventory, according to Marcus & Millichap. Construction will continue this year, albeit at a slower pace, with a forecast that calls for the completion of another 2,200 units. Much of that new construction is concentrated in downtown and around the Ohio State University (OSU) campus, which is home to more than 64,000 students.
One of the most notable projects near OSU is the South Campus Gateway redevelopment. Ohio-based Edwards Communities has construction well underway on the first phase and is moving forward with planning and approvals for a second phase.
- Phase one: According to the Columbus Business Journal, Edwards Communities started construction this spring on the Highline, a 144-unit (480-bed) project on N. High Street between 8th and 9th avenues. The five-story building also will include more than 20,000 square feet of retail space and is slated for completion in August 2017.
- Phase two: This six-story building will be located on the block between 16th and 17th avenues. The latest plans for this project call for 170 units, as well as first floor retail space, underground parking, a clubhouse and a movie theater. The developer hopes to have phase two open by fall 2018.
The metro also has seen a number of new luxury apartments built recently with more in the pipeline. For example, the 326-unit District at Linworth located west of Linworth Road and Ohio 315 is slated for completion late this year. Although some developers are offering concessions to speed lease-up on new properties, the strong demand is producing steady rent growth.
Marcus & Millichap is predicting that rents will increase by nearly 5% this year. However, some of those gains are due in part to the completion of the higher priced luxury rentals. Data from ABODO shows that rents near OSU have actually dipped slightly in the last year to average $678 for a one-bedroom and $904 for a two-bedroom.
Despite that decline, the broader rental market is benefiting from a booming economy and strong demand coming from both job and population growth with a metro population that is rapidly approaching 2 million. The local unemployment rate is below the national average at 3.6% with 23,500 new jobs added last year and another 18,900 in job gains expected this year, according to Berkshire Hathaway. Some of the top employers in the metro include OSU, JP Morgan Chase, Ohio Health and Nationwide Insurance.
Although development is taking a slight step back this year, construction activity is expected to continue at a healthy pace given the favorable demographics and economic growth that is occurring throughout the metro.
*Image courtesy of www.columbussports.org