Development Remains Strong in Slow Economy
There’s no question the recent economic recession has had a major impact on the commercial real estate industry all across the country. As banks tightened up on lending and businesses in almost every industry faced cutbacks and profit losses, so too did commercial real estate transactions slow down.
Despite the recession and any subsequent cutbacks, development in Columbus, Ohio has remained strong and continues to thrive to this day. Whether it be new residential communities, hotels, office complexes, or retail centers, Columbus has experienced a multitude of new development projects that have carried through the economic slow times.
One of the longest planned projects is the new boutique hotel, four-story office and retail building, and five-story parking garage development in the short north from Columbus-based developer Pizzuti. Plans for this development were first revealed in 2008, and received final zoning approval in March 2012, with a projected opening in early 2014. The hotel, called “The Joseph”, will be a ten-story, 135 room hotel located at 618 N High Street.
The Joseph isn’t the only new hotel development in Columbus. Hilton Hotels is set to open a new Downtown Columbus Hilton Hotel directly across the street from the Greater Columbus Convention Center. The glass and brick facility, which will be connected to the Convention Center via walkway, will open September 2012 and will feature 532 rooms, 48 suites, and 22,800 square feet of meeting space, including a 12,000 square foot ballroom. Not only will the hotel be beneficial for the upcoming NHL All-Star Game hosted in Columbus, it will also provide better accommodations allowing the Convention Center to host more conventions and larger scale gatherings and meetings including the annual Arnold Classic.
Carter, the development company out of Atlanta, Georgia, has announced plans to purchase 2 acres of the Columbus Commons Park, which is the former City Center Mall location, and build 2 six-story buildings with 300 apartments and 23,000 square feet of first-floor retail space.
While the City Center Mall in the heart of downtown ultimately failed, Carter sees an opportunity for residential and retail uses. Scott Taylor, president of Carter has cited the high occupancy rates for downtown Columbus apartments as well as the 2.4% annual rent growth as factors making the area worth redeveloping.
Columbia Gas has announced they are moving into a new two-story 280,000 SF building in the Arena District in downtown Columbus. Nationwide Realty Investors developed the project and will include a brand new 1,200- space parking garage. The interior will be designed by the architecture and engineering firm Moody Nolan Inc.
These are but a handful of the development projects going on in downtown Columbus in recent years. In times of economic recession, it might appear counterintuitive for development to remain strong, but there are several likely reasons for it.
Rising fuel costs and rising expenses in general has shifted the American consumer’s point of view. American’s are still buying goods and services, but a greater emphasis on cost cutting awareness has made consumers more attentive to ways they can be smarter and more efficient in their spending. Downtown areas offer a more dense and compact living area. As a result, many of these downtown developments focus on combining residential, retail, and office space into more confined areas, allowing consumers to live, work, and shop all within a closer radius, allowing them to spend less on gas by walking and riding bike.
Another factor for Columbus has been the volume of long vacant buildings that were ripe for redevelopment opportunities. One prime example of this was the Big Bear grocery warehouse complex in Grandview Heights that sat vacant after the grocery chain went bankrupt. With an empty building and a loss of income, Grandview was desperate to see the area redeveloped into a use that not only brought in income to the city but also made the area vibrant and active.
The resulting redevelopment was Grandview Yard, a Nationwide Realty Investors development that created townhomes, apartments, offices, a hotel, restaurants, shopping, and a fitness center. All these amenities are fit in a pedestrian friendly area allowing for that self-contained experience of living, working, and shopping.
Economic growth is slowly returning to many parts of Ohio. In Columbus, development opportunities are likely to continue growing and reshaping the landscape of residential, retail, and office uses across central Ohio.
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