Ohio three largest cities — Cleveland, Cincinnati and Columbus — will all benefit from significant employment gains this year, contributing to a stable retail market, says a Marcus & Millichap National Retail Research Report for 2006.
Columbus should experience the most robust employment growth spurt with 11,000 new jobs and the greatest improvement in vacancies. Marcus & Millichap expects that availability in the area will tighten by 30 basis points to 10.8 percent. There will also be less new product entering the market compared to 2005. Developers are expected to deliver only 1.2 million square feet of retail space this year, a decrease of about 20 percent.
This will cause rents to rise by about 2.1 percent to $12.60 per square foot. Cleveland, on the other hand, will be at the bottom of the list. The market fell four places on Marcus & Millichap's National Retail Index this year to No. 40 out of 42, in part due to a lack of strong residential developments in central Cleveland.
The creation of 9,000 new jobs, however, might still make conditions favorable enough for landlords to increase rents by about 2.7 percent to $15.82 per square foot. Meanwhile, Cincinnati is expected to post a solid performance. The market will see the influx of 8,000 new jobs in 2006 with rising household incomes contributing to high retail demand. As a result, vacancy will fall by 20 basis points to 9.4 percent and rents will post a 1.8 percent increase to $14.45 per square foot.