Cincinnati Office Investment Forecast
Cincinnati Spearheads Job Growth Among Ohio Major Metros;
Value-Add Buyers Lead Investment Market
Office-using job sector strength bodes well for fundamentals. Cincinnati's employment recovery in the wake of the health crisis has been buoyed by a rebound in professional and business services positions. Sector employers recouped all pandemic job losses, surpassing February 2020 totals by 10,000 jobs entering this year. While the prevalence of remote work options is still a source of uncertainty, leasing has performed reasonably well throughout the crisis, with vacancy roughly 200 basis points below the national average. Corporate relocations and expansions will put downward pressure on availability, including new offices leased by global consulting firm Protiviti and headquarters for biotechnology startup Orange Grove Bio. This year's stock expansion, which is above the five-year average, would ordinarily be a cause for concern; however, the market is observing a substantial amount of office space converted for other uses. One project removed 200,000 square feet from the CBD last year, part of over 3 million square feet removed from the core since 2010. Ongoing conversion activity will offset pressure on vacancy created by new development, and the amount of older space taken off the market improves overall stock quality, further aiding future rent growth.