Q2 2025 Columbus Retail Market Report
Highlights
- The retail sector continues to operate under historically tight margins, with the availability rate marking its third consecutive record low year.
- Outpacing national statistics, Columbus ranks among the top 15 major markets nationwide, as rents remain consistently strong, with rent growth at 2.2%.
- As construction starts have trended downward over the past six quarters, the construction pipeline is at a near standstill, with just 0.2% of total inventory currently under construction.
By the Numbers
- Sales Volume: $101M
- Cap Rate: 8.2%
- Market Sale Price Per SF: $155
- Vacancy Rate: 3.9%
- Rent Growth: 2.2%
- Market Asking Rent Per SF: $19.66
- SF Under Construction: 252K
- SF Absorbed: 33.1K
- SF Delivered: (61K) | Q2 2025 | Source: CoStar Group
Demographics
- Unemployment: 4.1%
- Current Population: 2,247,548
- Households: 909,475
- Median Household Income: $81,398
Market Performance
The retail performance of the Midwest metro varies across specific demographics, including asset class, tenant profile, and submarket dynamics. Big-box retailer bankruptcies have driven two consecutive quarters of negative net absorption. With national chains like Big Lots, Joann’s, and Party City vacating spaces well over 10,000 SF.
Despite this, smaller service-based and food-service tenants have backfilled smaller spaces under 5,000 SF, with over 500,000 SF leased in Q2, maintaining overall leasing activity. Demand remains high amid Class A and Class B asset types. Space is limited and competition is high. Class C properties, accounting for approximately 40% of available space, have experienced a slower leasing velocity due to outdated layouts and a lack of appeal.
Submarkets such as Westerville, Hilliard, and Upper Arlington are outperforming core metros, as daytime populations increase and sustain household growth. Specifically, Polaris and Bethel Road availability rates both sit below 2.5% accounting for some of the tightest availability rates across the Midwest.
Market Asking Rent Per SF and Vacancy Rate
Source: CoStar Group
Under Construction
The dramatic pullback in retail construction reflects an overarching theme of speculatively high interest rates and tighter capital markets. The construction pipeline is one of the lowest Columbus has seen in over a decade, totaling around 243,000 SF, with around 60% of pre-leased space. New supply projects are mainly build-to-suit and integrated mixed-use developments in suburban growth submarkets from retailers such as Lucky’s Market, Aldi, and Camping World. The largest delivery in recent months is a 123,000 SF Kroger, located in Plain City and part of a 1,900-acre multi-community development called Jerome Village.
Sales
The market is steadily growing. Q2 property sales reached $75.4 million, up 5.3% from Q2 2024. Private investors are dominating the market, drawn to low availability rates and minimal construction costs. Making up 70% of all sales activity across the market, single-tenant properties, such as QSRs or pharmacies, and shopping centers with below-market rents are of key interest due to their stability. Most sales are priced with healthy cap rates in the mid-6% range.
Major deals included:
- Hillard Square, a Kroger-anchored shopping center, that sold for $8.7 million ($164.30/SF) at a 7.3% cap rate.
- Cincinnati-based Phillips Edison & Company bought Oak Creek Center near Polaris for $20.4 million ($194.32/SF), and local developer, Castro sold the property, which was over 95% leased at the time of sale to tenants such as Sherwin Williams, Fleet Feet Sports, Pulp Juice and Smoothie Bar, and Fit Body Boot Camp.
- Florida-based American Commercial Realty Corporation purchased seven retail centers across the Columbus market, totaling $21.3 million. Two of the centers, Village Center and Beechcroft Center, are located in the Northland area, while the remaining (James Livingston Center, Main Hamilton Center, 5156 E. Main St. Center, Wyandotte Center, McNaughten Center) are in East Columbus.
Sales Volume and Market Sale Price Per SF
Source: CoStar Group
12-Month Market Leaders: Top 10 Performing Submarkets
