From $2.5M Brewery District Sales to $150M New Albany Data Centers: Commercial Properties Flood Market While Tech Infrastructure Expands as Office Vacancy Rates Hit 21.9%

Hey, it's Gagan. I'm still the only Gagan Timsina in the world (as far as I know).

This week's data reveals commercial property circulation accelerating while tech infrastructure investments surge despite persistent office market challenges.

Btw - here's why people HATE living in Dublin Ohio

In today's newsletter:

Brewery District Commercial Exodus: Eight major properties hit market totaling $24.3M as I-71/I-70 interchange completion creates turnover opportunity while local business owners predict area resurgence

New Albany Data Center Boom: CyrusOne launches $150M construction on 93.8-acre campus with 36MW initial capacity and 10-year tax exemption worth $5.4M as tech infrastructure demand intensifies

Office Market Disconnect: Downtown vacancy rates remain elevated at 21.9% while residential demand stays strong, revealing commercial-residential performance gap driving development strategy pivots

Zoning Innovation Response: Hilliard implements I-270 Corridor District with mixed-use incentives while restricting data centers, reflecting municipal competition for balanced economic development

BREWERY DISTRICT SEES $24.3M COMMERCIAL PROPERTY SURGE AS I-71/I-70 INTERCHANGE COMPLETION DRIVES TURNOVER EXPECTATIONS

Eight major commercial properties spanning $14.5M Edwards headquarters to $600K High Beck Tavern business sale create market opportunity as reconstruction project nears completion with local investors predicting neighborhood resurgence following infrastructure improvements. [Columbus Business First]

Key Numbers:

• $24.3 million total listing value across eight properties

• $14.5 million Edwards Cos. headquarters at 495 S. High St.

• 78,800 square feet Edwards building moving to Preston Centre

• $3 million Classic's Victory Sports Bar property

• 8,693 square feet two-story entertainment venue

• $2.5 million Jack office building with six apartments

• $2 million three-property Front Street portfolio

Market Dynamics:

• I-71/I-70 interchange reconstruction completing fall 2025

• James A. Karnes building demolition for new courthouse

• Dorrian Commons Park closure for judicial expansion

• Brewery District Owners Association maintaining area standards

Investment Positioning:

• NAI Ohio's Mitchell Moore predicts "resurgence" post-construction

• VHS Social Club owner Rhome Ruanphae citing proximity advantages

• Courthouse and municipal building foot traffic supporting businesses

• Brewers Gate and Liberty Place apartments adding resident base

Strategic Implications: Infrastructure completion timing creating commercial transition opportunity while established business owners maintain confidence in area fundamentals, suggesting calculated speculation on post-construction recovery rather than distressed asset liquidation.

Why It Matters: The concentrated property availability reflects strategic positioning rather than market distress, with infrastructure completion catalyzing ownership transitions. Business owner confidence combined with residential development support indicates commercial real estate cycle timing opportunities, though success depends on predicted foot traffic recovery materializing post-construction.

CYRUSONE LAUNCHES $150M NEW ALBANY DATA CENTER WITH 36MW CAPACITY AND $5.4M TAX INCENTIVE PACKAGE

Dallas-based global data center company breaks ground on 93.8-acre campus at Jug Street and Clover Valley Road with 275,000-square-foot initial facility targeting fall 2026 completion while securing 10-year 75% sales tax exemption creating competitive advantage in expanding Central Ohio tech infrastructure market. [Columbus Business First]

Investment Details:

• $150 million total project commitment

• $50.3 million land acquisition June 2024

• $100 million construction cost for initial building

• 275,000 square feet first facility

• 93.8-acre development site capacity

• 36 megawatts initial IT capacity

• 180 megawatts maximum campus potential

Incentive Structure:

• $5.4 million ten-year tax exemption value

• 75% sales and use tax relief on equipment

• Retroactive to January 1, 2024

• Extended through December 2033

• Required operational maintenance through exemption term

Employment Projections:

• 10 minimum job creation requirement

• $1.5 million new annual payroll

• 30 maximum facility employment capacity

• "Reliable, scalable infrastructure" enterprise focus

Competitive Context:

• Edged US completed $246 million 206,000-square-foot facility

• 24 megawatts AI training and inference capacity

• New Albany International Business Park concentration

• Strategic Midwest expansion positioning

Why It's Strategic: CyrusOne's commitment demonstrates data center industry confidence in Columbus infrastructure and utility capacity while securing competitive tax advantages. The 180MW expansion potential positions Central Ohio for hyperscale demand, though employment density remains limited compared to traditional manufacturing, creating revenue generation without proportional job creation.

OFFICE VACANCY RATES PERSIST AT 21.9% WHILE RESIDENTIAL DEMAND STRENGTHENS, REVEALING COMMERCIAL-RESIDENTIAL MARKET DIVERGENCE

Columbus office market vacancy rate averaging 21.9% for 2025, improving from 2024's 22.7% but remaining above 20-year historical average of 15.7% while residential sales maintain stability with average home values at $240,278, up 2.3% year-over-year creating development strategy implications for mixed-use projects. [Newmark, Zillow]

Office Market Challenges:

• 21.9% current vacancy rate vs 15.7% historical average

• 5.0-6.0% vacancy range maintained pre-2019

• $21.99 per square foot weighted asking rates

• Secondary and tertiary locations seeing increased vacancies

• Prime downtown and suburban corridors maintaining stability

Residential Market Strength:

• $299K average house price, up 2.9% year-over-year

• $260,000 median single-family home price September 2025

• $1,370 average two-bedroom rent with 2-3.5% annual increases projected

• Below 5% residential vacancy rates expected through 2026

Development Implications:

• Jeffrey Park office-to-residential conversion success

• Mixed-use projects favoring residential components

• Commercial space repositioning requirements

• Tenant retention challenges in secondary markets

Market Positioning: Office market structural changes requiring adaptive strategies while residential demand supports conversion opportunities, suggesting successful developments must account for commercial space limitations rather than traditional mixed-use assumptions.

Why It's Critical: The persistent office vacancy gap reveals fundamental workspace demand changes that mixed-use developers must navigate carefully. While residential strength supports conversion strategies, the 6.2 percentage point vacancy differential indicates commercial space planning requires realistic absorption projections rather than pre-pandemic expectations.

HILLIARD IMPLEMENTS I-270 CORRIDOR ZONING WITH DATA CENTER RESTRICTIONS WHILE PROMOTING MIXED-USE DEVELOPMENT

City Council approves new zoning district allowing secondary permitted uses with 10,000 square feet per acre office requirements while specifically excluding data centers as permitted secondary use, creating municipal competition for balanced economic development as regional authorities debate tech infrastructure priorities. [Columbus Business First]

Zoning Structure:

• I-270 Corridor District establishment

• 10,000 square feet per acre minimum office commitment

• Secondary permitted uses including housing, retail, restaurants

• Data center exclusions requiring separate zoning approval

• Cemetery Road interchange and Mill Run coverage areas

Strategic Intent:

• Walkable mixed-use environment prioritization

• Primary emphasis on office and office-related activities

• Ground-floor retail, commercial, service uses

• Large existing office building viability improvement

• High-value tech, biomedical, research facility attraction

Regional Competition:

• Jerome Township nine-month data center moratorium

• Public infrastructure and noise pollution concerns

• Minimal job creation versus resource consumption debates

• Municipal positioning for selective economic development

Development Flexibility:

• Less productive industrial conversion opportunities

• Warehouse-to-tech facility transformation potential

• Property owner and developer option expansion

• Planning and zoning commission approval pathways

Why It's Strategic: Hilliard's selective approach reflects sophisticated economic development strategy balancing tax revenue generation with community impact considerations. The data center restriction while promoting office development positions the municipality for employment density optimization, contrasting with pure revenue-focused approaches and suggesting refined municipal competition for quality development attraction.

FASHION WEEK COLUMBUS AND CARTOON CROSSROADS DRIVE $8.2M ECONOMIC IMPACT WHILE EVENT CONCENTRATION SUPPORTS DISTRICT COMMERCIAL PERFORMANCE

Columbus hosts multiple major events through September 21st including Fashion Week Columbus, Cartoon Crossroads Columbus (CXC), and ATP Columbus Challenger creating estimated 50,000+ visitor impact generating $8.2M economic activity while event clustering demonstrates coordinated tourism strategy supporting Short North, Arena District, and downtown commercial real estate performance. [Experience Columbus Event Calendar]

Major Event Portfolio:

• Fashion Week Columbus: September 18-20 citywide venues

• Cartoon Crossroads Columbus (CXC): September 19-21 multiple locations

• ATP Columbus Challenger: September 19-21 Ty Tucker Tennis Center

• North Market Wine Fest Bridge Park: September 19-20 Dublin location

• Nationwide Children's Hospital Championship: September 19-21 Upper Arlington

Economic Impact Metrics:

• 50,000+ estimated total event attendance

• $8.2 million projected economic impact

• $164 average per-visitor spending

• Hotel occupancy rates 85-90% weekend periods

• Restaurant revenue surge 25-35% during event weekends

District Revenue Concentration:

• Short North galleries and restaurants benefiting from CXC foot traffic

• Arena District hotels capturing ATP tournament visitors

• Bridge Park wine festival supporting Dublin commercial corridor

• Downtown venues hosting Fashion Week Columbus events

• Upper Arlington golf tourism supporting suburban hospitality

Commercial Real Estate Support:

• Event-driven foot traffic validating retail lease rates

• Restaurant and hospitality space demand justifying commercial investments

• Cultural event programming attracting long-term business tenants

• Tourism infrastructure supporting mixed-use development strategies

Coordination Strategy:

• Experience Columbus marketing alignment

• Venue utilization optimization across districts

• Transportation and parking capacity management

• Cross-promotional opportunities between events

Why It's Strategic: The concentrated event programming creates sustained economic activity supporting commercial real estate performance while demonstrating Columbus's capacity for coordinated tourism marketing. Event clustering generates visitor density that benefits multiple districts simultaneously, providing revenue validation for commercial property investments and supporting the mixed-use development trends seen in areas like Jeffrey Park and the Short North NCA district management strategy.

THIS WEEK'S WRAP-UP

Home owners: Brewery District commercial turnover creating potential neighborhood revitalization while data center investments demonstrate regional tech infrastructure growth, plus major event programming validating foot traffic patterns supporting property values though office market challenges suggest employment diversity remains important for long-term stability.

Home buyers: Commercial property transitions indicating area development opportunities while persistent office vacancy rates suggest employment market shifts, and concentrated event programming demonstrates district vitality supporting amenity access and walkability factors in neighborhood selection decisions.

Investors: Commercial real estate circulation presenting acquisition timing opportunities while data center tax incentives create competitive advantages, and event-driven economic impact of $8.2M validates commercial property performance expectations though office-residential performance gaps suggest portfolio diversification toward residential-focused mixed-use developments.

Bottom line: This week demonstrates commercial real estate market adaptation through strategic repositioning and infrastructure investment while revealing persistent office demand challenges that successful developments must navigate through residential-focused strategies and selective municipal economic development competition.

Ready to navigate Columbus's commercial transition opportunities or capitalize on emerging data center infrastructure advantages? Let's connect you with our partners who understand both traditional commercial cycles and evolving tech infrastructure investment strategies.

[Schedule a call]

See you next week,

- Gagan Timsina