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Recent Columbus Multifamily Sales Driven By Older Properties

CoStar Market Insights: Columbus’ Workforce Housing Receiving the Most Investor Attention in 2018
May 11, 2018
Aerial of the LC RiverSouth Phase II apartment development, which is slated to deliver at 225 S. High St. in Columbus by the third quarter of 2018.



Value-add deals in the Mid-Cities, as well as parts of the inner-ring, blue-collar suburbs surrounding Dallas and Fort Worth, have become popular this cycle. Renovations, a lack of supply and strong blue-collar job growth stemming from Dallas’ booming industrial sector, have allowed landlords to raise rents at an impressive clip in these areas in recent years.

There’s plenty of investment activity in Columbus’ exploding multifamily scene, but not all of it is involved in the new supply coming on quarterly. Plenty of money is driving into Columbus by way of acquisition, and it isn’t the shiny new objects that are catching the most attention.

As of mid-Q2 2018, nearly 1,100 units have been exchanged across the metro and a common theme unites them all: No asset rated higher than a 3-Star has been sold, and the majority of the purchased properties delivered prior to 2000.

See CoStar COMPS #4215839.

Multifamily communities that are selling bear little resemblance to the projects that are delivering across the metro, which are filled with luxury amenities such as meditation pods and pet spas. Properties that have sold since April are geared toward those looking for affordability and geared toward those for whom stainless steel appliances are not a necessity. Assets such as the Courtright Lane Apartments are representative of what is selling in Columbus: This 3-Star property that was built in 1973 offers base level amenities only and is aesthetically dated. It sold for $2.1 million in early April with a 9.1 percent cap rate.

The properties have sold across all of the metro with one exception--nothing in the CBD has been exchanged. The CBD is currently the epicenter of Columbus’ transformation, and multifamily developers there are leading the charge. More than 2,000 units are under construction here, and these units are geared toward those willing to pay a premium for space and amenities. No major downtown assets have sold this year, and only three 4-Star properties have been acquired in that same time frame.

Columbus is unique in Ohio in that both its employment and its population rates are climbing. This has attracted residents from across the region. An already deep demand pool is further strengthened by an endless source of potential renters coming to Ohio State. Developers have noticed, and responded, bringing thousands of new units online this cycle. These communities have filled successfully, and rent gains have been strong, likely discouraging owners of high-end assets to sell.


CoStar Market Insights provides a snapshot of recent real estate trends. The CoStar Market Analytics team monitors commercial and multifamily real estate across 390 metro areas, with a granular understanding of the projects, players and economic trends that move these markets.

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