Foresight 2023 - 4th Edition

FORESIGHT

ANNUAL COLUMBUS OFFICE TENANT REPORT

PRESENTED BY COLLIERS | COLUMBUS

TENANT BEHAVIOR AFFECTING THE OFFICE MARKET - p. 6

WHERE ARE BUSINESSES RELOCATING? - p. 12

TOP WORKPLACE TRENDS - p. 18

WHAT CAN WE EXPECT IN 2023? - p. 23

At Colliers | Columbus, we help accelerate our clients’ success, specializing in industrial, office, retail and investment properties. Services provided within these specialties include leasing, disposition, tenant and buyer representation, corporate services, property management, facility services, construction management, development, valuation and consultation, in order to add value for our clients.

TABLE OF CONTENTS

2023 prediction

Look for this icon throughout for insight on 2023 predictions.

Tenant Behavior & Case Studies

Interview: From the Market Experts

Tenant Migration: Where Are Businesses Relocating?

Top Workplace Trends in 2023

Interview: Tenant Insights with Foxen

What’s to Come? What Can We Expect in 2023?

WHAT’S INSIDE?

06 10

12

18 20 23

The world continues to recover from the effects of the COVID-19 pandemic, which has altered day-to day life and impacted society, the economy and commercial real estate. With negative absorption, added sublease availability and rising vacancies, the Columbus office market is facing a tremendous challenge. There has been some uncertainty regarding the future of physical office space, but the sector is showing signs of recovery. This report will explore workplace trends, case studies in tenant behavior, migration patterns, interviews with industry leaders and predictions for 2023 – all relating to the Columbus office market.

ABOUT THE AUTHORS

Reach out to our team with any questions, or for the inside scoop!

Email: columbus@colliers.com

BRIANA SFERO CPMC Marketing Manager

Briana is a graduate of The Ohio State University with a passion for communicating the Columbus story with a fresh take that truly spotlights her adopted hometown. She aids in the execution of the overall brand and corporate identity, helping to drive the strategy vision for marketing alongside the Director of Marketing & Research.

HALLE SMITH Senior Marketing Specialist

A native of Columbus, Halle grew up in Grove City before attending The Ohio State University. She provides support for the corporate marketing team, focusing on internal and external communication. In addition to working on corporate projects, she assists various service lines such as Brokerage, Property Management and Facility Services.

BROOKE FERMAN Research Analyst

New to Columbus, Brooke has embraced Central Ohio and everything it has to offer. Whether she is out finding new development insight or a new local coffee spot, she sees the bigger picture of what it means for her new stomping grounds. Brooke provides market research support for the Brokerage, Property Management, Facility Services and Construction teams, as well as the leadership team.

PAUL KRIMM CSM MBA President | Principal

With more than 20 years in the industry, Paul serves as the President of the Columbus operation of Colliers, where he is responsible for driving recruitment, new business development, spearheading operational success and efficiencies and developing training and best practices across all service lines.

“While we are still encountering headwinds at the start of 2023, the market is very active. Central Ohio continues to avoid significant peaks and valleys as the business environment strives to work towards normalization and/or stabilization.

- Paul Krimm CSM, MBA President, Colliers | Columbus

TENANT BEHAVIOR CASE &STUDIES

“We’ve outgrown the space, and I’m really excited about that Scioto Peninsula area. To be able to redesign our floor plan to fit the needs of a fast-moving and fastgrowing organization is a huge benefit.

- Derrick Bailey Telhio Columbus Business First

T HE T REND : Flight tO quality

The desire for high-end office space has been demonstrated across the market, with Class A office buildings and new construction benefiting the most from this trend. Occupiers are prioritizing the quality of office space over the economics and efficiency to help attract and retain talent and lure employees to come back to the physical office. While Class A buildings are becoming increasingly popular amongst tenants in the

C ase s tudy #1: TELHIO

market, there are also companies wanting to trade up their space, moving from Class C to Class B buildings. This provides an opportunity for owners of Class B office buildings to add amenities and make building renovations and upgrades to secure new tenants who are interested in maximizing value. Below are a few examples of companies that followed the flight-toquality trend when looking for new office space.

Telhio recently signed a lease at The Peninsula Development, with plans to occupy the entire fifth floor. The new office demonstrates a stark contrast to their former headquarters located at 96 N. 4th St, which they owned since 1962. The 30,000 SF space increases their office footprint by about 3,000 SF. Telhio’s President, Derrick Bailey, stated that while the ability to redesign their floor plan to fit the needs of their rapidly growing organization is a great benefit, the new space also features a balcony, café area and board room overlooking the Scioto Mile.

C ase s tudy #2: OHIO HOUSING FINANCE AGENCY

Ohio Housing Finance Agency (OHFA) is relocating from an older, Class C building in Downtown Columbus to 2600 Corporate Exchange. Although the organization is entering a new submarket about 20 minutes north of the Central Business District (CBD), ownership at Corporate Exchange II has enhanced its tenant amenity offerings to include a new lounge, common conference rooms and updates to common areas as well as the lobby. With a smaller pool of companies in the market, space quality in tenant suites and common areas is becoming increasingly important. OHFA’s relocation demonstrates the push for office improvements, as their decision to relocate was contingent upon trading up their space for these improvements.

Sources: Columbus Business First, GlobeSt, Costar, Telhio, Ohio Housing Finance Agency

T HE T REND : m Ove-in ready spaC es

Sublease space has been on the rise as firms across the country continue evaluating their post-COVID real estate needs. Columbus sublease availability remains relatively low despite other U.S. markets hitting record levels of availability. Until there is greater clarity on business direction, sublease space remains a short-term and cost-competitive option, creating an opportunity for Columbus owners committed to improving their spaces. Owners have been upgrading their spaces by creating

C ase s tudy #1: TOOLE DESIGN

spec suites, move-in ready spaces or fully furnished options, allowing for quicker and easier occupancy in addition to offering tenants flexibility as their workplace strategy continues to change. This provides a clear advantage when competing for the business of companies looking to either make the transition from work-from-home back to the office or those seeking space while they reevaluate their needs.

Toole Design is a planning, engineering and landscape architecture firm specializing in active, multimodal transportation. They recently leased a 4,370 SF speculative suite at The Hayden, located at 20 E. Broad in Downtown Columbus. In conjunction with move-in ready spec suites, the owners of The Hayden have also recently renovated the entire building. Known as the oldest building on Capitol Square, 20 E Broad was originally constructed in 1869. In 2020, the building had undergone various upgrades, including a common conference room and rooftop patio overlooking the Ohio Statehouse. This is a prime example of an owner who committed to making renovations and improving tenant spaces to remain competitive in the Columbus office market.

While Columbus has relatively low sublease availability compared to other cities across the U.S., the office market still offers 2.3M SF of sublease space. MoveHQ, an Updater company, secured a fully furnished, creative sublease space in the Warehouse District of Columbus. The fully furnished space featured high ceilings, tall windows, collaboration spaces and meeting rooms. The attractive,

infrastructure and furniture supported a quick and easy occupancy.

WHAT’S IN STORE FOR 2023?

From positioning the vacancies, we’ve seen tremendous success once we have a prospective tenant for the space, as this typically results in a lower TI allowance needed to configure the space for the tenant and move quicker through the lease negotiation process and tenant occupancy.

- Michelle Fude First Vice President, Colliers | Columbus

2023 prediction

MAJOR TENANTS IN 2023

At the time of this publication, there are over 25 tenants in the market requiring 20,000 square feet or more. Over half of these large users are business services, financial and technology companies, so we predict these industries to drive activity in 2023.

There are numerous tenants that are looking for over 30,000 square feet of space in Easton, East and New Albany, so we foresee that multiple large leases will be signed in suburban submarkets this year, specifically on the east side of Central Ohio. Additionally, due to a few undisclosed users’ plans to purchase office properties, we predict that sales activity will pick up throughout 2023.

FROM THE MARkET ExPERTS

Michelle Fude and Ryan McHugh are part of a full-service leasing and sales team at Colliers | Columbus. In 2022 alone, their team was involved in 100 transactions valued at almost $172 million, accounting for the sale and lease of over 1.6 million square feet. Their specialization in the office market provides them with expertise on tenant behavior and current trends.

Compared to last year, are you noticing a shift in where tenants are looking for space? Why do you think this is?

Class A space has definitely gotten a boost, as projects like Bridge Park, the Pointe at Polaris and the Easton expansion have done well as many companies have leased newer, amenitized space as a way to incentivize employees to come back to the office. The Downtown submarket as a whole has struggled. Parking is more difficult and an added expense, which makes it even harder to bring employees back Downtown.

- RM

Are most tenants looking in one market or multiple markets?

Many tenants will consider multiple submarkets in their search for office space, especially when considering the suburbs of Columbus. While we typically see tenants in the Downtown area remain in the Downtown area, many tenants that have been considering the suburbs will review multiple suburbs. For example, we leased over 70,000 SF at two Class A buildings in Polaris in 2022. Of the 70,000 SF, roughly 50% of that square footage we were competing with another submarket such as Easton and Dublin.

- MF

What are tenants’ determining factors in choosing a location?

The most consistent determining factors for tenants when making their choice for office space include access to walkable amenities, access to on-site amenities for tenants and guests, distance from decision-makers’ residence and access to younger talent and workforce.

- MF

From your experience, how has COVID affected different industries as it relates to tenant demand and behavior?

We have seen call center users reduce their footprint as many of these employees are now working from home. In addition, a few larger corporate users have been slower to get back to the office, such as Nationwide and Cardinal Health. I would say the smaller, local companies are largely back in the office at least a portion of the time.

- RM

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The most consistent determining factors for tenants when making their choice for office space include access to walkable amenities, access to on-site amenities for tenants and guests, distance from decisionmakers’ residences and access to younger talent and workforce.

Are you noticing any trends relating to term or tenant improvement (TI) allowance? Are landlords offering more or less TI allowance, and are tenants signing shorter or longer term leases on average?

Many trends have emerged in office space transactions in the past 12-24 months. Construction pricing tends to remain on the higher end, coupled with the fact that there is a significant amount of second-generation office space that needs substantial upgrades, has resulted in landlords providing a higher Tenant Improvement Allowance to win a new tenant. In an effort to better position some of our vacancies, we suggest clients select targeted vacancies based on current tenant demand and spend the money upfront to position and speculatively build out the space now. From positioning the vacancy we’ve seen tremendous success once we have a prospective tenant for the space, as this typically results in a lower TI allowance needed to configure the space for the tenant, and moves quicker through the lease negotiation process and tenant occupancy. In regards to the lease term, we’re seeing tenants pursue closer to 5-7 year lease terms versus the previous 10 year. We’re also seeing more short-term 3-year leases to offer tenants flexibility as their workplace strategy continues to change.

- MF

At the end of Q3 2021 less than 31% of employees were working three or more times per week in the office. At the end of Q3 2022 we saw that the number rise to 54%. Are you noticing tenants discussing have their employees back in office?

Working in commercial real estate provides the ability to learn from decision-makers from various industries. One trend that has emerged regardless of the industry is most decision-makers want to find ways to bring their employees back to the office. While some form of hybrid will likely remain, such as work-from-home Fridays, the majority of CEOs and COOs we meet with share that they look forward to when more employees are physically back in the office to improve team comradery, collaboration among different departments, overall productivity, training and mentoring opportunities and overall workplace relationships.

MF

“New mixed-use developments continue to lead activity in the office sector. What are other Landlords doing to compete with these properties? There is a flight to quality with many tenants in Columbus. The best way to compete with the perks of a new development is to evaluate your office building and understand what amenities you can offer to tenants. Many landlords have completed or are in the process of renovating some of their vacancies to offer full amenity areas for tenants free of charge. We’ve seen many landlords offer full amenity floors that include common conference rooms of various sizes, fitness facilities with full shower and locker rooms, tenant lounge and cafés, golf simulators, rooftop patios and/or any outdoor space, bike storage rooms, etc. Some examples of iconic buildings in Downtown Columbus completing similar renovations include The Hayden (20 E Broad), Encova Insurance (471 E Broad), Fifth Third Center, One Columbus, Huntington Center and 65 E State, to name a few.

- MF

What do you predict will be the next big trend in space design for office users?

To best compete with office space in the near future, I predict landlords will offer vacancies that are not only speculatively built out but fully furnished with top-of-the-line furniture and branding components. If landlords are willing to make the upfront investment of speculatively building out a space and then furnishing the suite so it can truly be “plug and play” for a tenant looking for quick occupancy or simply ease of occupancy, this could significantly increase their lease up timeline for their vacant office space.

- MF

TENANT MIGRATION

Where are Businesses relOCating?

Tenants are consistently relocating their office space to better fit their needs. By using a points system based on signed square feet, we are able to track where office users are coming and going throughout the city. We also analyzed each of these transactions in detail to compile statistics, identify trends and make predictions for future tenant behavior. Keep reading to find out more information on tenant migration in the Columbus office market.

LEASE LENgTH:

2021

Leases Signed - 56

Signed SF - 308,495 SF

Average TI - $23.85

Average Term - 51 months

Leases Signed - 45

Signed SF - 358,588 SF

Average TI - $35.89

Average Term - 50 months

Leases Signed - 69

Signed SF - 561,214 SF

Average TI - $19.76

Average Term - 54 months

Q1

Leases Signed - 54

Signed SF - 209,269 SF

Average TI - $19.23

Average Term - 47 months

Q2

Leases Signed - 72

Signed SF - 501,369 SF

Average TI - $19.90

Average Term - 54 months

Leases Signed - 69

Q3

Leases Signed - 61

Signed SF - 421,596 SF

Average TI - $21.18

Average Term - 56 months

Q4

Signed SF - 476,944 SF

Average TI - $22.77

Average Term - 53 months

Leases Signed - 70

Signed SF - 345,941 SF

Average TI - $17.68

Average Term - 56 months

The year started off a little slow in terms of the number of leases signed in Q1 2022, but activity picked up throughout the remainder of the year. There was no real trend in tenant improvement (TI) allowance per quarter, but average term length did slightly increase over the year.

2022 2021 tOtal: 2022 tOtal:

Leases Signed - 231

Signed SF - 1,649,893 SF

Average TI - $23.94

Average Term - 53 months

Leases Signed - 265 Signed SF - 1,533,523 SF

Average TI - $19.89

Average Term - 52.5 months

Highest Average Term Length (in months) by Industry:

Education, Financial Services and Non-Profit replaced Government, Real Estate/Construction and Technology from 2021.

Highest Average Term Length (in months) by Submarket:

Polaris remained in the top three while Hilliard and Arlington/Grandview replaced Central Business Disctrict (CBD) and East from 2021.

The number of leases signed and the total square feet signed stayed consistent from 2021 to 2022. Average TI allowances did decrease, while average term length remained the same.

TI ALLOWANcE*:

Highest Average TI Allowance by Industry:

Financial Services remained in the top 3, Education and Non-Profit replaced Law and Real Estate/ Construction from 2021.

* The TI (tenant improvement) allowance is the amount that the landlord will spend for the tenant to build out their space.

LEASED SqUARE FEET:

tenant mIgratIOn HEAT MAP

Represents the number of tenants that were new to the submarket

Dublin | 52 points

31 tenants (312,458 SF)

20 tenants (144,749 SF)

6 tenants (15,400 SF)

Worthington | 23 points

21 tenants (156,778 SF)

12 tenants (71,885 SF)

4 tenants (30,824 SF)

Hilliard | 5 points

3 tenants (3,692 SF)

3 tenants (50,866 SF)

3 tenants (7,666 SF)

Powell | 3 points

3 tenants (9,569 SF)

0 tenants (0 SF)

1 tenant (1,200 SF)

Represents the number of tenants that moved within the submarket

CBD | 48 points

28 tenants (380,039 SF)

27 tenants (208,130 SF)

6 tenants (38,311 SF)

Westerville | 15 points

31 tenants (114,252 SF)

6 tenants (38,425 SF)

3 tenants (17,266 SF)

Arlington/Grandview | 5 points

5 tenants (19,388 SF)

3 tenants (25,937 SF)

3 tenants (11,673 SF)

New Albany | 1 point 1 tenant (2,684 SF) 1 tenant (2,497 SF) 0 tenants (0 SF)

Represents the number of tenants that left the submarket

Polaris | 26 points

16 tenants (142,586 SF)

6 tenants (31,595 SF)

1 tenant (2,000 SF)

Gahanna/Aiport | 9 points

5 tenants (120,921 SF)

4 tenants (9,645 SF)

1 tenant (1,702 SF)

East | 3 points

7 tenants (30,432 SF)

0 tenants (0 SF)

3 tenants (6,308 SF)

North Central | 0 points

4 tenants (10,092 SF)

1 tenant (17,931 SF)

3 tenants (11,908 SF)

Southeast | 0 points

1 tenant (3,050 SF)

0 tenants (0 SF)

1 tenant (1,227 SF)

Southwest | -1 point

0 tenants (0 SF)

0 tenants (0 SF)

1 tenant (3,027 SF)

North Delaware | -2 points

1 tenant (2,222 SF)

0 tenants (0 SF)

2 tenants (4,300 SF)

Easton | -2 points

2 tenants (9,694 SF)

2 tenants (3,830 SF)

2 tenants (8,059 SF)

migratiOn Key

50,000 SF and up ..............................

20,000 SF to 49,999 SF......................

10,000 SF to 19,999 SF.......................

5,000 SF to 9,999 SF..........................

0 SF to 4,999 SF.................................

0 SF to -4,999 SF................................

-5,000 SF to -9,999 SF.......................

-10,000 SF to -19,999 SF....................

-20,000 SF to -49,999 SF...................

-50,000 SF and below ........................

5 points

4 points

Southwest +

3 points

2 points

1 point

-1 point

-2 points

-3 points

-4 points

-5 points

Red represents movement to the submarket, while blue represents movement from the submarket.

-

Arrows represent trending tenant movement

Represents the hottest submarket of 2022

deep dIve: tenant mIgratIOn trends FROM 2022

Over half of the tenants that left space in Dublin signed for space elsewhere in Dublin

Over half of tenants that left space in CBD signed for space elsewhere in CBD

1/2

of the largest leases signed in 2022 were signed by Business Services tenants

1/3 of tenants that left space in the East submarket migrated to CBD

1/3

of tenants that signed in Gahanna/Airport were in the Technology industry

3/4

Over half of leases signed with the highest amount of free rent were signed by Business Services and Financial Services tenants

50% of tenants that signed in the East submarket were in the Healthcare industry

1/2

of tenants that leased their first Central Ohio location did so in CBD, Dublin or Worthington

The most popular submarket for Law tenants was the CBD

The most popular submarkets for Retail tenants was Arlington/ Grandview and Dublin

The most popular submarket for Business Services tenants was Worthington

of leases with the longest lease terms were signed by Business Services tenants

43% of leases signed with the highest TI allowances were signed in Polaris or Worthington

The average term length for leases 10,000 SF and up was nearly 6 years

What tO lOOK FOr In 2023 PREDiCTiONS iN TENANT BEHAViOR

TI ALLOWANcE:

Average TI allowance for 2023 could reach $30 PSF.

Over 10% of current tenants in the market are Education, Financial Services and Non-Profit companies –the three industry types with the highest average TI allowances.

LEASED SF:

The office market can anticipate a steady pace of activity throughout 2023.

The number of tenants in the market fluctuated over the past year. There were 158 tenants at the start of 2022, decreasing to 139 tenants in July 2022 before ending the year at 128 in December 2022.

With the number of tenants in the market remaining steady between 130-140 tenants throughout the second half of 2022, we predict that activity will continue to remain steady around 135 tenants in the market in 2023.

MiGRATiON PREDiCTiON 1:

LEASE TERm:

Average lease term length for 2023 could drop to 5 years.

Less than 30% of current tenants in the market are looking specifically in Arlington/Grandview, Hilliard and Polaris, the three submarkets with the highest average term lengths.

INDUSTRy:

Business Services, Finance and Technology companies will have a major effect on the office sector in 2023.

These industry types account for over half of tenants currently in the market and over 590,000 SF collectively.

Of the largest tenants in the market (looking for 20,000 SF or more), the majority of them are in these industries.

Over the past 12 months demand in the suburbs has increased by 50%. We predict that the largest leases of 2023 will occur specifically in the Easton, East and New Albany submarkets, especially with the incoming Intel development.

2 tenants representing 120,000 total SF are searching in Easton

3 tenants representing 114,000 total SF are searching in the East

MiGRATiON PREDiCTiON 2:

3 tenants representing 150,000 total SF are searching in New Albany

There will be continued demand in the CBD in 2023, with tenants currently in the CBD moving within the submarket and new tenants entering the CBD from other submarkets.

tenants representing 359,200 total SF are searching in the CBD.

WORkPLACE TRENDS iN 2023

2023 prediction

Workplace design has a significant impact on employee productivity, satisfaction, and well-being. As the workforce changes and evolves, so do the design trends that companies adopt to improve their work environment. This white paper discusses the current trends in workplace design and how they are affecting the modern workplace.

TREND 1: FLExiBLE SPACES

Companies are starting to recognize that the traditional cubicle-style office layout is no longer the most effective way to design a workspace. Instead, companies are creating flexible spaces that can be easily adapted to meet the changing needs of employees. This includes creating open plan workspaces, break-out areas, and communal spaces that can be used for collaboration, meetings, or as quiet zones for focused work.

TREND 2: BiOPHiLiC DESiGN

Biophilic design is the incorporation of natural elements into the workspace, such as plants, water features, and natural lighting. Studies have shown that exposure to natural elements can improve employee well-being, reduce stress levels, and boost creativity.

TREND 3: TECHNOLOGY iNTEGRATiON

With the rise of remote work and the increased use of digital tools, companies are investing in technology that can improve communication and collaboration among employees. This includes tools like video conferencing, virtual whiteboards, and project management software.

TREND 4: EMPLOYEE WELLNESS

Companies are recognizing that a healthy and happy workforce is a more productive workforce. This has led to the design of workplaces that prioritize employee wellness, including features like ergonomic furniture, standing desks, and fitness areas.

TREND 5: SUSTAiNABiLiTY

Companies are becoming increasingly aware of the impact their operations have on the environment and are taking steps to reduce their carbon footprint. This includes designing workplaces that use sustainable materials, reduce energy consumption, and promote sustainable transportation options.

The above five trends are currently dominating workplace design. Companies that want to attract and retain top talent need to create workspaces that are flexible, biophilic, technology-driven, wellness-focused, and sustainable. By adopting these trends, companies can create a work environment that fosters productivity, creativity and well-being.

“

“

Due to the work from home possibilities companies adopted, most are steering away from the cubicle farm and more towards a space that provides a comfortable “living room” style feel. Tenants are building with the employee in mind in hopes that they can use their space as a recruiting tool.

- Trey Hafer Project Manager, Colliers | Columbus

GEORGE SACCO

Managing Director at Foxen

Can you give us a brief overview of what Foxen does and what your specific role looks like?

Foxen is a financial technology company dedicated to providing mutual benefit to MFR Owners, Operators and Residents. Foxen mitigates risk, creates efficiencies, and generates additional revenue for properties, while simultaneously delivering valuable product offerings to residents.

I joined CEO Jay Harkrider and the Foxen Team in 2020, and I am currently in charge of Strategy and Innovation. This generally consists of ensuring the effectiveness of all core Foxen strategies, creating new ones as needed and leading our embedded strategic partnership endeavors.

What factors influenced your decision to expand your office footprint from 6,000 SF to 30,000 SF?

After several great years Downtown, we outgrew our space at 80 On The Commons. We were bursting at the seams, despite increasing our space in that building several times. Although taking 30,000 square feet was a dramatic jump in space, we felt our interests would be best served by making one move instead of potentially several.

While your new location isn’t far from your previous office, what drew you to the Arena District?

There were several key factors in selecting the space. As previously mentioned, Foxen was primarily seeking a space that could accommodate our anticipated growth. There are many benefits to the Arena District that we are enjoying, including convenient expressway access, a plethora of restaurants, safety and beautiful building aesthetics. While we were open to other pockets of Columbus, the 333 W. Nationwide building itself stood out.

What were you looking for in a space? Were you looking for an open office for collaboration, private offices and meeting rooms, or a mixture of all of the above?

We sought a mix of an open-air collaborative space, with a high number of private offices and large and mediumsized conference rooms. Additionally, having ample parking directly in front of the building was a plus. This building definitely checked those boxes.

It also boasts huge kitchen spaces, which our team loves. Foxen was also swayed by the large stadium seating area, allowing us to present to larger gatherings. We have recently hired Zan Saavedra, as Director of IT, who will enhance our technology and capabilities within the new office.

As your new building is a single-tenant office building, is this something you were looking for as opposed to leasing 1-2 floors in a multi-tenant office building?

We were open to leasing in multi-tenant office building space, however really liked the idea of having something completely our own. Ground-level parking instead of a parking deck and avoiding the use of elevators have been luxuries. We are also very excited to soon have signage on our building.

How many people are working in the office at a time? Do you feel like your new office space will help team members work more cohesively?

We have roughly 60 Foxen team members in our office, with an additional 15-20 remote in different areas of the country. We are expecting to soon grow to more than 100 team members. The office certainly can accommodate that growth, is conducive to collaboration, and serves as an aid to these recruiting efforts. We have recently made several key leadership hires, most notably our COO, Kevin Jacobson.

We notice that you are hiring both in office and remote opportunities, what is the approach to hiring both options for new talent?

While Foxen is committed to Columbus, we are open to hiring great talent even when it’s outside of our home office. Foxen provides its solutions in all 50 states, and therefore having geographic coverage is critical in our Sales and Business Development efforts.

Where do you see your company in 3-5 years?

Foxen has a clear vision and mission. We are aiming to be the leader in resident financial wellness solutions in the Multifamily space. We are focused on having served 2-3 million apartment units, expanding our product offering and leading with respect to market share in those product categories.

Although taking 30,000 square feet was a dramatic jump in space, we felt that our interests would be best served by making one move instead of potentially several.

- George Sacco Foxen

“The Columbus market in general, compared to the rest of the country, is going to be pretty bullish for 2023. I believe the velocity is going to continue to be strong and continue to grow with companies looking to potentially move or expand in Columbus. Through sublease options, I believe we’ll see more absorption as a whole in our market’s existing product, and newly constructed space will continue to be absorbed at a good pace.

- Grant Hartman Vice President, Colliers | Columbus

WHAT’S TO COME?

Despite tenants in the market fluctuating throughout 2022 before ending the year with 128 users in December 2022, the number of tenants searching for office space has already grown to 147 users in April 2023. We foresee this demand continuing to remain steady, with tenants in the market being between 130-140 users, as companies become more comfortable entering the market and making decisions regarding their office space. Of the current tenants in the market, over half are in the business services, finance and technology industries. Additionally, of the tenants searching for 20,000 square feet or more, 50.0% are in these industries. We predict these types of users driving activity in 2023.

Tenant demand for office space in the Central/Downtown area has seen a 22.4% decrease over the past 12 months, while demand for space in the suburbs has increased by 122.2%. The total square feet tenants are looking for in the Central/Downtown area decreased by 52.7%, though square feet in the suburbs increased by 48%. Indicating a continued shift in demand, we foresee more activity in suburban submarkets throughout the year.

Tenants are interested in a flexible work environment with quality furnished areas to prioritize efficiency and creativity in the office. With the flight to quality trend, TI allowances are expected to slightly decrease as well as lease terms slightly decreasing on average. Central Ohio can anticipate an increased number short-term leases for 2023.