Apartments and Retail / Office Mixed Use in Columbus

[Robert Ellis]

Hi everyone, i've been to a few multifamily meetup groups this month and I wanted to get everyones opinions. The consensus in a lot of the groups (at least in Columbus) is a super high competition for multifamily properties. Inventory shortage. High prices. 

I have a client who recently sold a 4 unit for a crazy number and is looking at mixed use buildings. When I look at this inventory, it seems like there is a lot of opportunity, plenty of good listings, and no competition. Just wondering if anyone is looking at this strategy in Columbus as the multifamily market continues to be competitive? 

From just looking today, I see a Class A office with higher yields than multifamily in the same area. 9% cap rate in Grandview Heights / Upper Arlington Area. Class C apartments above retail also seems like there are at least 5 listings which are great returns and upside. I think for retail you need to get rid of it and convert first floor to office or apartments. Office does well anywhere. Retail is dead in my own opinion, especially in Class C areas. I saw a landlord near Ohio State University convert retail to apartments and I thought it was a great idea. So there could be this niche of converting retail to multifamily, stabilizing the asset, and selling it off. 

I think in this market you have to get creative! Let me know all of your thoughts on this :) 

[Ryan Freet]

It seems a lot of the larger developers are putting up quite a few mixed-use buildings downtown and in the surrounding areas and I don't see that trend slowing anytime soon. When we talk about converting to office space, I have noticed more and more collaborative work spaces popping up. I would be interested to see the returns and usage for these types of spaces and how they are being adopted in the Columbus market. I am unfamiliar with their operation, however they appear to be flexible enough to satisfy a range of needs and could be used in the absence of a single large tenant.