Economic and Demographic Update

Population: The population in Cincinnati in the 4Q of 2021 was 2,240,021. This represents an increase in total population of 4,150 over the course of the last year. During 2020 Q4, the Cincinnati population stood at 2,235,871. The number of people employed rose to 1,109,452 in 2021 Q4 from 1,100,900 over the last quarter, an increase of 8,552 or 0.78% for the period.

Median Income: The median household income for Cincinnati in the 4Q of 2021 was $70,916. At this time last year, the median household income was $66,250. 2021 Q4 median income represents a quarter-over-quarter increase of 1.88% and a year-over-year increase of 7.04%. Cincinnati has a median household income greater than the U.S. average, which is $69,124.

Current and Historical Data Review (Rates PSF, Vacancy)

Office leasing: Overall office base rent rates have increased by $0.22/SF. They went from $14.17/SF in 2021 Q3 to $14.39/SF in this most recent quarter. Office rates grew in 2021 Q4 when compared to last year’s quarter, when office base rent was $13.89/SF.

Vacancy rates also went from 10.10% to 10.00%. They stood at 9.20% this time last year. Throughout the next quarter, the vacancy rate is expected to change from 10.00% to 10.10%.

In the Cincinnati market’s central business district (CBD) specifically, 2021 Q4 base rents stood at $20.49/SF, an increase from $20.43/SF in 2021 Q3. When compared to last year’s quarter, CBD office rates decreased from $21.62. 

CBD vacancy rates went from 8.90% to 9.70%. Throughout 2022 Q1, the CBD vacancy rate is expected to increase to 9.80%.  

Office Sales Metrics (Cap Rates, Volume, Average Price PSF)

For investors, the cap rate during 2021 Q4 was 7.80%, compared to the previous quarter’s cap rate of 7.00%. The cap rate was 5.80% this quarter last year.

In terms of transaction volume, there were 100 sales transactions during the period. That’s an increase compared to the 78 transactions in the previous period. Last year at this time, there were 73 transactions. In terms of transaction amounts, office transactions were valued at $99,387,600 in 2021 Q4. That’s an increase compared to $69,401,360 of transaction value in the previous period. Last year at this time, office transactions were valued at $66,336,392.

Industrial Leasing Metrics (Rates PSF, Vacancy)

Industrial leasing: For the Cincinnati, OH industrial sector, we look at warehouse and distribution spaces specifically. Warehouse and distribution base rent rates have increased by $0.25/SF. They went from $5.62 in 2021 Q3 to $5.87/SF in this most recent quarter. Warehouse and distribution rates grew in 2021 Q4 when compared to last year’s quarter, when industrial base rent was $5.38/SF.

Vacancy rates also went from 5.20% to 4.40%. Next quarter, the vacancy rate is expected to drop to 4.20%.

Industrial Sales Metrics (Cap Rates, Volume)

For investors, the industrial cap rate during 2021 Q4 was 6.70%, compared to the previous quarter’s cap rate of 8.60%. The cap rate was 8.20% this quarter last year.

In terms of sales volume, industrial transactions were valued at $306,591,840 during the quarter. That’s an increase compared to $168,927,856 of transaction value in the previous quarter. Last year at this time, industrial sales transactions totaled $215,143,200.