Economic and Demographic Update

Population: The population in Cincinnati in the 1Q of 2022 was 2,240,956. This represents an increase in total population of 4,476 over the course of the last year. During 2021 Q1, the Cincinnati population stood at 2,236,480. The number of people employed rose to 1,113,960 in 2022 Q1 from 1,108,237 over the last quarter, an increase of 5,723 or 0.52% for the period.

Median Income: The median household income for Cincinnati in the 1Q of 2022 was $72,682. At this time last year, the median household income was $65,799. 2022 Q1 median income represents a quarter-over-quarter increase of 2.60% and a year-over-year increase of 10.46%. Cincinnati has a median household income greater than the U.S. average, which is $70,941.

Current and Historical Data Review (Rates PSF, Vacancy)

Office leasing: Overall office base rent rates have increased by $0.06/SF. They went from $14.38/SF in 2021 Q4 to $14.44/SF in this most recent quarter. Office rates grew in 2022 Q1 when compared to last year’s quarter, when office base rent was $14.21/SF.

Vacancy rates also went from 10.20% to 10.30%. They stood at 9.60% this time last year. The vacancy rate is expected to increase from 10.30% to 10.40% next quarter.

In the Cincinnati market’s central business district (CBD) specifically, 2022 Q1 base rents stood at $20.17/SF, an increase from $20.10/SF in 2021 Q4. When compared to last year’s quarter, CBD office rates decreased from $21.62. 

CBD vacancy rates went from 10.34% to 10.65%. The CBD vacancy rate is expected to increase to 10.68% next quarter. 

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

For investors, the average cap rate during 2022 Q1 was 8.40%, compared to the previous quarter’s average cap rate of 7.80%. The average cap rate was 10.40% this quarter last year.

In terms of transaction volume, there were 73 sales transactions during the period. That’s a decrease compared to the 116 transactions in the previous period. Last year at this time, there were 57 transactions. In terms of transaction amounts, office transactions were valued at $62,610,272 in 2022 Q1. That’s a decrease compared to $123,194,824 of transaction value in the previous period. Last year at this time, office transactions were valued at $79,741,272.

Industrial Leasing Metrics (Rates PSF, Vacancy)

Industrial leasing: For the Cincinnati, OH industrial sector, we look at warehouse and distribution spaces specifically. Base rent rates have increased by $0.17/SF. They went from $5.86 in 2021 Q4 to $6.03/SF in this most recent quarter. Warehouse and distribution rates grew in 2022 Q1 when compared to last year’s quarter, when industrial base rent was $5.47/SF.

In 2022 Q1, the industrial market grew in Cincinnati by 3.00% versus 2021 Q4. Vacancy rates also went from 4.50% to 4.30%. Next quarter, the vacancy rate is expected to drop to 3.70%.

Industrial Sales Metrics (Average Cap Rates, Volume)

For investors, the average industrial cap rate during 2022 Q1 was 5.20%, compared to the previous quarter’s average cap rate of 6.70%. The average cap rate was 8.10% this quarter last year.

In terms of sales volume, industrial transactions were valued at $266,970,736 during the quarter. That’s a decrease compared to $520,216,256 of transaction value in the previous quarter. Last year at this time, industrial sales transactions totaled $149,975,040.