Economic and Demographic Update
Population: The population in Cincinnati in the 2Q of 2022 was 2,242,045. This represents an increase in total population of 3,697 over the course of the last year. During 2021 Q2, the Cincinnati population stood at 2,238,348. The number of people employed rose to 1,120,187 in 2022 Q2 from 1,109,092 over the last quarter, an increase of 11,095 or 1.00% for the period.
Median Income: The median household income for Cincinnati in the 2Q of 2022 was $73,866. At this time last year, the median household income was $68,006. 2022 Q2 median income represents a quarter-over-quarter increase of 1.89% and a year-over-year increase of 8.62%. Cincinnati has a median household income greater than the U.S. average, which is $72,996.
Current and Historical Data Review (Rates PSF, Vacancy)
Office leasing: Overall office base rent rates have increased by $0.06/SF. They went from $14.40/SF in 2022 Q1 to $14.46/SF in this most recent quarter. Office rates grew in 2022 Q2 when compared to last year’s quarter, when office base rent was $14.09/SF.
Vacancy rates also went from 10.80% to 10.70%. They stood at 10.00% this time last year. The overall vacancy rate is expected to decrease from 10.70% to 10.50% next quarter.
In the Cincinnati market’s central business district (CBD) specifically, 2022 Q2 base rents stood at $20.58/SF, an increase from $20.52/SF in 2022 Q1. When compared to last year’s quarter, CBD office rates increased from $20.17.
CBD vacancy rates went from 10.88% to 11.33%. The CBD vacancy rate is expected to decrease to 11.19% next quarter.
Office Sales Metrics (CAP Rates, Volume, Average Price PSF)
For investors, the cap rate during 2022 Q2 was 7.40%, compared to the previous quarter’s cap rate of 8.40%. The cap rate was 8.20% this quarter last year.
In terms of transaction volume, there were 59 sales transactions during the period. That’s a decrease compared to the 82 transactions in the previous period. Last year at this time, there were 82 transactions. In terms of transaction amounts, office transactions were valued at $58,203,072 in 2022 Q2. That’s a decrease compared to $80,519,784 of transaction value in the previous period. Last year at this time, office transactions were valued at $184,116,960.
Industrial Leasing Metrics (Rates PSF, Vacancy)
Industrial leasing: For the Cincinnati, OH industrial sector, we look at warehouse and distribution spaces specifically. Overall industrial base rent rates have increased by $0.24/SF. They went from $5.97 in 2022 Q1 to $6.21/SF in this most recent quarter. Warehouse and distribution rates grew in 2022 Q2 when compared to last year’s quarter, when industrial base rent was $5.56/SF.
In 2022 Q2, the industrial market grew in Cincinnati by 4.10% versus 2022 Q1. Vacancy rates also went from 4.20% to 3.10%. Next quarter, the vacancy rate is expected to drop to 2.40%.
Industrial Sales Metrics (CAP Rates, Volume)
For investors, the industrial cap rate during 2022 Q2 was 5.20%, compared to the previous quarter’s cap rate of 6.40%. The cap rate was 8.50% this quarter last year.
In terms of sales volume, industrial transactions were valued at $179,248,016 during the quarter. That’s a decrease compared to $227,436,128 of transaction value in the previous quarter. Last year at this time, industrial sales transactions totaled $128,370,808.
