Columbus has emerged as an employment and tech hub in recent years and its affordability, expanding job market, and high quality lifestyle make it an attractive location for a young demographic.
Investors are attracted to the real estate market for several reasons:
1. Columbus is a developing job market and tech hub
Columbus is already home to numerous Fortune 500 companies and has been named one of the Top 5 cities to work in tech in 2021 (1). The city saw jobs growth in 2021 and a further 2.8% growth is forecast (2) for the region in 2022. The developing market is set to add thousands of new jobs this year with tech giants Intel opening 2 new centers in the area (3), and Hyperion relocating their headquarters to Columbus (4).
Columbus has recently been ranked in the top 20 cities in the U.S. for careers in STEM – Science, Technology, Engineering, and Math (5). Job growth for these positions is expected to increase by 10.5% nationally by 2030. Given the growing demand in this sector, these careers can offer lucrative employment opportunities to residents, or those looking to relocate from the coasts to cheaper urban centers.
2. The city has a strong multifamily sector
After a strong 2021, the multifamily sector is expected to improve even further in 2022, with experts forecasting a 7% increase in effective rents nationally, and demand projected to continue to grow (6).
In addition to these national trends, there are several Columbus-specific factors that also suggest a strong year for Multifamily in the city. Home prices continue to grow in Columbus, with a 17% increase reported in 2021 (7), further driving the need for cheaper rental accommodation.
Availability of multifamily options were at an all time low entering 2022 and vacancy has dropped to ~3% (8). The return of students to Ohio State University has also boosted Columbus’ apartment fundamentals. The university enrolls 66,000 students, as well as employing 35,000 staff.
Source: Marcus & Millichap 2022 Multifamily National Investment Forecast
Average effective rent grew by 10% in 2021 and experts expect rent prices will grow at a more sustainable rate of 4% this year (8). All of these factors position Columbus as the highest ranking market in Ohio on the Marcus & Millichap Multifamily National Index (8).
3. Columbus has a young, growing population
The population of Columbus has been on a steady increase for the past decade (9), growing by 15% in that time compared to 7.4% nationally and 2.3% in the rest of Ohio. The city ranks in the top 15 most populous in the U.S. (9).
The city has a median age (10) of 32 and 81% of professionals work in white collar employment (11).
The strong and developing jobs market and tech hub in Columbus make it an attractive proposition for young professionals looking for a high quality of life and the chance to advance their career. Tech companies are investing in the region, which has a growing population. All of these factors mean the multifamily sector has the potential to be an opportunity for investors.
Our latest multifamily deal is capitalizing on the robust job market and developing tech hub in the Columbus market. The Class A, newly constructed development has numerous high-end internal finishes and common area amenities, and is in an attractive location adjacent to the Short North Arts District, with lots to offer a young professional demographic. The sponsor has a strong track record, with $3B AUM, and 50+ deals, including 7 multifamily deals in Ohio, which demonstrates their confidence in the market.
If you are interested in this market, you can invest directly in this currently income-generating deal or through our blended real estate portfolio, which includes the Columbus deal as well as a diversified offering of multifamily and mixed-use properties. Log in to our platform to find detailed information.
(1) Source: Smart Asset: Best Places to Work in Tech – 2021 Edition
(2) Source: The Columbus Dispatch: Columbus Jobs – Economist Forecasts Strong Growth 2022
(3) NBC4i: Intel to build $20 billion computer chip facility in New Albany
(4) Source: NBC4i: Hyperion chooses Columbus for headquarters location
(5) Source: WalletHub: Best & Worst Metro Areas for Stem Professionals
(6) Source: CBRE Multifamily US Real Estate Outlook 2022
(7) Source: Zillow: Columbus Home Values
(8) Source: Marcus & Millichap 2022 Multifamily National Investment Forecast
(9) Source: The Columbus Dispatch: Columbus’ population now over 900,000
(10) Source: Data USA IO: Columbus OH
(11) Source: Point2Homes: Columbus Demographics