Single-Tenant Net Lease Investment in Columbus
Columbus net lease market's split into two camps right now. Investment-grade tenants on new 15-20 year leases are trading in the 5.5%-6.2% range. Everything else - regional tenants, shorter terms, older properties - you're looking at 7.5%-9.5% caps. The Intel effect hasn't really hit retail net lease yet, but it's driving up land values everywhere, which means replacement cost arguments are getting stronger for well-located properties.
Market Context
Cap Rate Range
5.5%-9.5%, with investment-grade tenants in the 5.5%-6.2% range and secondary credit/shorter lease terms pushing 7.5%-9.5%
Current Vacancy
8.2% overall retail vacancy, though single-tenant properties rarely sit vacant long due to 1031 exchange demand
Rent Trend
Flat to down 2-4% on older properties, new construction commanding 15-20% premiums over comparable existing space
Absorption
Limited new supply keeps absorption positive, but tenant failures in casual dining and specialty retail creating some churn
Price Per Unit Trend
Not applicable - net lease pricing based on NOI and cap rates rather than per-unit metrics
Transaction Volume
Up 18% year-over-year through Q1 2026, driven by 1031 exchange activity and REIT portfolio pruning
Submarket Analysis
Polaris/Delaware County
5.8%-7.2% capVacancy
4.1%
Avg Rent (1BR)
N/A - retail NNN
Strong demographics, high household incomes. New development pressure from residential growth.
OM Tip
Include traffic counts from 23/71 interchange and Polaris Fashion Place draw data
Easton/New Albany
5.5%-6.8% capVacancy
3.8%
Avg Rent (1BR)
N/A - retail NNN
Intel proximity driving interest. Land values up 25% in 18 months, making redevelopment more likely.
OM Tip
Emphasize Intel workforce demographics and proximity to major employers
Hilliard/Dublin West
6.2%-7.8% capVacancy
6.7%
Avg Rent (1BR)
N/A - retail NNN
Stable suburban market. Less Intel impact but solid fundamentals with established rooftops.
OM Tip
Focus on school district quality and established household formation patterns
South Columbus/Grove City
7.5%-9.2% capVacancy
11.4%
Avg Rent (1BR)
N/A - retail NNN
Value-oriented market with some distress. Good cash-on-cash returns but tenant credit concerns.
OM Tip
Include detailed tenant sales performance if available and co-tenancy analysis
Northeast/Westerville
6.8%-8.1% capVacancy
7.9%
Avg Rent (1BR)
N/A - retail NNN
Mature suburban market with stable but modest growth. Limited new development.
OM Tip
Highlight tenant longevity and renewal history in established locations
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What Your OM Needs to Address
Full Lease Abstract
Include every material provision - renewal options, rent escalations, assignment rights, dark store clauses
Data to Include
Base rent, percentage rent thresholds if any, escalation schedule, renewal terms, guarantor details
Tenant Financial Performance
Three years of tenant financial statements, store-level sales if available, systemwide performance
Data to Include
Credit rating, debt service coverage, sales per square foot, comp store sales trends
Dark Store and Go-Dark Provisions
Critical for buyer underwriting - many net lease disasters trace back to inadequate dark store language
Data to Include
Specific language around operating covenants, continuous operation clauses, dark store rent obligations
Market Position and Competition
Detailed competitive analysis within 3-mile radius, especially for restaurant and retail concepts
Data to Include
Competitor locations, market penetration, demographic analysis, trade area overlap
Renewal and Extension Analysis
Model various renewal scenarios since most value comes from lease extensions beyond initial term
Data to Include
Historical renewal patterns for tenant, market rent comparables, renewal option terms
1031 Exchange Positioning
Columbus market has heavy 1031 demand - structure marketing to appeal to exchange buyers
Data to Include
Clear title work, environmental Phase I, timeline flexibility for exchange deadlines
Investment Outlook
Short Term
Cap rates likely compressed another 25-50 basis points over next 12 months. Supply shortages and 1031 demand creating bidding wars on quality properties. Avoid anything with lease expiration before 2030.
Medium Term
Intel construction workforce peaks 2027-2028, then transitions to permanent operations. Expect some retail concept shake-out as construction boom moderates. Properties near semiconductor supply chain facilities should hold value better.
Long Term
Columbus positioned well for long-term growth with diversified economy and business-friendly environment. Retail real estate faces ongoing structural challenges, but well-located properties with strong tenants should maintain relevance. Climate and infrastructure advantages over Sun Belt markets become more apparent.
Buyer Profile
1031 exchange buyers dominate sub-$5M market. REITs and institutional buyers focus on $10M+ with investment-grade tenants. Private wealth from California and Northeast seeking yield and stability. Local buyers mostly focused on value-add opportunities in secondary locations.
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