The vacancy rate for office space in the Columbus region fell to 18.23 percent in the third quarter, down from 19.31 percent in the second quarter, according to a new report from real estate consulting firm Colliers.

“The Columbus office market continued to show steady signs of improvement. Tenant demand strengthened in the suburbs, with much of the leasing momentum concentrated in Dublin and Arlington/Grandview,” the report noted.

Several areas around Columbus saw increases in office space occupancy, signaling sustained tenant demand, the report noted.

“Westerville and Dublin captured the largest absorption gains. Westerville recorded the largest decrease in vacancy dropping 3.6 percent quarter-over-quarter,” according to the report.

The vacancy rate still remains above pre-COVID pandemic levels. The vacancy rate was below 10 percent from 2015 to 2019, the year before the pandemic struck.

Construction of new office space, meanwhile, is low compared to recent years. There is 143,944 square feet of office space planned mostly in Dublin and downtown Columbus. No new office space became occupied in the third quarter.

Last year 487,000 square feet of newly built office space became available.

Between 2015 and 2019, an average of 889,000 square feet of office space was built each year, according to Colliers.

“With limited construction activity and no new deliveries this quarter, fundamentals are expected to strengthen modestly through year-end, positioning Columbus to finish 2025 with vacancy dipping below 18 percent,” the report noted.

There is 12,762 square feet of office space at The Galaxy at Polaris that’s scheduled for occupancy early next year. Another 64,828 square feet of office space is scheduled to be delivered at The Merchant Building in downtown Columbus in the second quarter of 2026.

There is also 15,900 square feet of office space that’s scheduled to become available in the second quarter of 2026 at 4022 Greenstripe Lane and 50,454 square feet that’s also expected to be available in Dublin’s Bridge Park development in the third quarter of 2027.

The region recorded 550,659 square feet of new leasing activity in the third quarter. The largest lease of the quarter was Hexion, which leased 76,522 square feet at 5200 Blazer Pkwy. in Dublin. Deals in Dublin and downtown Columbus accounted for 50.9 percent of transaction activity.

Net absorption remained steady with 148,701 square feet of positive absorption. Absorption is the net gain on how much office space is leased compared to how much office space is vacated.

The largest occupancy of the quarter was The Village Network purchasing 2500 Corporate Exchange for owner use.

The largest move out of the quarter was the United States Bankruptcy Court vacating 55,195 square feet at 168-170 N. High St. in downtown Columbus.

The Columbus office market, meanwhile, saw a decline in average asking rents to $21.66 per square foot quarter-over-quarter.

Market rents remain the highest at Easton ($25.04), driven by its mix of high-end, mixed-use developments, the report noted.

Rents have hovered near the $21 mark since 2023.

Sales activity slowed in the third quarter, with total volume reaching $57.41 million at an average of $95.20 per square foot. The largest transaction was the $28.5 million purchase of 8111–8131 Smiths Mill Road in New Albany by EOG Resources, Inc.

The former Bob Evans headquarters includes a 175,000 square foot Class A office building and a 25,000 square foot warehouse. The Village Network also purchased 2500 Corporate Exchange in Westerville for $4.3 million.