Retail and office growth puts a premium on available space to lease.

Leasing retail and office space in Columbia’s downtown is a double-edged sword. The prices are comparable to St. Louis and Kansas City’s downtown rates. For the building owners, that’s a good thing, and it reflects a high demand for downtown space.  But that also creates hefty challenges for some small businesses.   

“We love small businesses,” said Nickie Davis, executive director of the Downtown Community Improvement District (CID). “It’s great that we are sought after and can fill those vacancies, but it brings a different type of business sometimes.”  

In 2016, the CID reported commercial vacancies at 1.78 percent, down a bit from 2.79 percent in 2017. In 2025, the downtown vacancy rate has climbed to 4.65 percent. As a rule of thumb, if a downtown’s vacancy rate is below 10 percent, that means it’s time to start building new space, said Mike Grellner, vice president of Plaza Commercial Realty.  

“That’s when they say when the market’s in great shape, we need to build some new space,” Grellner explained. “We’re less than half of [10 percent vacancy], so back in 2016, 2 percent was absolutely silly.”  

One factor that played a significant role in retail and office vacancy rates was the University of Missouri joining the Southeastern Conference (SEC) at the start of the 2012-2013 academic year.  

“We had a huge spike in interest in our marketplace, especially downtown near campus, from new businesses out of the south and new development projects that tore down some old buildings,” Grellner said. As a result, the vacancy rates for 2016 and 2017 were “kind of crazy,” he said.  

The vacancy rates from 2018 to today are “sort of a normal baseline” for Columbia’s market, he added.  

However, once boutiques and businesses have found space to lease downtown, they can be successful despite prices. Many businesses have called downtown home for decades or longer, and some have purchased their buildings. Others left downtown because they needed a larger space, or their business ran into regulatory or financial snags.  

Hemp Hemp Hooray, a longstanding shop on Broadway, is one example.  

“Everybody loved it,” Davis said. “There were changes to state governance that they couldn’t sell certain types of products, which hindered their sales. So, they chose to leave.”  

Even though the commercial space report shows the vacancy rates at an all-time low in 2016, the rates have leveled out through 2018 and 2022 at roughly 4.5 percent. Grellner attributed some of the spikes and dips in downtown vacancy rates to the Columbia Daily Tribune closing its office, and the following year, Goodwill MERS leased that space at 101 N. Fourth St. to launch its Career Center.  

Even more recently, EquipmentShare occupied the more than 12,000-square-foot spot at 111 Orr Street until the company’s expanded quarters off Bull Run Drive were ready. That enormous space, which had also been a Wilson’s Fitness site, is currently vacant.  

“It just takes one or two vacancies to cause that line to zigzag up and down half a percent or a percent,” Grellner said. “I would tell you that while it’s at an all-time high … that trend line is pretty much flat. We’ve lost some office occupants downtown.”  

Some law firms and architecture firms have decided to leave downtown, he said. Not long ago, attorneys preferred to be within walking distance of the Boone County Courthouse, but proximity to the courthouse is not as critical now, and parking is often an issue for downtown offices and shops.  

 Fringe Western Wear relocated to 3310 Vandiver Drive in 2021 in order to expand, four years after opening shop as Fringe Boutique in the 2,600-square-foot retail space at 914 E. Broadway. The boutique specialized in women’s apparel and boots, evolving into a new name and some 13,000 square feet of retail space with new lines of men’s and children’s apparel, too.  

Online leasing sources indicate the monthly lease at 914 E. Broadway is $4,522.  

“We originally opened downtown for foot traffic and college students, which was a good start for the business,” said co-owner Charlotte Smarr. But with the demand for more lines of clothing, the decision was made to move the business.  

The downtown commercial lease market is also experiencing pressure from businesses seeking an urban setting. In some cases, if there isn’t adequate shop or parking space available, potential downtown businesses have located in the Arcade district, the Stockyards area, or the Brown Shoe Building off Wilkes Boulevard — instead of in the heart of downtown. The growth in and around downtown is fueled, in part, by the newer business districts that are filling the gap created by downtown’s lack of available space.  

“We will see downtown get redefined a little bit,” Grellner said. “We’ve seen a little bit of growth of the boundaries of downtown, and that, too, can lend itself to why the vacancy rate went up a little bit.” He pointed out that in addition to the growth of the Arcade District and surrounding areas, some offices have moved from downtown just across Providence Road into newer office developments.   

In addition to the downtown CID, the Business Loop CID is also generating a mixture of businesses along that stretch just north of downtown, prompted in part by Columbia’s growing urban core.   

That’s a prime example of the double-edged sword of shop and office space availability.  

“Our vacancy rates have just remained incredibly low compared to the national vacancy rates,” Grellner explained. “It is an indicator that our market is performing very well, but it’s a problem for business growth, for existing businesses, or for recruiting new businesses.”