Office Market Review

The Columbia, South Carolina office market continued to improve during the first half of 1994. Absorption of office space during the first six months of 1994 totaled approximately 185,000 square feet which is greater than the same period of the previous year. Absorption of office space was primarily due to expansions of existing tenants, an expanding presence by state government and corporate relocations to Columbia. Leasing activity was evident in virtually all sub-markets of Columbia, with the St. Andrews and Northeast office markets experiencing the greatest amount of absorption. The overall occupancy rate for the 9. 5 million square feet of office space in Columbia as of June 30, 1994 was 88%. St. Andrews experienced the highest occupancy within the market with a 95% rate. Even with a strong absorption rate, the Northeast market maintained the lowest occupancy rate at 85%. The higher occupancy rates in Columbia are a direct result of leasing activity in Class B and C office buildings combined with virtually no new office space construction. With the improvement in the office market, rental rates should begin to slightly increase and concessions should be greatly reduced.

Office/Showroom (Flex) Space Review

The office/showroom market, commonly referred to as flex space, continues to improve after an extended period of low occupancy levels. The total inventory of flex space in Columbia is approximately 625,000 square feet, most of which is situated in three suburban markets, Northeast Columbia, St. Andrews and West Columbia. Flex properties experienced moderate activity, relative to the office market activity, during the first six months of 1994. Although absorption during the first half of 1994 surpassed the total absorption of flex space during 1993, overall absorption was offset due to a number of properties which experienced tenant turnover and declining occupancy levels. It should be noted that the majority of flex space leased during this period was leased as a pure office environment rather than a combination of office/showroom space which further indicates the strengthening of the office market. The overall occupancy rate of the flex market in Columbia is 78%.

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