The Columbia, South Carolina office market experienced positive activity during the first half of 1995, continuing the trend established during the preceding five consecutive six-month intervals. Absorption of office space in the Columbia market, however, has slowed dramatically during the first half of 1995 as occupancy rates have strengthened considerably. The rate of absorption of office space has been cut nearly in half as compared to 1994 due primarily to the lack of availability of large blocks of class A space (over 5,000 square feet). The positive absorption of space in the Columbia metropolitan area is attributed primarily to continuing expansion by existing tenants within the market. There has also been a notable increase in the number of new companies establishing a presence in the capital city.
The overall occupancy rate for the Columbia office market as of June 1995 was 89.0% which includes the central business district (CBD) and four suburban markets. This represents an availability of just over 1 million square feet of class A, Band C space of the 9.5 million square foot market. The St. Andrews market.continued to lead the way with an occupancy rate of 96.4%. The softest area continues to be the Northeast market at 85.6%. Details of each submarket are noted in the "Market Spotlight" section within this report.
Rental rates in the Columbia metropolitan area remained steady or, in some cases, slightly increased over the six-month period. Suburban rental rates in the Forest Acres and St. Andrews markets increased while other markets remained firm. As of June 1995, there have been no formal announcements of new construction of rental office space within the market. The positive indicators provided within this report, however, should be tempered by the developing volatility of the space within the CBD. Corporate restructuring among financial institutions and utility companies may provide subleased office space to the CBD market during late 1995. Additionally, state government is contemplating purchasing or constructing an office facility to- accommodate up to 200,000 square feet which will replace space currently being leased by the state within the CBD. Should a decision to buy or build be confirmed, there will be a multi-year availability of office space to be absorbed in the CBD beginning in mid 1997.
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