The Columbia, South Carolina office market continued to absorb vacant space during 1995; however, virtually all absorption occurred during the first half of the year as the market remained relatively flat during the last six months. For 1995, the market experienced a net increase in occupancy of just over 82,000 square feet. The activity in the Columbia office market slowed dramatically during the year due to a lack of suitable available space in the suburban markets. The overall occupancy rate for the Columbia office market as of the end of 1995 was 89.2% which includes the Central Business District (CBD) and four suburban markets.
The The St. Andrews market continues to be the strongest office market in Columbia with an occupancy level of 94.6%. The softest markets are now the Forest Acres area at 85.7% and the CBD at 86.9%. Northeast Columbia is the bright spot in the Columbia office market as its occupancy increased from 85.1 % at the end of 1994 to 90.5% at the end of 1995. Rental rates in the Columbia metropolitan area increased in the markets with higher occupancy while decreasing in the softer markets of Forest Acres and the CBD. A review of each market can be found in the Market Spotlight section of this report.
1996 should be viewed optimistically as the market will experience new construction for the first time in five years. While the St. Andrews market will be the first to experience construction of a new office project, other suburban markets may see new construction beginning the second half of the year. 1996 will be a pivotal year for the CBD as it begins to attract tenants from the suburbs due to the multiple space options in the CBD and the declining of rental rates.
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