The Columbia, South Carolina, office market continued its trend of improvement throughout 1996. The Columbia market is now considered very tight for tenants looking for space. Total market absorption for the second half of 1996 was almost 100,000 square feet. For the year, the market improved by the absorption of approximately 200,000 square feet. This compares to only 82,000 square feet being absorbed during the entire year of 1995. Overall the Columbia office market reached an occupancy level of 90.0%. The 9.5 million square foot office market includes the Central Business District (CBD) and four suburban markets. The occupancy rate of the Class A market is 92.4% indicating a healthy and vibrant corporate market in the Columbia area.
The strongest markets within the Columbia area are the Cayce/West Columbia market with an occupancy level of 94.6% and the Northeast market at 92.8%. These two markets have surpassed the St. Andrews market which fell to 91.6% occupancy. The weakest market in Columbia continues to be the Forest Acres market at 85.0%. All markets with the exception of Forest Acres began to see rental increases during 1996. A more detailed review of each market can be found in the Market Spotlight section of this report.
In 1997, the office market will continue to be perceived as a landlord's market. Limited new construction may continue in the St. Andrews, Northeast and CBD markets in 1997. During the next twelve months, the market will continue to experience increases in rental rates in most of the markets within Columbia. So long as new construction receives ample prelease commitments, the Columbia office market should remain healthy throughout 1997 and well into 1998. This optimistic forecast should be viewed positively by landlords seeking better returns on their investments and negatively by tenants who will continue to have difficulty locating available space at rental rates they are accustomed to paying over the past few years.
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