The Columbia office market continued to soften during the first six months of 2002 as it did during the second half of 2001. Columbia has been negatively impacted as corporations continue to control expenses by reducing office space. While it appeared that the second half of 2001 would be the bottom point of the economic downturn, the office market in Columbia continues to suffer from increasing vacancies.
Occupancy rates for the 10.5 million square feet of multi-tenant office space for the Columbia market further eroded during the first half of 2002 with the overall occupancy rate at 87.3%, down from 90.1% at year-end 2001 and 93.0% at mid-year 2001. However, this occupancy level remains above those of most other Southeastern cities. It is important to note that there is a substantial amount of sublease space available within the market. When included, several large blocks of available sublease space further reduce the overall occupancy rate to 86.1%.
Class A space in Columbia consists of 2,660,000 square feet. The occupancy rate of Class A space at mid-year 2002 was 89.9%, a slight decrease from 90.9% at year-end 2001. This is a substantial decrease from the all time high of 94.2% at year-end 2000.
Central Business District
The CBD continued to perform reasonably well during the first half of 2002 but has weakened considerably from the all time high occupancy level of 95.4% at year-end 2000. The occupancy rate as of mid-year 2002 is 90.8%. However, several announcements during the first half of 2002 may have a dramatic impact on the condition of the CBD in the pending 30 months. Major vacancies will be created, as two substantial tenants will leave the market, vacating as much as 275,000 square feet. Several other tenants could vacate up to an additional 75,000 square feet of space. Additionally, it has been announced that a new 350,000 square foot building will be constructed in the 1300 block of Main Street adding approximately 200,000 square feet of speculative space to the market.
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