As of June 30, 2002, the Columbia, SC retail market can be characterized as stable. Although the economy, both locally and nationally, shows moderate signs of strengthening, retailers continue to be very cautious about expansion. Many retailers are using the economic slowdown to negotiate for lower rents or repositioning weaker stores. The Colliers Keenan Retail Market Report encompasses 8,880,075 square feet of anchored neighborhood shopping centers in the Columbia, SC MSA. As of mid-year 2002, occupancy has increased from 87.4% at year-end 2001 to 87.9%, with most of the occupancy increase in Cayce / West Columbia, by the absorption of 65,000 square feet by Carolina Pottery.
At mid-year 2002, the average rental rate for “in-line” shop space remains $10.65 per square foot. The average cost for pro-rated real estate taxes, insurance and common area maintenance pass through expenses is $1.76 per square foot at mid-year 2002. These costs are adjusted annually.
Regional malls in Columbia, SC MSA performed well in the first half of 2002, with occupancy slipping slightly to 92.3% down from the occupancy rate of 95.0% at year-end 2001. Average rental rates fell to $24.75 per square foot, down from $27.38 per square foot at year-end 2001. The cost for pass through expenses rose significantly from $9.02 per square foot the previous year to $11.34 per square foot at mid-year 2002. The average sales per square foot for non-anchor tenants in the regional malls were $281.75 per square foot.
Although overall occupancy has increased slightly since the end of 2001, occupancy will continue to improve in the second half of 2002 and into early 2003 as the economy slowly recovers. Sub-markets which should receive the most attention from retailers will continue to be the Harbison/ St. Andrews area with several back-fill opportunities available, and Northeast Columbia as national tenants continue to expand in the rapidly growing Northeast corridor.
Rental rates for anchored neighborhood shopping centers will likely remain flat during the second half of 2002. Occupancy rates will improve slightly as new stores are positioned for the pending Christmas season.
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