The Columbia, South Carolina retail market continued to perform well in 2002 as it did the prior year despite continued concerns with the economy and the volatile world affairs. The Colliers Keenan Retail market Review encompasses 8,965,729 square feet of neighborhood shopping centers in the Columbia, SC MSA. As of year-end 2002, the overall occupancy rate increased to 88.4% from 87.6% at year-end 2001 compared to 89.1% at year-end 2000.
The average rental rate for “in line” shop space as of year-end 2002 was $11.04 per square foot, an increase of 4% from $10.65 per square foot at year-end 2001. The average cost for pro-rated real estate taxes, insurance and common area maintenance pass-through expenses increased by 12% or $0.20 per square foot to $1.92 per square foot. Pass-through expenses continue to increase due primarily to costs of insurance and property taxes.
Occupancy in the enclosed malls in the Columbia, SC market area declined from 92.3% at year-end 2001 to 90.6% at year-end 2002. Average rental rates for enclosed mall spaces fell from $24.75 per square foot at year-end 2001 to $23.62 per square foot at year-end 2002. Pass-through expenses averaged $12.80 per square foot at year-end 2002, an increase of 10% over the prior year’s average expenses of $11.70 per square foot. Average sales of the enclosed malls rose from $281.75 per square foot at year-end 2001 to $287.50 per square foot at year-end 2002.
The Colliers Keenan Retail Market Review for year-end 2001 forecasted a ‘soft’ retail market during 2002. Occupancy rates rose minimally at 4% while tenant pass-through expenses rose significantly by 12%. Overall sales per square foot at the regional malls grew by only 3%. However, given the weaknesses in the economy during 2002, the market did not weaken substantially which indicates the possibility of a stronger market in 2003. The continued adaptive reuse of former vacant retail properties, along with the repositioning of many anchor tenant food stores, will provide a stimulus in the Columbia retail market in 2003. New construction of neighborhood shopping centers should be kept in line with demand, thereby not creating an oversupply of vacant space in the market. Rents will continue to remain stable; however, expectations are for continued increases in operating expense pass-throughs.
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