The Columbia SC office market continued its 18-month trend by weakening further during the first six months of 2003. Nationally, occupancy rates continued to decline primarily due to corporations downsizing. This is true in Columbia as well. However, Columbia is also negatively impacted by the construction of new speculative office buildings that have recently been completed and are largely unleased at this stage. This space is providing excellent inventory for tenants who seek quality space in the market.
Occupancy rates for the 10.5 million square feet of multi-tenant office space in the Columbia market eroded during the first half of 2003 with the overall occupancy rate at 84.1%, down from 87.3% one year earlier. The occupancy level also includes all available sublease space on the market. This occupancy level is down from the height of the office market at mid-year 2001 when the overall market reached 93.0% occupancy. Still the Columbia occupancy level of 84.1% remains above most other Southeastern cities.
Class A space in Columbia consists of 2,900,000 square feet or approximately one third of the entire market. The occupancy rate of Class A space in Columbia at mid-year 2003 was 86.2%, a slight decrease from 89.9% at mid-year 2002. The reduction in occupancy is attributable to newly constructed space being added to the market.
Average rental rates in Columbia declined slightly during the first six months of the year with the overall average rate at $14.97/sf. Class A average rates also fell slightly to $17.55/sf.
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