The Columbia, South Carolina retail market remained strong over the first half of 2006, posting a mid-year occupancy of 91.01%. Over the first six months of the year, the market managed to absorb 167,521 square feet, surpassing absorption levels at year-end 2005 of 116,200 square feet. The overall occupancy rate decreased slightly from 91.65% at year-end 2005 due to new space added to the market that has not yet leased. Over the past twelve months, the majority of the 283,721 square feet of absorption has come from new leases executed at the Village at Sandhill, which has quickly claimed the title as one of Columbia’s premier retail locations by attracting new, high-end, nationally recognized tenants to the Columbia market.
As Columbia’s retail economy continues to grow, job growth in the trade sector continues to expand as well. From June 2005 to June 2006, employment in the retail trade sector grew by 2.40%, wholesale trade grew by 3.20% while food, beverage and general merchandise stores experienced an increase in employment of 1.40%.
Rental rates in Columbia increased from an average of $12.86 per square foot at year-end 2005, to an average of $13.64 per square foot at mid-year 2006. This significant increase in average rental costs can be largely attributed to new product introduced to the market. Pass through expenses, defined as the tenant’s pro rata share of common area maintenance, real estate taxes and insurance, also increased slightly from $2.61 per square foot to $2.73 per square foot over the previous six months. Rising tenant expenses in a stable market provide evidence that landlord expenses and utility costs are ever increasing.
Three of Columbia’s retail submarkets experienced major absorption in the first half of 2006. North Columbia, which absorbed 47,363 square feet, had an increase in occupancy from 73.22% at year-end 2005 to 83.44% at mid-year 2006. This submarket has historically posted the lowest asking rents in the Columbia region. At mid-year 2006 quoted rents averaged $7.63 per square foot, up from $7.31 per square foot at year-end 2005. The Northeast submarket, with the continued expansion of the Village at Sandhill, added new retailers such as Ashley Home Furniture and Coldwater Creek, contributing to its 90,060 square feet of absorption. Southeast Columbia, along Garners Ferry Road, experienced 22,400 square feet of absorption, bringing mid-year occupancy to 93.07%, up from 91.67% at year-end 2005.
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