During the course of 2006, industrial prospects looking to lease or purchase industrial property in the midlands found it difficult due to very tight and competitive market conditions. Over the previous twelve months, the market experienced 479,330 square feet of new construction, with 539,459 square feet of net absorption, demonstrating the overall demand for Class A space in the market.
From 2005 to 2006, end of year occupancy levels rose from 94.9% to 95.36%. However, even with an increase in the overall occupancy level, the market experienced a decline in absorption from the record levels of 2004 and 2005. Due to a lack of available space in the market, many tenants and users were forced to either locate in other markets or postpone their plans to enter the market or expand.
Although there remained a consistent demand for quality industrial product in the Columbia area, the recent increases in construction costs and interest rates slowed new speculative construction almost to a standstill in 2006. Sales in the area were significantly impacted by a shortage of available user properties, particularly in the 20,000 to 50,000 square foot range.
Along with moderate absorption, the midlands industrial economy also experienced moderate job growth. Although manufacturing jobs declined by 700 jobs from December 2005 to December 2006, the transportation, trade and warehousing sectors that impact the industrial market experienced an increase of 1,800 jobs during this same period.
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