The Columbia South Carolina office market experienced robust activity in the first half of 2007. The second quarter was not as active as the first quarter, but overall the market managed to absorb 118,650 square feet during the six-month period, bringing overall occupancy to 85.51% at mid-year 2007. This level of activity is very high for the Columbia market and can be largely attributed to new national tenants moving into the market. Among the largest new tenant was the Staples operations center, located at Fontaine Business Center, which leased 85,000 square feet of vacant space.
As available space in the market grew tighter over the first half of the year, asking rental rates moved upwards as well. The average asking rental rate across the market increased to $14.95 per square foot at mid-year 2007, up from $14.38 per square foot six months earlier.
The Class A office market continued to expand from January to June 2007. The South Carolina Department of Insurance relocated to the CBD, which contributed to the 47,661 square feet of Class A absorption experienced in the CBD. Rental rates for Class A space continued to climb as well, with rents averaging $19.42 per square foot across the market, and $20.27 per square foot in the CBD.
As occupancies and correlated market values continued to rise over the first two quarters of 2007, over 20% of the multi-tenant office market is believed to be in the process of being sold in 2007. This level of investment sales activity will attract new investors to the market and may cause the reassessment of several properties. It could be speculated that eager landlords may attempt to increase asking rental rates in properties with higher than market occupancy rates.
Employment in the Columbia market continued to increase in 2007. The job market added an additional 6,400 jobs over 2006 job levels. In those sectors impacting the office market, service-oriented jobs increased by 2,500 and government jobs increased by 2,500 as well, while the banking and insurance sectors remained flat. Technology occupations downsized slightly, losing 100 jobs over 2006 levels.
Download the full report
For more information, including the market summary statistics, download the full research report.Download report