The Columbia, South Carolina industrial market posted record absorption over the course of 2007. The market tightened to a point that the most difficult challenge was locating quality space for the number of prospective tenants in the market. While the market expanded by 358,614 square feet during 2007, the square footage absorbed was more than twice that number. After absorbing 752,848 square feet during 2007, the industrial market finished the year with a vacancy rate of 2.40%.
Very little speculative construction occurred in the Midlands market during 2007, A number of developers are however currently investigating the market to determine the feasibility of building new speculative industrial space, with several others proceeding to move forward with new developments.
Many challenges face developers in getting speculative projects financed in 2008. Nationwide sub-prime lending difficulties have caused many financial institutions to tighten their underwriting practices. This will make developing new projects more difficult and potentially curb what would have otherwise been a significant increase in new industrial development in Columbia in 2008.
With the market absorbing newer space at a record pace during 2007, older Class C space faced challenges in attracting new tenants. The North Columbia industrial zone posted the highest vacancy rate in the Columbia market at year-end 2007, finishing the year with a vacancy of 8.13%. Of the 146,191 square feet of currently available space in this zone, only 27,000 square feet is Class A space. This newly developed space should be quickly absorbed in the first quarter of 2008.
The largest industrial zone in Columbia is the Bluff Road corridor, which contained 7,292,050 square feet of industrial space at year-end 2007. This market has experienced substantial conversion and demolition of older industrial space during 2006 and 2007, as condominiums and parking facilities were developed around Williams-Brice Stadium. As the older space was taken offline and the displaced tenants relocated into other vacant space in the area, this submarket tightened to a vacancy rate of 1.89%.
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