The Columbia, South Carolina, office market performed very well during 2007. With increasing job growth and a sustained residential real estate market during a period of extreme financial pressures, the office market continued to post positive gains. Absorption from July 1, 2007 to December 31, 2007, totaled 41,685 square feet across the market. During the 2007 calendar year, the market absorbed 133,130 square feet of office space, of which 65,295 was Class A space. It should be noted that new transactions accounted for more than 150,000 square feet of leases executed over 2007, however corporate relocation to owner-occupied properties deducted from the overall net absorption experienced in the Columbia office market.
Central Business District
The CBD experienced a wide array of activity over 2007. The Class A market in downtown Columbia absorbed 50,287 square feet during the year, bringing the occupancy rate to 89.44% at year-end 2007. The effects of the SCANA relocation are, however, beginning to impact the CBD market as some divisions begin to move to the company’s new Cayce headquarters. This, coupled with tenants relocating into newer and nicer space both in the CBD and in the suburbs, resulted in a net absorption in the CBD of negative 67,085 square feet from mid-year 2007 to year-end 2007. In the short term this relocation may be viewed as a hindrance to the overall vitality of the office market, however, it also opens the door for renovation of space that may attract new tenants to an otherwise tight Class A market.
The Central Business District will continue to expand notably during 2008, as construction begins on two new office projects. Center Vista, a 90,000 square foot mixed-use development by Miller-Valentine Group, is expected to begin construction in early 2008. Also slated to begin construction in 2008 is Holder Properties’ new office building located at the intersection of Main & Gervais Street. Even with high construction costs and the impending vacancy of the 450,000 square-foot Palmetto Center in 2009, these two projects are expected to move forward quickly, which bodes well for the overall health of the CBD market.
Innovista, the University of South Carolina’s campus-style research institute, will greatly impact the future of the office market as public and private multi-tenant office and research space comes available in 2008. While the publicly-owned University buildings are moving forward and quickly attracting research tenants, it is still unclear how the privately-developed properties will impact the office market. Speculative developers will likely race to complete their projects in hopes of minimizing competition upon build-out of the private Innovista developments.
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