The Industrial vacancy rate in the Columbia, South Carolina, market increased again in the second quarter of 2008 but still remained at a very low level of approximately 3.25%. Overall activity was slow in the second quarter as some companies postponed plans of expansion, while others continued to look for suitable space within the market. It can be anticipated that the third quarter of 2008 will show a substantial negative absorption as several companies will announce plans to close facilities in the Columbia market.
Overall prospect activity has remained strong thus far in 2008, which leads us to believe that the last quarter of the year will be a bright spot for both leasing and sale activity for the year. The market vacancy rate can be expected to push upwards towards 5.0% to 6.0% by the end of 2008 representing a more balanced market.
The average rental rate for new leases in the second quarter was $4.71 per square foot, up $.44 per square foot from the first quarter. This upswing was due to smaller spaces being leased at higher rental rates than larger facilities. This upward trend has not been experienced in overall rental rates, which remained stable during the seond quarter.
Class A space remains in short supply with Zone 7 (Northeast Columbia) being the only industrial sector with Class A space available at mid-year 2008. Zone 6 (West Columbia) has a severe shortage of industrial space in general and no Class A space was available within this zone at mid-year 2008. The vacancy rate in Zone 6 remained at an all time low of 2.05% at the end of the second quarter of 2008.
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