Mid-year results for the Columbia industrial market indicated that vacancy numbers continued to rise during the first six months of 2009. Absorption for the first two quarters of the year resulted in a decline in occupancy of 79,166 square feet. New Construction also contributed 310,000 square feet of available space to the market, which resulted in a mid-year vacancy rate of 7.89%.
Asking rental rates for the Class A industrial market remained stable during the first six months of 2009, as tenants seeking newer facilities continued to pay within 10% of asking rates. Class B and Class C tenants began to push for lower rental rates and concessions from landlords, which resulted in a decline in overall asking rates of 15% to 20%.
Two significant new projects came online during the first half of 2009. KIRCO completed a 184.000-square-foot, Class A, LEED Silver (candidate), speculative building in the Carolina Pines Industrial Park in Northeast Columbia, while Miller-Valentine Group completed a 176,400-square-foot, Class A, speculative building in the Lexington County Industrial Park in West Columbia. Miller-Valentine Group is also seeking a LEED certification for this property, which was 28% pre-leased to JanPak.
Home Depot began construction of a new 465,000-square-foot regional distribution center during the second quarter of 2009. The center, which is scheduled to be completed in November, will serve stores in South Carolina, North Carolina, Tennessee and parts of Georgia. It will have the capacity to service up to 150 Home Depot retail stores.
At mid-year 2009, there were approximately 700,000 square feet of out-of-market tenants looking for space in Columbia. This level of prospective activity should provide positive absorption by the fourth quarter of 2009 barring any unforeseen plant closures. The sale of industrial properties will remain low through the end of the year, or until credit requirements to purchase owner/user and investment properties becomes less stringent.
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