Although the rapid growth that was experienced in Columbia, South Carolina, during 2006 and 2007 has slowed, at least in the short-term, the local market continued to out perform many other industrial markets in the nation. During 2009, the market absorbed 338,481 square feet and expanded by 1.2 million square feet in new construction, ending the year with a vacancy rate of 8.97%. Nationally, the average market vacancy rate has continuously climbed over the course of the year and was quickly approaching 11% at year-end 2009.
Compared to other markets across the United States, the levels of vacancy in the industrial market remained healthy at year-end 2009, although it has increased significantly from the 2.4% vacancy rate posted at year-end 2007. Many larger markets have seen negative absorption increase dramatically in 2009 with vacancy rates breaking 20% in Raleigh, North Carolina, and 30% in Dayton, Ohio.
Although the addition of 2.3 million square feet of available space to the market in the past 24 months has greatly increased the supply of quality space, asking rates have remained relatively unchanged. The average asking rental rate for Class A space remained stable, ranging from $4.15 per square foot to $4.75 per square foot at year-end 2009. Landlords have offered concessions at the onset of lease execution for long-term deals (10+ years), signaling to tenants that this may be the time to enter into a long-term situation by either lease or purchase.
The Lexington submarket (Zone 6) experienced the greatest amount of activity during the previous twelve months. The market absorbed 569,379 square feet of space and finished the year with a vacancy rate of 9.36%. Miller-Valentine Group completed construction of a 465,000-square-foot regional distribution center for Home Depot and developed a 176,400-square-foot speculative distribution center, which was reportedly 100% committed at year-end 2009. The Home Depot project, which was completed in late November after just 28 weeks of construction, will serve 150 retail locations in South Carolina, North Carolina, Tennessee and parts of Georgia. The new facility encompasses 11 acres under one roof and will employ 300.
Download the full report
For more information, including the market summary statistics, download the full research report.Download report