Market Indicators on the Rise.
Year-end 2010 results for the Columbia, South Carolina, office market show two consecutive quarters of positive absorption after a two-year period of persistent weakness. Total market vacancy declined by 1.4% during the last six months of the year, as market absorption totaled 113,556 square feet. While annual absorption numbers remained negative for 2010, year-end vacancy rates suggest the office market has indeed hit bottom and has begun what will almost certainly be a slow but steady recovery.
Overall job growth in the local economy continued to languish during the last half of 2010, but the services sector experienced a year-over-year increase of 1,000 jobs from November 2009 to November 2010. This growth, coupled with economic development announcements totaling more than 2,000 new jobs for the region in the fourth quarter of 2010, bode well for sustainable expansion in the office market in 2011.
Further substantiating claims of recovery in the office market are market-wide increases in rental rates for the first time since the start of the recent recession. Average asking rental rates across the market increased by $0.17 per square foot resulting in a market average of $15.42 per square foot at year-end 2010. The Class A market experienced a $0.30 per square foot increase in rental rates, noteworthy since Class A properties experienced significant declines in rental rates during the economic downturn as tenants value-shopped for office space.
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