Office Market Continues to Strengthen.
The Columbia, South Carolina, office market continued to make positive gains during the first quarter of 2011 as the local economy showed signs of post-recessionary improvement. Tenants demonstrated a renewed interest for new office space and increased leasing activity resulted in 23,061 square feet of absorption during the first three months of the year. The activity experienced in the first quarter of 2011 marks three consecutive quarters of positive absorption, indicating that the Columbia office market has indeed entered an economic up-cycle.
Columbia’s Main Street was the first area to experience a resurgence of leasing activity, meaning that large blocks of quality office space in the CBD were more scarce during the first quarter of 2011 than twelve months prior. Concessions given by landlords of CBD properties were much less substantial than concessions given in the past, and rental rates are expected to stabilize in the coming months as demand for office space continues to increase.
Tenants remained value-conscience in searching for office space and worked to create more efficient space, thereby reducing square footage requirements and rental expenses. However, along with increased efficiencies, tenants have started requesting higher quality finishes in their respective space. This has resulted in the need for increased tenant improvement allowances from landlords, which in turn has resulted in longer lease commitments from tenants.
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