Lexington Market Continues to Grow.
The second quarter of 2011 brought moderate leasing activity in the Columbia, South Carolina, industrial market, although it was offset by the lease expiration at 1091 Carolina Pines Blvd, a 350,000-square-foot, Class A distribution center in the Northeast submarket. With this space coming on line, the market posted negative absorption of 220,798 square feet at mid-year 2011. Even with the negative absorption experienced during the second quarter, the vacancy rate remained at a healthy rate of 7.88%. By comparison, vacancy rates in surrounding markets of Charlotte (13.3%), Atlanta (14.1%), Greenville (9.89%) and Charleston (10.83%) were higher than experienced in Columbia at mid-year 2011.
The Lexington submarket remained the most active submarket at mid-year, posting 182,422 square feet of absorption during the second quarter. The most notable transactions occurring during the second quarter include the 50,000-square-foot lease at 1005 Technology Blvd (CAE Industrial Park) to Harsco Rail Inc., the 39,600-squarefoot lease at 3430 Platt Springs Road (former Harlan Clark Building) to Barrons Wholesale Tires and the 31,000-square-foot lease at 3384 Platt Springs Road (former DHL Distribution) to Innovative Courier Solutions.
The availability of Class A space remained concentrated in the Northeast (Blythewood) market. With more than 1,000,000 square feet of space available, the market posted a 21.62% vacancy rate at mid-year 2011. This market has historically served a number of regional distribution centers, but corporate consolidations and an abundance of availability in, and proximity to the Charlotte market, has created substantial competition for this available space.
Overall, asking rental rates started to increase during the second quarter although rates still averaged around $3.65 per square foot, approximately $0.60 per square foot lower than pre-recessionary levels. Rates will fluctuate by submarket, and the Lexington submarket will see the most substantial increases over the last half of 2011. Rates in the Northeast submarket will likely remain soft until absorption occurs there.
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