Onshoring Increases User Interest.
The Columbia, South Carolina, industrial market experienced limited activity during the third quarter of 2011, absorbing 112,062 square feet during this three month period. While the market absorbed less space than originally expected, activity among prospective users remained strong.
Interest from manufacturing users increased substantially during the third quarter due to a continued growth in domestic manufacturing and an emerging trend in manufacturing known as “onshoring” (manufacturing returning to North America from overseas markets, primarily Asia.) As Asian economies have continued to expand, labor costs have soared and transportation costs have increased, while at the same time many markets in the U.S., and particularly in the Southeast, have increased productivity and output. These markets have thus become increasingly competitive with offshore markets without the political and logistical risks.
As user interest has increased, the Northeast Columbia (Blythewood) submarket has received a great deal of attention because it has the largest supply of Class A space in the market. In particular, the 350,000-square-foot former Lamson & Sessions building is attracting a great deal of interest as there is a shortage of “big box” Class A space nationwide. Users continue to look for existing inventory first, with build-to-suit being their second choice option. With an increased level of interest in Class A space surfacing during the third quarter, and an ample supply, we expect positive absorption in the Northeast Columbia submarket during the first and second quarters of 2012.
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