Columbia’s Industrial Market seeks to end the year strong.

Market Overview

The Columbia Industrial Market witnessed decreased activity in the first half of 2012.  The direct vacancy rate increased by 2.04% from year-end 2011 resulting in a mid-year vacancy rate of 9.28%. Overall market rental rates underwent a slight decrease during the first and second quarters, with vacant space listed for sublease representing just 2.7% of the total vacancy in the industrial market. The greatest vacancies were observed in the Southeast and Northeast submarkets with their combined vacancies representing 63% of the total direct vacant space in the entire market, while combined Irmo/Chapin and Lexington submarkets, expressed only 0.7% of the vacant space in the market.

Current Conditions

Increased vacancy rate in Columbia’s Industrial Market can be explained by several factors to include significant competition from nearby larger markets, an overall slowdown in deal velocity and several large properties becoming available to the market in 2012.

The presence of competing markets along with the significant inventory of Class A space attributes to the high vacancy rate of 26.6% in the Blythewood and Northeast submarkets. The good news in Blythewood is that despite an overall year-to-date negative absorption of (299,953), the area absorbed 42,000 SF of vacant space in the second quarter.  West Columbia/Cayce was the largest contributor to the negative absorption experienced in the first half of 2012 with 457,686 SF of new vacancy being added to the market. The largest contributors were the Pella Windows building and Flextronics (portion) both in the CAE Industrial Park. 

Despite the downturn there were some notable expansions in the market including Harsco Rail which added a total of 100,000 square feet to be used for a regional parts warehouse at 1001 and 1005 Technology Drive.  Iron Mountain also signed a renewal and expansion of its footprint at 1061 Carolina Pines Road bringing its facility’s size to 116,000 SF.  Amazon moved into its new fulfillment center adding 1,016,000 SF of leased space to Lexington County.  Michelin has continued to experience success and growth in South Carolina and has announced plans to expand its operations in both Anderson and Lexington Counties.

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