Columbia’s Industrial Market Takes a Step in the Right Direction
Columbia’s Industrial Market absorbed 178,479 square feet in the third quarter of 2012 reversing a negative absorption trend that began in the first quarter and remained relatively flat through the second quarter. An interesting aspect of the third quarter positive absorption is that it was not the result of one or two large leases but rather a string of smaller 10,000 to 30,000 square feet leases primarily in Southeast Richland County, an area with the greatest amount of smaller (10,000 to 50,000 square feet) space availability in the market. Southeast Richland County absorbed 210,373 square feet in the third quarter dropping the vacancy rate in this submarket from 11.61% at the end of the second quarter to 8.54% at the end of the third quarter. Northeast Columbia, having the largest amount of Big Box Space (100,000 to 350,000 square feet), remained flat in the third quarter with zero absorption and a vacancy rate of 26.55%, still the highest ranked in the region. Despite the high vacancy rate, optimism continues in regards to the future of the Northeast submarket as the availability of modern class A industrial space is critically low throughout South Carolina.
The contrast between the Southeast Richland and Northeast Columbia submarkets summarizes the story of Columbia’s overall year to date activity. To put it in football terms, the market is not seeing big plays but instead there is good blocking, tackling and lots of first downs.
Columbia’s industrial market experienced positive absorption, a decreased vacancy rate and flat rental rates in the third quarter of 2012. The industrial sector continues to be a strong factor in South Carolina’s economy. With its strong labor force, superior infrastructure, available facilities, and strategic location, Columbia is poised to get its share of South Carolina’s manufacturing growth in 2013.
Construction continues at Saxe Gotha Industrial Park with the development of Nephron Pharmaceutical’s 400,000 square foot building. Avtec, formerly located in Gilbert, will begin construction on a new 46,000 square foot facility in Lexington during the fourth quarter.
On a regional note Childress Kline is building the first significant Industrial Spec building along the I-77 corridor between Columbia and Charlotte since 2008. The 270,400 square foot building, with 70,000 square feet pre-leased to Everett Logistics, will be located in the South Charlotte Market near Carowinds and offers 200,000 square feet of available spec space at an asking rental rate of $4.25 PSF NNN. Owners in the nearby Northeast Richland County submarket are hopeful that the lack of large blocks of Class A space on a regional level coupled with the higher rental rates required for new construction will lead to more activity in 2013 for this struggling submarket.
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