Stagnant Economy Results in a Flat Office Market, Strong Gains Likely for 2013
Leasing activity in the Columbia office market remained active but the third quarter ended with a slight increase in vacancy of 0.02%, reflecting a negative absorption of 1,341 square feet. The CBD and Suburban submarkets ended the third quarter with vacancy rates of 22.61% and 24.04%, respectively. However Class A vacancies in the CBD are 13.59% while the Class A market in the suburban market stands at 13.77% vacant. Rental rates remained unchanged in the market. Uncertainty in the direction of the economy’s future has made businesses reluctant to engage in transactions and long term investments as they await the outcome of the presidential election.
While the outlook of the market is optimistic, the pace of improvement was slow in the third quarter. Columbia’s unemployment rate remained steady at 8.4% in August, 1.2% lower than South Carolina’s rate. In comparison, the national unemployment rate dropped to 7.8% in September, falling below 8% for the first time since January 2009. Part of the decrease in unemployment rate came from the surge in part time jobs caused by the lack of demand for full time employees.
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