Future Growth Depends on Speculative Developments
The Columbia, South Carolina industrial market welcomed new tenants during the third quarter of 2014, which ended with a vacancy rate of 5.63%, down from 6.27% at mid-year 2014 and 7.12% a year ago. Leasing and sales velocity continues, but at a slower pace due to diminishing availability of quality industrial space throughout the market. The market absorbed approximately 250,000 square feet of space during the third quarter of 2014. Currently, approximately 29% of the available space is below 50,000 SF.
Responding to the need for new industrial space, developers and county governments have several speculative industrial projects in the work. Two speculative industrial buildings, 60,200 and 70,200 square feet, are under construction at Shop Grove Commerce Park. The buildings are being developed by Boyd Development. Lexington County plans to develop a 120,000 square foot speculative industrial building in Saxe Gotha Industrial Park, which will be offered for sale or lease. The building, which is expandable to 180,000 square feet, will neighbor Nephron Pharmaceuticals and Amazon. The new buildings are anticipated to lease quickly. A speculative building at 1510 Key Road was leased by Trane USA at the onset of construction as was 35,000 square feet in the 70,000 square foot speculative building at Shop Grove industrial Park.
The Northeast Columbia and Southeast Columbia submarkets had the highest vacancy rates of 12.48% and 6.83%, respectively, at the end of the third quarter of 2014. Both submarkets have shown great improvement over the past year. The Northeast Columbia vacancy rate is down from 15.31% a year ago, and Southeast Columbia is down from 9.17% a year ago.
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