Columbia Office Activity Accelerates into 2015
- Rental rates are increasing significantly as the Columbia, SC office market continues to tighten. Vacancy rates are on the decline and large blocks of contiguous Class A office space remain in low supply. Effectively, quality space is scarce with prices increasing.
- Overall market rental rates are 5.3% higher than year-end 2013, reaching record highs averaging $16.15 per square foot at year-end 2014.
- Office market conditions closely mirror those of other Southeastern markets, such as Charlotte, Raleigh and Atlanta, which are also seeing record high rental rates and low vacancy. New construction in recent quarters, though limited, has successfully attracted tenants in nearby markets.
2014 was a pivotal year for the Columbia office market as rental rates saw the greatest jump in the history of market statistics. Average rental rates increased by 5.3% in one year alone. Rental rates for office space in the overall market were up to historical rates at year-end 2014 and averaged $16.15 per square foot per year. Within the last two years, average rental rates have increased nearly 10%. Class A rental rates for the overall market averaged $19.48 at the end of the fourth quarter of 2014, 3.3% higher than year-end 2013. Rental rates have steadily trended upwards, especially in the Central Business District (CBD), over the past two years and are expected to climb further throughout the market.
Higher rental rates are the result of what has become a pro-landlord environment, with tightening availability as quality office space remains in low supply. The vacancy rate for all classes of space within the market was reduced to 16.28% at the end of the fourth quarter of 2014, down from 16.77% at the end of the third quarter of 2014 and 17.55% at year-end of 2013. The Class A vacancy rate for the overall market was down to 12.86% with less than 400,000 square feet of vacant space and a very limited supply of blocks of space over 20,000 square feet. The suburban submarkets experienced greater leasing activity than the CBD in 2014 absorbing approximately 64,000 square feet of the total 121,517 square feet absorbed by the overall market in 2014. The suburban submarkets are benefiting from a spillover effect of tenants unable to find space in the CBD, a trend which is expected to continue as new supply remains absent from the market.
Download the full report
For more information, including the market summary statistics, download the full research report.Download report