New Retail Construction Continues to Heat Up the Market
- Construction is on the rise throughout the market.
- Vacancy rate holding steady despite significant activity.
- Rental rates for shop space are trending upwards.
- Downtown’s Vista entertainment district welcomes new restaurants.
Columbia, South Carolina continues to transform into a retail destination with new retailers and restaurants entering the market as construction activity picks up. Driving downtown or along any major retail corridor, signs of construction are evident. Downtown residential projects are leading redevelopments along Gervais Street in the Vista and attracting new restaurants to the entertainment district. The suburban submarkets are also seeing increased activity with the construction of new retail centers. Despite the heightened interest in the market, the vacancy rate showed little change throughout the first quarter of 2015, declining 10 basis points to 8.2% over year-end 2014. Rental rates are trending upwards throughout the market and will increase further as new retail space delivers to the market. Asking rental rates for shop space averaged $12.94 NNN at the end of the first quarter of 2015, up from $12.73 NNN at year-end 2014. Asking rental rates for anchor and junior anchor space averaged $7.51 NNN and $7.65 NNN, respectively, at the end of the first quarter of 2015.
As expected with a growing retail market and improving economy, the Columbia, SC MSA experienced increased sales during the 2014 holiday season, which continued into 2015. According to the South Carolina Department of Revenue, gross retail sales for the Columbia, SC MSA totaled $2.4 billion in December 2014, 7.6% higher than December 2013 sales and 14.1% higher than December 2011 sales. January 2015 sales volume was reportedly 3.2% higher than January 2014. Lexington and Richland counties experienced the greatest sales activity with combined sales of $1.6B in January 2015.
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