High Occupancy Driving Redevelopment but Not New Development
- Office users are moving to non-traditional spaces in the Central Business District.
- Speculative office construction will continue to be limited to small projects until rental rates are $28.00 per square foot or above for Class A space.
Downtown Columbia is accessible by three major interstates and has a well-established base of the region’s major employers. This trifecta, coupled with a growing population of millennials and young professionals, is bringing new attention to the Central Business District (CBD) and driving demand in the office market. There are few available large blocks of traditional office space and a lack of significant office development in the pipeline, encouraging a few expanding office users to consider repurposing older buildings into office space in the CBD and the immediate surrounding areas.
Accessibility plays a key factor in many employers’ location decisions. Encircled by three interstates, I-20, I-26 and I-77, the CBD is easily accessible as it is centrally located in relation to Columbia’s most desirable residential markets. The CBD is also home to some of the region’s largest employers, such as the State of South Carolina, Palmetto Health, University of South Carolina, Wells Fargo, Aflac, Seibels and AgFirst Farm Credit Bank. The recent boom in activity in the CBD has spurred new attention from employers, many choosing to locate here.
Increasing demand for downtown office space brought the occupancy rate to a record high of 90.6%, despite small fluctuations in occupancy over the course of 2016 due to tenants shifting between office buildings. This has left companies requiring large blocks of 20,000 square feet or more with few options in the district. Smaller tenants are also finding a limited number of options along the Main Street corridor.
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