Columbia steadily moving toward development
In January 2018, Colliers International benchmarked its office data set for South Carolina. The new standard includes: all office buildings 10,000 square feet or larger, except medical office and govern-ment-owned buildings; all single tenant office buildings; buildings in an expanded geography; data for all quarters beginning in Q4 2008; and excluding office condominiums. In addition, the submarkets are sepa-rated by class levels A, B and C (A being the highest quality space and C being of lesser quality), and are also divided into 2 divisions: Central Business District (CBD) and Suburban. The Central Business District submarket consists of a highly-populated business area with infrastructure and an office building/high-rise environment, which is often accompanied by heavy daytime foot traffic. A Suburban submarket is an area or town existing as a mixed-use community within commuting distance of a larger city. Due to the adjustments of the building inventory, comparison of data included in previously published market reports should be avoided.
- Upgrading spaces will raise rental rates and office property values, eventually pushing the market toward new development.
- Worker-readiness programs such as readySC and Apprenticeship Carolina prepare a workforce of customized talent.
The Central Business District office vacancy is low at 11.56% for all classes of buildings, and while overall average full-service market rental rates are gradually on the rise within the Central Business District, there is a considerable rate gap between current rental rates and rental rates high enough to spur new downtown office development. However, the Columbia market dynamic is prime for development in every other aspect. There are several factors that contribute to creating an environment healthy for office development, such as: central location, strong economic drivers, economic and employment expansion, workforce readiness, and population growth.
Accessibility plays a key factor in many employers’ location decisions. Columbia is encircled by three major interstates: I-20, I-26 and I-77. The CBD is centrally located and easily accessible in relation to Columbia’s most desirable residential markets. In addition, Columbia’s base of strong economic drivers include some of the region’s largest employers, such as the State of South Carolina, Palmetto Health, the University of South Carolina, Blue Cross Blue Shield, Lexington Medical Center, Fort Jackson, Colonial Life, Amazon, Aflac and AgFirst Farm Credit Bank. Strong economic contributions create a robust market, which is critical to growing the local economy. During 2017, six major Columbia office buildings traded within 10 months, which is an indication investment is thriving in Columbia and has the attention of national institutional investors. Also, as of April 2018, the national economic growth is in its 106th month of recovery and consumer confidence is strong.
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