The Greenville office market consists of 5.7 million square feet of multi-tenant office buildings situated in the Central Business District (CBD) and Suburban market. As of December 31, 2001, the overall Greenville office market was 82.6% occupied a decrease from 84.3% at year-end 2000. While net absorption for 2001 was strong at 220,500 square feet, 500,000 square feet of new construction was added to the existing inventory resulting in the decreased occupancy rate. The net absorption was driven primarily by companies with offices already in the market moving to larger Class A spaces. The major companies were Verizon, MetLife, and Day & Zimmerman in the suburbs and the Leatherwood Law firm in the CBD. It is important to note that 339,000 square feet has been identified as “available for sub-lease” at year-end 2001, and when the sublease square footage is added to direct lease square footage the overall market occupancy decreases to 76.7%.
The Greenville office market tends to have more sublease space than most markets due to the high concentration of engineering firms in the area. These firms are constantly responding to the increases and decreases in contract work. Combining this with some dot-com failures has resulted in a rise in sublease square footage available from 205,125 square feet at year-end 2000. It is also important to note that 190,000 square feet of the sublease space is located in the Fluor Daniel Complex in the suburbs. As of year-end 2001, the occupancy rate for Class A space was 83.4%. Average asking rental rates rose to $16.75 per square foot from $16.50 per square foot at year-end 2000.
Central Business District
The CBD turned in a good year with net absorption being 107,000 square feet.However, CBD occupancy decreased slightly from 83.7% at year-end 2000 to 83.4% due to a new 44,000 square foot office building that was added to the survey and a slight increase in vacancies. Two new major high-rise buildings were announced in late 2001, with both being under construction at year-end. The 108,000 square foot six story building, located at 200 E. Broad will be occupied by Elliott Davis LLP, with three other local tenants and will have approximately 30,000 square feet of excess space for lease. Developer Phil Hughes is building a four story, 75,000 square foot building located at the intersection of Spring Street and McBee Avenue with Suitt Construction and National Bank of SC taking all but 9,000 square feet of the building. Starmount, a Greensboro, NC based developer, put the old Memorial Auditorium site under contract and is attempting to pre-lease the building to allow them to begin construction.
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