The Greenville office market continued to strengthen throughout 2005. Central Business District (“CBD”) occupancies increased 1.9% since midyear. The struggling suburban office market occupancies increased 2.6% during the same time period. Large office vacancies experienced in the early 2000’s were being absorbed with new and expanding tenants, fueled partially by increased employment and interest rates. Increased building and land costs make it more difficult for office users to construct their own buildings.
With Greenville’s attractive business climate, new companies have emerged, expanding and filling up large, dark spaces. Reported rental rates remained relatively flat, while occupancy rates rose. The total market average quoted rental rates from 2005 mid-year to year-end remained unchanged at $15.71.
From mid-year 2005 to year-end 2005, overall occupancy rates increased from 81.2% to 83.7%, a 2.5% jump and a 7.4% rise from a year ago. Given the pace of growing leasing activity, Class A property landlords gave fewer tenant concessions in the form of free rent and tenant improvement allowances. Class B properties showed an improvement in occupancy rates but still used generous incentives to drive prospect activity.
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