The Greenville, South Carolina office market experienced a decline in occupancy over the first half of 2006, declining from 83.7% at year-end 2005 to 82.13% at mid-year 2006. Quoted rental rates increased slightly, averaging $15.79 per square foot at mid-year 2006, up from $15.71 per square foot at both mid-year and year-end 2005. This incremental increase in asking rates is due to lack of demand and productivity over the past six months and can be largely attributed to the rising costs of land, construction, utilities and interest rates.
The Central Business District absorbed 13,411 square feet over the first half of 2006, posting a mid-year occupancy of 88.4%. Leasing activity occurred primarily in the Class A market, which absorbed 22,588 square feet; the Class B and C markets both experienced declines in occupancy. Quoted rental rates in the Class A market increased to an average of $19.34 per square foot at mid-year 2006, up from $18.91 per square foot at year-end 2005. Quoted rents across the CBD increased 2.7% to $17.67 per square foot at mid-year 2006, largely due to increases in the Class A market.
New developments in the CBD are quickly drawing attention away from the traditional Main Street office environment with the new baseball stadium development in the WestEnd drawing in a mix of restaurants, shops and office space. The Vardry Center next to the stadium is almost fully occupied now that a real estate firm has purchased it and moved their offices in. The Field House at West End building overlooking the ball stadium announced that New York Life will occupy the top floor, which is about 13,000 square feet. Retail shops are quickly taking hold on the ground level of this facility.
The development at RiverPlace also continues to bring positive absorption to the Greenville CBD. The Bounce Advertising Agency announced it will occupy 17,000 square feet at the 130,000 square foot RiverPlace II building, currently under construction. The building, which is to be completed in early 2007, will also be the headquarters for Donald A. Gardner Architects. RiverPlace II will also include 27 luxury condominiums and ground floor retail space, next to the CBD’s newest hotel, Hampton Inn & Suites.
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