The Greenville, South Carolina, office market continued to hold its own amidst a national economic downturn during 2008. The office market posted 71,468 square feet of absorption in the six months prior to year-end 2008, which resulted in an overall occupancy rate of 83.66%. During the twelve month period ending December 31, 2008, the Greenville office market absorbed 162,928 square feet of space. The market also increased in size by 400,000 square feet during this period due to conversion of single-tenant space to multi-tenant space.
Employment for the Greenville Metropolitan Statistical Area (MSA) held steady while unemployment across South Carolina continuously increased throughout 2008. From November 2007 to November 2008, total employment in the MSA declined by only 1,000 jobs, or 0.30% of total employment. This compares favorably to the State of South Carolina, which experienced a loss of 42,800 jobs (2.20% of total employment) during this same period.
Greenville’s Central Business District experienced positive absorption of 37,647 square feet from mid-year 2008 to year-end 2008. Although the market was able to absorb space during the last six months of the year, large blocks of sublease space became available during 2008 which could have a negative impact on the market in 2009. At year-end there was 95,387 square feet of sublease space available, of which 91,088 square feet was Class A space. With such large blocks of space available for sublease, landlords may be required to offer concessions in order to compete for tenants.
The suburban office market experienced activity similar to that of the CBD during the last half of 2008, absorbing 33,821 square feet. Even with this slight increase in occupied space, there was 206,299 square feet of sublease space available in the suburban market at year-end. The majority of this space was concentrated to the Lockheed Martin Building on Brookfield Parkway. Due to the large number of engineering and global logistics companies in the suburban market, an additional increase of sublease space may be in store during 2009.
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