The office market in Greenville, South Carolina, experienced a modest amount of activity during the first half of 2009 posting a positive absorption of 12,485 square feet. Although inventory decreased ever so slightly, the amount of sublease space available to the market continued to impact rental rates as it created the perception of a “buyers market”. Average asking rental rates declined from $16.56 per square foot at year-end 2008 to $16.39 per square foot at mid-year 2009.
The amount of sublease space available to the market totaled 302,851 square feet at mid-year 2009, but the majority of this was limited to large blocks of space including IMI’s 52,631-square-foot office in the SunTrust Building on McBee Avenue, Lockheed Martin’s 76,249-square-foot building on Brookfield Parkway and Infor’s 120,000-square-foot block of space at Data Stream Plaza. Each of these blocks represents a unique situation and is not indicative of the market as a whole. For example, IMI, which performs marketing for resort properties, was forced to downsize due to the collapse of the real estate markets in major resort destinations. Additionally, Lockheed Martin consolidated their operations with more than four years left on their lease and Infor combined regional operations due to a corporate merger.
During the first half of 2009, many tenants used the perceived softness in the market to renegotiate existing and future lease terms. Landlords weary of future economic conditions were much more likely to offer concessions such as free rent in exchange for lease renewals. This trend may dissipate as we get closer to 2010 should economic conditions rebound.
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