The industrial market in South Carolina’s upstate experienced a degree of volatility in during the first half of 2009. However, as the national economy experienced improvement during the last two quarters of the year the market experienced a rebound that resulted in an occupancy rate of 11.9% at year-end 2009.
Although occupancy ended the year on a stable note, rental rates remained much more volatile experiencing downturns by as much as 30% in some areas. Savvy landlords with Class A buildings were negotiating leases in the low $3.00 per square foot range at year-end 2009, down from previous asking rates of as much as $4.50 per square foot. This reduction in rent is being negotiated on shorter-term deals, ranging from one to three years, and allows landlords to receive income on otherwise vacant properties. By doing shorter-term deals, landlords are optimistic that rental rates will increase as the global economy rebounds.
The metal market in the Upstate experienced a significant decline in occupancy during the first half of 2009, but began to rebound during the second half. Absorption is expected to increase significantly during the first quarter of 2010 and the market may experience as much as 1,000,000 square feet of metal absorption by the end of the second quarter. This absorption will be largely be attributable to the expansion at BMW; the auto manufacturer is scheduled to produce between 400 and 500 additional vehicles per day in 2010 and suppliers are anticipating an increase in business. Rental rates for the metal market ranged between $1.50 and $2.50 per square foot at year-end 2009, and should remain stable during 2010.
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