Greenville Office Market Conditions Remain Steady in 2012
The Greenville, SC office market ended 2012 with a total vacancy rate of 17.18%, the same vacancy rate it was a year ago. Leasing activity remained steady throughout the year keeping overall vacancy rates stable in the 16% to 18% range in 2012. The total vacancy rate increased 105 basis points in the fourth quarter from the third quarter vacancy rate of 16.13%. Much of the increase in vacancy can be attributed to the negative net absorption in CBD Class A office space. The average market rental rate at year-end 2012 showed a 2.3% increase from the third quarter but was just eight cents higher than year-end 2011.
Central Business District Submarket
The Greenville CBD underwent negative net absorption in the fourth quarter and consequently an increase in vacancy rate of 3.44 percentage points from the previous quarter. Class A CBD rental rates spiked 6% from an average rental rate of $18.76 in the third quarter of 2012 to $19.90 at year-end 2012. Despite this significant spike, the average rental rate remains lower than the average rate of $20.61 at year-end 2011.
Construction continues on ONE Greenville, a 395,000 square foot Class A mixed use project which will bring a unique office and retail experience to the Greenville CBD. Phase I of the project is nearing completion and Phase II is anticipated to be complete in late 2013. Interest in the new office building has resulted in numerous pre-lease signings bringing the building to near full occupancy. Delivery of ONE will prove beneficial to the Greenville CBD overall but will adversely affect other office buildings as currently evidenced by an increase in available space on the market.
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