Heightened Activity Ending the Year
The Greenville, SC office market ended the fourth quarter of 2013 with a lower total vacancy rate and positive absorption. The total vacancy rate for the market dropped to 17.95% from 20.18% during the third quarter and 18.90% at year-end 2012. Over 179,000 square feet of office space were absorbed during the quarter bringing the total net absorption to 198,248 square feet for the year. Average asking rental rates were up to $17.00 per square foot per year at the end of the fourth quarter from $16.59 per square per year at the end of the previous quarter.
The Greenville Area Development Corporation announced plans to increase their focus on engineering, finance and information technology firms, sectors which are already strong and present in the region. Successful recruitment of firms in these business sectors will prove beneficial to the Greenville office market as these are primarily office-using firms.
Central Business District Submarket
Greenville’s Central Business District (CBD) absorbed approximately 38,000 square feet of office space during the fourth quarter of 2013 yielding a total vacancy rate of 17.59% for the submarket. Overall rental rates averaged $18.64 per square foot at the end of the fourth quarter. This compares to the third quarter 2013 average rental rate of $18.78 and year-end 2012 average rental rate of $18.54 per square foot.
Greenville’s CBD continued to grow and receive attention through the fourth quarter completing the second half of 2013 with more planned hotels and multi-family complexes.
- A 156-room Embassy Suites hotel is planned on the Reedy River and is expected to open in 2016. Greenville-based Windsor-Aughtry Co. will be the developing the hotel which is to include a high-end restaurant and bar, a rooftop venue and the only year-round indoor swimming pool downtown.
- A planned Home 2 Suites by Hilton is up for review. The 117-room, 4-story hotel is planned for 350 North Main Street and will be developed by Sycamore Investment Group.
- A 140-room upscale boutique brand hotel is also up for review and will be located at River and Broad Streets.
- Earlier this year, McKibbon Hotel Group, Inc. announced plans to open an Aloft Hotel over Greenville’s new parking garage. The hotel which will have 144 rooms and an outdoor pool is expected to open in early 2015.
- The Beach Company plans to begin construction on its 225 unit apartment complex on a 4.7 acre site at the corner of Stone Avenue and North Main Street. The complex is to include 21,000 square feet of retail space. The company is also planning a 348 unit multifamily complex at the intersection of Church Street and University Ridge.
The development of apartment complexes and hotels in the CBD coupled with new retailers and restaurants entering the market will prove beneficial to the office market as a vibrant downtown and healthy economic environment is attractive to tenants looking for office space.
Greenville County officials are contemplating giving up County Square and providing a new redevelopment opportunity. County Square sits on 32 acres in Downtown Greenville along a strip of ongoing development projects. Currently, the county offices occupy a one-story shopping center, but are thinking about constructing a high-rise building on the property which they will occupy allowing for private development on the remainder of the property.
Earlier this year, Hughes Development purchased the 196,000 square foot Bank of America Plaza for $9.8 million with plans to redevelop the office building and retail space on the main level. Hughes Development also owns the office building at 2 N. Main Street, formerly home of Windstream Corp. If the buildings are redeveloped, they will add a substantial amount of quality office space to the CBD.
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