Investments Continue to Heat Up the Market
The second quarter of 2014 was full of investments and new manufacturers announcing plans to enter the Greenville/Spartanburg industrial market, but leasing and sales volume remained low. The Greenville/Spartanburg industrial market, comprised of Anderson, Cherokee, Greenville, Laurens, Pickens, and Spartanburg Counties, ended the first half of 2014 with an overall vacancy rate of 8.71%, down slightly from 9.1% at the end of the first quarter of 2014. Anderson, Greenville and Spartanburg Counties had total vacancy rates of 5.0%, 8.8% and 8.6%, respectively, for the combined industrial and flex market. Overall asking rental rates held steady at $3.05 NNN through the second quarter.
The market’s low and stable vacancy rate illustrates the demand for the quality industrial space. While the demand is apparent throughout South Carolina, speculative development has been predominant in the Upstate with some projects already under construction and others planned. White Horse Industrial Park will add approximately 540,000 square feet of industrial space to the Upstate market with 304,000 square feet under construction and 236,000 square feet planned. Logue Park and Hillside Industrial Park are currently under construction and will add approximately 200,000 square feet of industrial space to the upstate inventory upon completion. Further speculative development is anticipated for the Greenville/Spartanburg market due to successful pre-leasing of current projects and prospective tenants’ high demand for available move-in ready space.
Sales activity was up during the second quarter with the sale of 15 Tyger River Road in Duncan, South Carolina. Global Automotive Partners (GAP, Inc) is the tenant in the 202,104 square foot industrial facility. Exeter acquired the building from Hillside Investments LLC. Another sale involved Reger Holdings of New York, which acquired a 162,400 square foot building at 220 Commerce Drive for $2.35 million. Reger Holdings also acquired two industrial buildings in Lugoff and Sumter.
The overall vacancy rate for industrial space in the Greenville/Spartanburg was down to 8.2% at the end of the second quarter of 2014 from 8.6% at the end of the previous quarter. The average asking rental rate was steady at $2.88 NNN. The Anderson, Greenville and Spartanburg industrial vacancy rates were 5.0%, 7.6% and 8.5%, respectively. Greenville County had the highest average asking rental rate of $3.14 NNN at the end of the second quarter of 2014. Lease transaction velocity has been slow during the first half of 2014 as major announcements and investments have involved new construction and expansions.
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