The Period of Build-to-Suits and Speculative Construction
- The overall vacancy rate remains steady over the previous year despite increased activity throughout the market. Given the limited available space in the market, most activity has involved build-to-suit and speculative construction.
- Capital investments in the Upstate remain strong, with over $367 million invested in the upstate thus far in 2015.
- Speculative development is strong as developers respond to the growing demand for industrial space in the region.
- Industrial-related employment is increasing, but at a slower pace than recent years.
The Greenville/Spartanburg, South Carolina market, comprised of Anderson, Cherokee, Greenville, Laurens, Pickens and Spartanburg counties, was traditionally thought of as a leading automotive manufacturing hub. However, improved logistics, tax incentives and a skilled labor force are attracting companies from a wide array of sectors seeking light manufacturing and assembly plants as well as distribution and warehouse space. The resulting effect has been a tightening industrial market with increasing rental rates, strong capital investment and significant construction activity.
While the existing labor pool has proved beneficial in attracting new manufacturers, some are beginning to see a shortage in available labor. As a response, the Center for Manufacturing Innovation is opening on the Clemson University International Center for Automotive Research (CU-ICAR) campus in Spring 2016. The center, which is under construction, will offer new approaches to manufacturing training education and workforce development. The graduates from the program will likely attract new manufacturers to the region.
As of the second quarter of 2015, the combined industrial and flex market had a vacancy rate of 8.2%, holding steady over the previous year, but remaining the lowest vacancy rate in a decade. The limited change in vacancy rate does not accurately depict the strong activity and interest in the market as many new investments are for build-to-suit and speculative industrial buildings.
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