Retail Market Rings in the New Year with Strong Momentum
- The vacancy rate for the Greenville, SC retail market is declining as retailer interest throughout the market remains strong.
- Asking rental rates are climbing as new product delivers and demand for space is robust.
- Downtown Greenville remains the focal point of the market for many retailers, but the suburban submarkets are also welcoming significant activity.
- The market’s outlook is positive and will likely see continued growth.
Healthy Demand for Space Contributes to Tight Market
Retailers are showing robust interest in the Greenville/Spartanburg, South Carolina retail market, contributing to declining vacancy rates. The first quarter of 2016 came to a close with a total vacancy rate of 11.7%, down from 11.9% the previous quarter and 12.7% one year ago. The vacancy rate has been steadily decreasing over recent quarters but does not accurately depict true market conditions as much of the activity has been occurring in smaller, non-anchored centers that are not included in the tracked inventory.
Retailers are expressing a desire to locate at prime intersections with high visibility and traffic counts. As a result, the vacancy rates in these retail corridors are very low and quality space is difficult to find. In an effort to meet the demand for space, the market has welcomed several redevelopments and new construction projects. Rising land costs, construction costs and competition among retailers are collectively contributing to higher rental rates.
Asking rental rates for shop space in the market averaged $12.61 triple net per square foot (NNN PSF) at the end of the first quarter of 2016, up from $12.53 NNN PSF the previous quarter and $11.64 NNN PSF one year ago. The Woodruff Road retail corridor is home to the highest suburban asking rental rates with asking rental rates for shop space averaging $34.02 NNN PSF. The submarket is home to Magnolia Park, the redevelopment of the former Greenville Mall that has been successfully attracting retailers looking for space in the market. Magnolia Park is home to Cabela’s, Dave & Busters, Toys ‘R Us, Babies ‘R Us, Nordstrom Rack, Bad Daddy’s Burger Bar, and Grimaldi’s Pizzeria, among others. Atlanta-based Tin Lizzy’s Cantina and Tucanos Brazilian Grill will be opening soon at the center.
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