Strong Activity is Expanding the Market
- The Greenville/ Spartanburg Industrial market has seen quick absorption of recently delivered speculative space. The large number of users moving to the market are expected to absorb the speculative space set to deliver by the end of the year.
- Brexit and the pending United States presidential election leave uncertainty in local, national, and global markets. Businesses will be more cautious when making decisions through the rest of 2016.
- Long term, the outlook is bright for the Greenville/ Spartanburg industrial market. Expansion and improvement of South Carolina’s ports and infrastructure, coupled with the expansion of the Panama Canal will continue to attract investment to the Upstate.
Rapid Absorption Sustains Higher Asking Rental Rates
The Greenville/Spartanburg industrial market is the largest in the state and continues to see robust interest from domestic and foreign companies. Companies choose the Greenville/Spartanburg market for its recurring recognitions for strong workforce, efficient logistics, and low cost of doing business. These recognitions led South Carolina to another Gold Shovel award for 2015 by Area Development magazine. The Upstate is continuously improving efforts to keep and attract new companies to the region and is expected to see more investments throughout the year.
This quarter saw an increase in leasing activity with more than 4.26 million square feet absorbed dropping the vacancy rate to 7.0% from 7.7% a year ago. The large absorption is attributed to the delivery of three build to suit developments, Rite Aid, Dollar Tree and Techtronic Industries. New speculative buildings are leasing quickly, as well as existing vacancies in the market which are being occupied by companies willing to renovate the space to meet their needs. Average asking rental rates are matching the demand, rising to $3.49 NNN per square foot (PSF/YR) this quarter from $3.05 NNN PSF/YR two years ago.
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