Industrial Development Continues in Second Quarter
- Large waves of construction are underway.
- The flex market continues to be under-supplied.
The Greenville-Spartanburg-Anderson market had a relatively slow second quarter but the overall health looked strong. Vacancy increased slightly to 6.73%, with 301,825 square feet of net negative absorption. More than 5.26 million square feet of space were added to the market over the last 12 months. Rents remained steady and the pipeline of future construction was very strong, with 5.6 million square feet of additional space under construction.
The warehouse/distribution sector constitutes the largest portion of the Greenville-Spartanburg-Anderson industrial market, with slightly more than 171 million square feet. At the end of the second quarter of 2017 vacancy had risen to 6.73%. Rents were stable, with many properties in the development pipeline and 2.1 million square feet absorbed in the previous quarter. The average rent for Class A warehouse space was $4.25 per square foot per year triple net.
The Upstate is a manufacturing powerhouse. It is home to BMW, General Electric and Lockheed Martin. At the end of the second quarter, there were 15 million square feet of manufacturing buildings. During the quarter, 34,400 square feet were absorbed and vacancy fell to 5.27%. Rents in the manufacturing sector were $3.10 per square foot per year triple net.
Vacancy in the flex market rose slightly to 9.59% in the second quarter of 2017. There were 1,173 square feet of net negative absorption, with a 45,000-square-foot building added. The average rental rate was stable this quarter at $8.75 per square foot per year triple net.
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