Major projects continue to land in the Upstate
- Development pipeline continues to grow.
- Vacancy and rents stabilize at historically low levels.
The Greenville-Spartanburg-Anderson market continued its expansion in the third quarter. 853,100 square feet of new buildings have been added year to date, 643,000 square feet were absorbed over the quarter and overall rent levels were stable. Multiple major manufacturing and warehouse projects neared occupancy (Michelin distribution, Ritrama, Schedle, GE) while automotive suppliers and logistics providers continued their expansion market wide.
The warehouse/distribution sector comprises the largest portion of the Greenville-Spartanburg-Anderson industrial market, with slightly more than 171 million square feet. At the end of the third quarter of 2017 vacancy had fallen slightly to 6.70%. Rents were stable, with many properties in the development pipeline and 504,202 square feet absorbed in the previous quarter. The average triple net rent for Class A warehouse space was $5.50 per square foot per year.
The Upstate is a manufacturing powerhouse. It is home to BMW, General Electric, Michelin and Lockheed Martin while a lengthy list of international firms are investing in substantial facilities that will create permanent regional employment and demand for their suppliers. At the end of the second quarter, there were 15 million square feet of manufacturing buildings. 144,000 square feet were absorbed and vacancy rose slightly to 5.72%. Triple net rents in the manufacturing sector were $4.41 per square foot per year.
Vacancy in the flex market rose slightly to 9.80% in the third quarter of 2017. There was 5,040 square feet of net negative absorption with no new buildings added. The average triple net rental rate fell this quarter at $7.67 per square foot per year.
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