High occupancy and nominal construction limit absorption
- Vacancy rates were slightly lower during the fourth quarter of 2018 and, with no new construction underway, are expected to drop further in the next few quarters.
- Core rental rates have decreased significantly because prime retail spaces that were available one year ago are now leased.
2018 Market Recap
The Greenville-Spartanburg-Anderson retail market is comprised of approximately 17.11 million square feet of core and non-core shopping center space. Since the fourth quarter of last year, the vacancy rate has dropped 10 basis points from 10.14% during the fourth quarter of 2017 to 10.04% during the fourth quarter of this year. While the vacancy rate dropped, the market posted a net negative annual absorption of 7,945 square feet. Over the past year, the triple net overall average weighted shop space rental rate has decreased from $13.34 per square foot during the fourth quarter of last year down to $8.90 per square foot during the fourth quarter of 2018 because the higher quality spaces are all being absorbed. Likewise, core rental rates have drastically decreased because prime retail spaces that were available one year ago are now leased; therefore, the weighted rental rates for the remaining core retail spaces were much lower during the fourth quarter of 2018.
The Greenville-Spartanburg-Anderson retail market is comprised of 17,105,581 square feet of retail space within 26 submarkets. The market absorbed 20,184 square feet of retail space this quarter, and the vacancy rate dropped from 10.16% during the third quarter of 2018 to 10.04% this quarter. Most of the positive absorption occurred within the non-core submarkets of Belton/Honea Park, White Horse Road/Berea and the East Side, while the core submarkets posted a net negative absorption of 5,023 square feet.
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