Growth in the health care industry is leading to expansion of medical services in suburban areas of Lexington and Richland counties, Colliers International reports. In the second quarter, the vacancy rate for medical office space fell below 10% for the first time in more than four years.
Published Sept. 13, 2012
The vacancy rate for medical office space fell below 10% for the first time in more than four years, according to a local market report released Thursday by Colliers International.
The overall vacancy rate for the Columbia area fell to 5.86% in the second quarter compared with 12.45% for the same period in 2011, the report said.
The second quarter ended with 167,865 square feet of space available for leasing, compared with 356,777 square feet for the same period in 2011.
The area has about 2.9 million square feet of medical office space.
Much of the increased leasing activity is attributed to expansion of health care services in the suburban areas of Lexington and Richland counties, the commercial real estate firm said.
“A new outlook on patient care services has created a shift from inpatient to outpatient treatments,” Colliers reported. “Consequently, some medical practices are choosing to locate close to suburban neighborhoods while others are focused towards locations within medical office buildings on hospital campuses. Hospitals as well as practices continue to reposition as the ever-changing health care industry evolves.”
The report noted that construction of the $99 million Palmetto Health Baptist Parkridge Hospital at the intersection of Interstate 26 and Lake Murray Boulevard is under way. Also, an 80,000-square-foot medical office building is planned for the campus.
“The opening of the campus is predicted to stimulate economic development as it will likely attract businesses such as physician offices, medical equipment suppliers, hotels and restaurants to the area,” the report said.
Vacancy rates for medical offices are expected to remain low in the months ahead while rental rates will rise as space tightens.
“With health care demand on the rise, speculation suggests that the medical office market will have a great influence on the economy,” the report said.
Among submarkets, the downtown Central Business District had the lowest vacancy rate for the second quarter at 1.9%, followed by Lexington, 2.83%; northeast Columbia, 4.23%; north Columbia, 6.5%; Irmo, 7.25%; and Forest Acres, 19.15%.
The average asking rental rate for medical office space in the Columbia market was $20.75 per square foot.