Published Nov. 12, 2012
Although the vacancy rate for the Columbia area increased slightly in the third quarter, there are “consistent signs of a recovery” in the local economy, according to a commercial real estate report compiled by NAI Avant.
“If it weren’t for the state of South Carolina continuing to downsize, and in many cases vacating private sector office properties, the overall occupancy numbers would be significantly better,” said senior broker Paul Hartley in the report.
The area’s office market segment ended the third quarter with a vacancy rate of 10.7% and 224,065 more square feet to rent than the previous quarter, according to the report. The second-quarter vacancy rate was 10.1%, with negative absorption of 80,502 square feet.
Class “A” space in the Central Business District office submarket continues to be the one area that’s experiencing sustained activity, Hartley added.
For the third quarter, the Class “A” office vacancy rate was 11.9% and the average asking rental rate was $17.45 per square foot, the report said.
The downtown office market will improve once AgFirst Farm Credit Bank moves into 100,000 square feet of Class “A” space at the Bank of America Plaza. AgFirst is buying the plaza and vacating its present headquarters in the 1400 block of Hampton Street, outside the Central Business District.
Downtown office space, particularly the top-end Class “A” space, will be in demand as tenants seek a centrally located and nicer product, Hartley said.
And, as demand builds, rents will rise for Class “A” properties in the downtown business district.
“I anticipate by 2013 year-end the Class ‘A’ CBD (Central Business District) submarket will realize single-digit vacancy,” Hartley said.
Outside of the downtown business district, vacancy rates varied at the quarter’s end.
Southeast Columbia, for example, had a vacancy rate of 3.2%. It was followed by North Columbia, 4.3%; Cayce/West Columbia, 6.6%; Lexington, 8.2%; Dutch Fork/Irmo, 8.7%; Northeast Columbia, 8.9%; and Forest Acres and St. Andrews, both at 17.4%.
Asking rental rates in suburban markets ranged from $15.02 a square foot in Northeast Columbia to $10.16 in Southeast Columbia.