Published Feb. 5, 2013
The Columbia-area retail market slipped to its lowest vacancy rate in three years as national merchants expanded their operations, according to Colliers International’s latest quarterly report.
The market’s vacancy rate dropped 26 basis points since mid-year and finished 2012 at 8.14%, the commercial real estate firm said. In a year-to-year comparison, the fourth-quarter vacancy rate dropped more than a half-point from 8.68%, which was recorded at the end of 2011.
Several factors influenced the falling vacancy rate, Colliers said.
“While other markets were adversely affected by the recent recession, Columbia’s retail market stayed afloat due to lack of overdevelopment in pre-recession years,” Colliers said.
Although closings of national retailers left big-box retail space vacant, the facilities have been filled by other retailers moving to or expanding in the market.
Examples include Whole Foods Market, which last fall opened its first Midlands store at the redeveloped Cross Hill Market in southeast Columbia, Colliers noted.
Another national retailer, Home Goods, opened shop in northeast Columbia at the Village at Sandhill, and Trader Joe’s plans to open its first Midlands store at the end of the first quarter in Forest Acres.
But while room for retailers is shrinking, the average asking rental rates for anchor, junior anchor and shop space were lower than six months earlier, Colliers said.
The average asking rent at the end of the fourth quarter was $13.53 per square foot compared with $14.13 at the end of the second quarter. At the end of 2011, the average asking rent was $12.06 per square foot.
Forest Acres had the highest average asking rent at $18.99 per square foot, followed by northeast Richland at $15.71; downtown, $12.92; southeast Columbia, $12.74; Cayce/West Columbia, $12.55; Harbison/St. Andrews, $12.44; Lexington, $12.17; and north Columbia, $10.24.
About 565,500 square feet of retail space remains available in the Columbia area. The Harbison/St. Andrews market had 206,804 square feet of retail space available, followed by northeast Richland, 183,876 square feet; southeast Columbia, 48,333; Lexington, 47,909; Cayce/West Columbia, 34,059; north Columbia, 26,948; Forest Acres, 10,394; and downtown Columbia, 7,200.
Colliers expects improvement in the retail market to continue through 2013 with space getting tighter and rents going higher. Construction projects also may be on the horizon as the economy improves.
Recent announcements of new student housing projects also could benefit the downtown retail market, the report said.