Columbia, S.C. – Newmark Grubb Wilson Kibler, a leading real estate services firm, has released its fourth quarter 2016 market reports.
Columbia’s office market ended the year with overall positive absorption, despite a fourth quarter dip. Overall, the Columbia office market remained stable. Most of the positive absorption occurred outside of the Central Business District in the North Columbia, Forest Acres and Northeast Columbia submarkets. Average rental rates continued to climb to $16.97 per square foot in the fourth quarter, up $0.17 per square foot from the previous quarter. Vacancy in the Columbia office market remained steady at 9.2% (from 9.0% in the previous quarter).
Class A office rental rates reached $20.97 per square foot across the market as a whole, climbing $0.19 over the course of the fourth quarter. However, Class A vacancy did increase slightly from 12.3% in the third quarter to 13.6% in the fourth. Class B and C vacancies remained mostly steady, with Class B office space declining slightly by 0.04% and Class C space increasing slightly by 0.03%.
Significant office sales transactions included:
· 6437 Garners Ferry Road, home to the Columbia Regional Benefits Office, sold for $25.65 million.
· 10309 Wilson Boulevard in Blythewood, S.C. sold for $19.2 million in a sale-leaseback transaction executed by Atos IT Solutions, a subsidiary of Xerox
· Westpark Office Park sold for $9 million to RealOp investments
Overall, 2016 was a balanced year for the Columbia metro office market. However, there is a notable lack of construction on the books. Growth could be limited in 2017 without additional investments in new square footage.
The 2016 Columbia industrial market ended on a positive note, with nearly 340,000 square feet positively absorbed. While the fourth quarter did see a -180,500 square feet absorption dip, it was a 38% reduction in negative absorption than the fourth quarter of 2015. This dip slightly affected industrial market vacancy, pushing numbers up over 8.2% from 7.8% in the previous quarter.
The Lexington industrial submarket continues to command the lowest vacancy rate at less than 1.0% and rates pushing $5.53 per square foot. Cayce/West Columbia, the largest submarket in the area, has a vacancy rate of 2.1% with total rates just nearing $3.80 per square foot.
During the fourth quarter of 2016, over $11 million was spent in new acquisitions in the Columbia industrial market. Significant transactions included the sale of 222 Old Wire Rd. for $5.7 million to Stag Industrial Holdings on the contingency that the building’s lease is executed upon delivery. Amazon will occupy the space, which is located near the existing West Columbia fulfillment center. The space will be the new home of Amazon’s book-binding operation, which formerly occupied space in Charleston, S.C.
The 12th Street Extension, which leads to Old Wire Rd. and services the existing Amazon facility, as well as Nephron Pharmaceuticals, will be expanding to Exit 119 on I-26. This expansion, along with the Bluff Rd. widening project will allow additional growth in the burgeoning industrial district surrounding the interchange of I-77 and I-26.
China Jushi, the closely followed new fiberglass manufacturing plant, broke ground during the fourth quarter in the expanding Shop Rd. industrial area. The international firm is expected to bring 400 new jobs to the area, as well as an estimated $300 million in development.
Looking ahead in 2017, industrial vacancy rates are expected to decline in the Columbia area. Although average rental rates declined late in the fourth quarter, they should remain stable and increase over the next 12 month cycle.
To view full reports for Charleston, Greenville and Columbia please visit www.wilsonkibler.com/research.