Columbia Industrial Market Continues to Thrive Despite National Economic Concerns
For most of the period since May, the yield spread has been negative as a result of tightening monetary policy—a reflection of investor pessimism about inflation and growth that has been exacerbated by the trade war. In early October, though, the spread turned slightly positive following the announcement that the United States and China had reached a trade agreement. The deal was modest and largely just delayed another tariff increase on US exports from China that was to occur in October. The deal did not address additional US tariffs set to be implemented on December 15th, though, and the president has said the initial agreement is just one of three phases of a larger agreement, leaving an air of uncertainty lingering over the economy. Beyond the trade war with China, much will also depend on what the Federal Reserve does moving forward.
Several factors make Columbia “recession-resistant,” including its position as the state’s capital and the presence of tenured professors at the University of South Carolina. Columbia’s industrial market is thriving and even growing despite national economic concerns. The South Carolina Ports Authority continues to report record cargo volumes and industrial real estate is performing exceptionally well. Vacancy is down to 4.5% from 6.5% last year and has fallen nearly 52% since 2015 when 9.2% of available property sat empty. Further, if the momentum continues, the Columbia market is set to see a net absorption of nearly 1 million square feet by year-end. There are currently two industrial properties under construction, the 200,000-square-foot Midway Logistics Building IV in the Lexington County Industrial Park, which will partially be occupied by Unum Group, and 70,000 SF in the Shop Grove Commerce Park, which is set to deliver in the fourth quarter.
Lexington County Economic Development announced this quarter that the number of active projects in the pipeline is up to 15, six more than the previous quarter, and they have the potential to generate $639.3 million in new investment and the creation of 1,619 new jobs.
Additionally, the following major announcements were made in Q3:
• GE Appliances announced plans to invest $60 million in a water heater manufacturing center at its Camden plant located at 50 Haier Blvd.
• Richland County has purchased more than 1,300 acres in Blythewood to develop into a Class A business park for approximately $26 million. The Blythewood Business Park site is located off Interstate 77 and includes enough space to build 5.3 million square feet of Class A office space and manufacturing buildings.
•Trane completed a $100 million-plus addition to its manufacturing plant at 400 Killian Rd. in August, bringing it to 1 million SF.