Shortage of Quality Industrial Space Creates Demand for New Construction

November 4, 2013 

MARKET OVERVIEW

The Upstate of South Carolina continued to excel during the third quarter of 2013 with new companies announcing plans to enter the market and existing ones undergoing expansions.  Ongoing success of businesses in the region resulted in an 8.92% total vacancy rate for the  industrial and flex markets at the end third quarter of 2013, its sixth consecutive quarter of positive absorption and decreased vacancy.  As anticipated due to limited available space, overall average asking rental rates increased to $3.03 NNN from the second quarter 2013 average asking rate of $2.98 NNN.
 
Manufacturers and distribution companies are thriving in the market which provides them with tax incentives, efficient logistics and a skilled labor force backed by growing technical training and research programs in the region.
 
>  Greenville Technical College recently received approval from Greenville County Council for a $25 million bond issue to build an industrial job training campus.

>  The faculty at Clemson University International Center for Automotive Research received $4.5 million in rewards over the past year for research and sponsored programs.  The awards have funded 24 projects.

>  Clemson University is partnering with Greenville Technical College to develop a program for automotive and aviation engineering and virtual school technology.
 
These programs are the key to growing the already existing skilled labor force in the Upstate and throughout South Carolina.  An improving and expanding skilled technical labor force will further motivate companies to establish new facilities in the Upstate. 

 
CURRENT CONDITIONS

Upstate counties consist of Anderson, Cherokee, Greenville, Laurens, Pickens and Spartanburg County.  Spartanburg County experienced the greatest improvements during the third quarter dropping to a vacancy rate of just 7.84% and absorbing over 200,000 square feet of industrial and flex space.  Anderson and Cherokee were the only counties to experience an increase in vacancy adding approximately 18,000 and 181,000 square feet of space, respectively, to the market’s available inventory.     
 
Construction continues on the 156,000 square foot Class A speculative industrial building at Caliber Ridge Industrial Park in Greer, SC being developed by Liberty Property Trust.  The building has already secured A.L. Industries, Inc., a manufacturer of filters for the automotive and heavy duty industry, as a tenant to occupy 52,000 square feet in the building.
 
INDUSTRIAL MARKET

The industrial market in the Upstate region of South Carolina consists of approximately 169.3 million square feet of industrial space in 2,422 buildings and is home to major manufacturers, BMW Manufacturing, Michelin North America and ZF.  The market ended the third quarter of 2013 with a total vacancy rate of 8.35%, down just one basis point from the previous quarter.  The market absorbed over 200,000 square feet of space, largely due to success in Spartanburg and Laurens County, which ended the quarter with vacancy rates of 12.98% and 7.77%, respectively.  The average asking rental rate for the market was up to $2.85 NNN from the previous quarter and a year ago when the average rates were $2.80 NNN and $2.83 NNN, respectively.
 
To download the complete report please visit: Colliers International | Q3-2013 Greenville Industrial Market Report