Absorption levels end strong in Greenville-Spartanburg industrial & office markets in 2016
February 15, 2017
CBRE Research has released the Q4 2016 data on the industrial and office commercial real estate markets in Greenville-Spartanburg. With total market absorption of over 6.4 million square feet in the industrial sector and Q4 absorption topping 200,000 square feet in the office sector, 2016 saw historic market metrics in Greenville-Spartanburg.
The delivery of a Class A office building in the CBD helped absorption to surge significantly for the second time this year and prompt another jump in asking rents. Vacancy, which is now at 12.0% is approaching records lows and new product is unlikely to be completed until late 2018. Greenville-Spartanburg should expect a new record low vacancy in 2017 and as market conditions tighten, a case for additional office space can be seen.
In the last two quarters, over 2.1 million sq. ft. of competitive office assets traded hands and asking rates for Class A CBD office product has increased more than 35% in the last 5 years, both of which build creditability for the region for continued out-of-market interest and activity.
In Q4 several tenants including Morley Companies, BB&T and Raytheon absorbed large amounts of space of, which was over 50,000 sq. ft. of Class A office product, demonstrating tenants preference for the best space to attract and retail talent.
The industrial sector’s strong market absorption is being driven by the diversification our once manufacturing-driven industry to one that prominently features distribution. This evolution has justified record setting speculative construction in the region. Vacancy, which currently stands at 7.6%, is likely to approach or even drop below the record low of 7.0% experience two quarters ago.
The following are highlights of each report.
Office
• New Class A office building pushed absorption to top 200,000 sq. ft. for second time in 2016
• Vacancy rate likely to hit record low in 2017
• More than 20% of office inventory has traded hands in the last two quarters
• Investors attracted to the Greenville-Spartanburg rent growth and growing economy
Industrial
• Record-setting level of absorption occurred in 2016, speculative development keeps vacancy rate above record low
• Market diversifying to focus on manufacturing and distribution
• Speculative development experiencing routine success
For more information, visit http://www.cbre.us/o/greenville/Pages/market-reports-test.aspx
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2015 revenue). The Company has more than 70,000 employees (excluding affiliates), and serves real estate investors and occupiers through more than 400 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
