Continued Improvement for Columbia’s Industrial Market
February 8, 2013
COLUMBIA, SC
February 8, 2013
Colliers International YE 2012 Columbia Industrial Market Report
MARKET OVERVIEW
Columbia’s Industrial Market ended 2012 with a second consecutive quarter of positive absorption and decreased vacancy rate. The market absorbed 46,848 square feet and reported a vacancy rate of 8.78% at year-end 2012, 12 basis points lower than the third quarter vacancy rate.
CURRENT CONDITIONS
Interest in the second half of 2012 remained focused on the Southeast and
Northeast Columbia submarkets. The Northeast Columbia submarket, consisting of the greatest amount of big box spaces ranging between 100,000 to 350,000 square feet in size, maintained the highest vacancy rate in the Columbia market throughout 2012. The fourth quarter however brought positive improvement to the northeast with a 4.41% decrease in vacancy rate, the greatest decrease experienced by any submarket this quarter. During this period, Jayco Inc signed a lease at 850 Bookman Road absorbing 60,129 square feet. In addition, Carrier-Bryant Carolinas renewed their 70,000 square foot lease at 230 Business Park Boulevard.
Southeast Columbia, typically home to smaller spaces ranging from 10,000 to 30,000 square feet experienced a 3.51% decrease in sub market vacancy rate from the previous quarter. Cherry Contracting signed a lease at 9790 Garners Ferry Road in the southeast market absorbing an additional 31,672 square feet.
In the Cayce/West Columbia submarket construction continues at Nephron Pharmaceutical manufacturing plant and research center at Saxe Gotha Industrial Park in Lexington County. Completion is anticipated for April 2013 with initial hiring to fill 300 positions beginning in March. The company plans to further expand and eventually employ 700 employees.
Also, in Richland County, JTEKT Corporation, an automotive systems and industrial components supplier, announced a $130 million additional investment to their existing facility which specializes in making bearings. The investment is anticipated to create 175 new jobs and involves a 267,000 square foot expansion of the facility to include an additional 32,700 square feet to be constructed as office space.
Construction and expansion projects in the market are beneficial to manufacturing job growth. Upon the completion of Nephron and JTEKT, approximately 475 new jobs will be created. As of December 2012, there were approximately 29,700 manufacturing jobs in the Columbia MSA, an increase of 400 jobs from September 2012 and a 2.8% increase from EOY 2011.
IN THE MONTHS AHEAD
Interest in both leasing and purchasing properties has increased in the fourth quarter of 2012 and should set up the first half of 2013 to be a fairly productive year with positive absorption, reduced vacancy, and stabilizing rents and purchase prices. Investment sales of industrial properties will lead both user sales and leases. Companies confident in the future business cycle activity are more apt to consider purchasing property taking advantage of low prices of existing buildings and lower interest rates which equate to a lower occupancy cost when compared to leasing. Landlords will be lowering incentives and increasing rental rates, especially for shorter one to three year term deals saving incentive dollars to go after credit tenants willing to sign long term leases. In 2013 landlords will be trying to re-position properties to create value by pushing for longer lease terms with credit worthy tenants.
Click the link to download the complete report YE 2012 Columbia Industrial Market Report.
