NAI Earle Furman Releases Year-End Market Reports
February 2, 2011
GREENVILLE, SC – February 2, 2011 – NAI Earle Furman has released their year-end 2010 market reports for the Upstate of South Carolina.
Industrial Sector
Industrial Broker, Grice Hunt commented, “As 2011 begins the Industrial market in the Upstate of South Carolina has seen two consecutive quarters of positive absorption showing signs of a recovering industrial market. Even though vacancy has decreased tenants are still able to seek aggressive lease terms among competing buildings. As recession fears wane pent-up demand helps push vacancy numbers down as prospect confidence continues to improve. New construction activity continues to remain sparse as vacancy still allows both tenants and purchasers a wide variety of available options. One new project broke ground in fourth quarter, a 50,000 SF facility in the Pickens area.”
“Investment activity has slowly begun to increase as tenants are becoming more confident and showing positive signs of growth or longer lease commitments. However acquisition criteria have drastically changed over the past 24 months and while financing is beginning to loosen it can still prove to be a significant hurdle in closing deals. Some investment groups are still taking advantage of opportunities created by the financing crisis by chasing bank owned properties and distressed assets as a means to either expand or break into the Upstate market. 2011 appears to be the first opportunity the market has had to recover. Expectations are that market conditions will begin to stabilize and regain some normalcy over the course of the year.”
Retail Sector
Retail Broker, Jake Van Gieson commented, “As 2010 comes to a close, the retail sector has seen some positive changes. We are seeing rental rates slowly creep up and vacancy is staying pretty flat. Landlords are still very aggressive to make deals on the leasing side. Although rental rates are slightly increasing, tenants are negotiating longer free rent periods. There is still very little ground up construction in the Upstate, although we are seeing a few rehabs and renovations. Contrary to 2009, we are seeing an increase in the national tenants expanding to our market. There has been a big push from some major gas chains, as well as fast food operators. On the investment side cap rates are still much higher than a few years ago. Most investors are all cash buyers looking for bank foreclosures or single tenant deals with long term leases. Thus the amount of retail sales are much lower than years prior. With the increase in rental rates and the number of tenants expanding, 2011 looks to be a promising year for the retail sector.
Office Sector
Office Broker David Feild commented, “Although the Upstate office market continues to struggle with vacancy and subdued tenant demand, over the past three consecutive quarters we have enjoyed a trend of lower vacancy rates and positive net absorption. Despite the slight decrease in fourth quarter rental rates, we are hopeful that our lease market has found stabilization and that with the new year will come a renewed focus from tenants on making real estate transactions that were put off in 2010. Although improving, financing still proves to be a challenge in sales transactions. Owner occupied deals are being completed with credit buyers, but speculative deals still don’t exist if financing is necessary. Sales of developed pad sites continue to struggle, but we see this market improving sooner than raw land.”
“Within the Greenville CBD submarket a notable sale transaction was 105 N. Spring Street. It is an approximately 30,000 SF building that will become home to Human Technologies, Inc. once the US Attorneys office completes its transition out of the building and into their new space. Elmore & Wall, P.A. has made a move to lease space at One Liberty Square, also in Greenville’s CBD. Although few notable sale transactions occurred in the suburbs, there were more lease transactions than the prior quarter. Continued lower vacancy rates and positive net absorption coupled with few new construction projects in fourth quarter give us optimism as 2011 begins,” Feild continued.
The complete market reports can be found by visiting www.naiearlefurman.com
Based in Upstate South Carolina, NAI Earle Furman, LLC is a leading full-service commercial real estate firm specializing in the office, industrial, investment and retail sectors. They offer a wide range of services including sales, leasing, development, site selection, consulting and property management. A partnership with NAI Global allows NAI Earle Furman, LLC to access a network of worldwide real estate connections and offer international commercial real estate services to Upstate clients, while retaining local personality and knowledge.
