Office asking rates reach historic high while industrial vacancy rate hits historic low in Greenville-Spartanburg
October 26, 2017
CBRE Research has released the Q3 2017 data on the office and industrial commercial real estate markets in Greenville-Spartanburg.
For the third consecutive quarter, the Greenville-Spartanburg office market has experienced modest levels of market activity. The current vacancy rate remains 12.5%, which is unchanged from the beginning of 2017. A lack of new office product combined with market conditions have driven Class A asking rates to reach a record high of $24.52 per square foot. Rates are expected to rise further due to strong absorption and a lack of new product in the pipeline.
The engineering sector is bringing long-term uncertainty through the reduction of space needs of Fluor Corp. Additionally, the merger and acquisition of Jacobs Engineering and CH2M could lead to a consolidation among firms, which would result in an increased availability in the market.
Construction at Camperdown, the mixed-use project on the former Greenville News site, has begun. The project will feature 125,000 square feet of office space with a delivery date of Q1 2019 at the earliest.
The industrial market has reached a new record low vacancy rate of 6.7% after eight quarters of positive absorption and slowing pipeline of speculative development. With a limited amount of speculative development remaining, there is nearly 900,000 square feet of additional speculative development product in the pipeline including Apple Valley Industrial Park and Augusta Grove.
In addition to speculative development, there is 3.5 million square feet of automotive manufacturing and pharmaceutical construction underway in the Spartanburg West submarket, which is the heart of the Greenville-Spartanburg industrial market.
Investment interest is rising due to the increased notoriety of the local industrial market and location on the I-85 corridor. Notably, the most recent investment transaction is the purchase of the large Rite Aid distribution center in the Spartanburg East submarket.
The following are highlights of each report.
Office
• Rate of absorption is downshifting
• Merger and acquisition activity in engineering sector adding uncertainty to the market
• Construction starts on new Class A office building in the CBD
• Active multifamily sector is keeping construction costs high
• Asking rates at historic high, vacancy at historic low
For more information, click here for Q3 2017 Greenville-Spartanburg Office MarketView.
Industrial
• Vacancy hits record low of 6.7%
• Large amounts of speculative product experiencing success, inspiring additional development
• Manufacturing and distribution fueling growth
• Attractiveness of the market to investors is rising
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 2016 revenue). The company has more than 75,000 employees (excluding affiliates), and serves real estate investors and occupiers through approximately 450 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.
