The amount of office space available for sublease, usually a leading indicator of office vacancy rates, increased dramatically in the first two quarters of 2008. While the Columbia market usually has 15,000 square feet available for sublease at any given time, there were 25,967 square feet available at the end of the fourth quarter of 2007. That number skyrocketed to 64,025 square feet available for sublease at the end of the second quarter of 2008. The increase was the largest percentage increase of all the markets tracked by Grubb & Ellis.
Struggling financial institutions, such as Fannie Mae and IndyMac Bank, who have left the Columbia market, are the main contributors to the increase and most of the available sublease space is located downtown.
Despite the increase in available sublease space, overall vacancy rates declined to 15.3 percent from 16.6 percent as the market absorbed 111,925 square feet overall. A majority of the positive absorption was Class A space as tenants are looking to upgrade their existing facilities. The tightening in lending criteria has driven more users to lease space rather than purchase it.
(1) Inventory includes multi-tenant and single tenant buildings with at least 10,000 sq. ft.
(2) Vacant space includes both vacant direct and vacant sublease space.
(3) Space under construction includes speculative and build-to-suit for lease projects.
(4) Asking rates are per square foot per year full service. Rates for each building are weighted by the size of the building.
* Grubb & Ellis statistics are audited annually and may result in revisions to previously reported quarterly and final year-end figures.
Benjamin D. Johnson
Research/Client Services Manager
E-mail: [email protected]
Grubb & Ellis | Wilson Kibler
1111 Laurel Street
Columbia, SC 29201
Independently Owned and Operated