Opportunities rise for large office occupiers and industrial market receives largest amount of square feet delivered since BMW arrived
November 1, 2016
CBRE Research has released the Q3 2016 data on the industrial and office commercial real estate markets in the Greenville-Spartanburg market.
Market absorption was positive for the seventh consecutive quarter in the office sector, creating opportunity for large occupiers to capitalize on underutilized space. Most recently, the engineering firm Fluor Corp. made 52,000 sq. ft. available to the market for lease. Office asking rates continued to climb higher as the Class A CBD market rose for the thirteenth consecutive quarter to $24.80 per sq. ft. full service. This is a 27% increase from the last quarter of 2012.
Since 2013, Greenville-Spartanburg market has seen an average net absorption per quarter of 85,000 sq. ft., which is an annual growth rate of over 3%. This rapid growth is going to be challenged by a retraction of the for-profit education sector. With the ending of federal financial aid for their new students, Greenville-Spartanburg is expected to see at least 75,000 sq. ft. of the 220,000 sq. ft. occupied by the industry vacated by the end of 2017.
The Greenville-Spartanburg industrial market is evolving from a historically manufacturing center to include distribution as well. Major distribution facilities pushed absorption to record highs with over 3.4 million sq.ft. delivered in Q3 2016, the largest amount in a single quarter since the completion of the original BMW facility twenty years ago. Most notable were two large facilities for Techtronic Industries and Dollar Tree.
In addition, two new speculative warehouses were delivered. Johnson Development completed their 360,000 sq. ft. warehouse in the Spartanburg East submarket and Scannell Properties completed their 155,000 sq. ft. warehouse in the Spartanburg West submarket. Brose, a German automotive supplier, secured first half of the Scannell facility.
The following are highlights of each report:
Office
• Vacancy and availability rose due to new spaces being put on the market as large users look to take advantage of rising asking rents to address surplus space needs
• Asking rates continue their climb, having risen for thirteen consecutive quarters for Class A CBD space to $24.80 per sq. ft. full service
• Diminishing for-profit education sector is opening availability
• Despite low vacancy and high asking rates, little spec development in sight
Industrial
• Completion of two major distribution centers helped achieve the highest quarterly absorption in over 20 years.
• Delivery of multiple speculative developments pushed vacancy and availability higher
• Roughly half of 2.8 million sq. ft. of speculative space built during the current real estate cycle has been absorbed
• With three of the eight major distribution centers built in the last four quarters, market evolution from manufacturing towards distribution is occurring
For more information, click visit cbre.com/greenville for links to full reports.
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.
