Speculative Developments are Gaining Momentum in the Upstate
October 21, 2014
QUICK UPDATES
> Overall vacancy rate held steady over the quarter
> Overall asking rental rates increased slightly
> Demand for quality industrial space continues
> Speculative development projects are increasing
> Big blocks of contiguous Class A industrial space difficult to find
> Investments and expansions continue
To download the complete report click the link: Colliers International | South Carolina: Q3-2014 Greenville Industrial Market Report
MARKET OVERVIEW
Companies continued to announce plans to invest and expand throughout the Greenville/Spartanburg industrial market, which ended the third quarter of 2014 with an overall vacancy rate of 8.1%, holding steady over the previous quarter. The Greenville/Spartanburg market is comprised of Anderson, Cherokee, Greenville, Laurens, Pickens and Spartanburg Counties. Anderson, Greenville and Spartanburg Counties had total vacancy rates of 4.6%, 7.5% and 8.7%, respectively, for the combined industrial and flex market. Overall asking rental rates were up slightly to $3.06 from $3.02 at mid-year 2014.
Leasing and sales velocity was limited as quality industrial space remains in short supply throughout the market. The private and public sectors are answering the demand for new industrial space and developing speculative industrial buildings, most of which are pre-leasing successfully. Speculative developments will generate future growth and benefit the overall economy as companies invest in the market and generate jobs.
INDUSTRIAL MARKET
The overall vacancy rate for industrial space in the Greenville/Spartanburg market was 8.0%, ending the third quarter with limited activity and a steady vacancy rate from mid-year 2014. The Anderson, Greenville and Spartanburg industrial vacancy rates were 4.5%, 7.3% and 8.5%, respectively. Asking rental rates averaged to $2.90 NNN for the market, slightly higher than the mid-year 2014 average of $2.85 NNN. Greenville County has the highest average asking rental rate in the market at $3.13 NNN. Lease transactions were limited throughout the third quarter as desirable Class A industrial space remains difficult to find in the market.
FLEX MARKET
The Greenville/Spartanburg flex market ended the third quarter of 2014 with a vacancy rate of 10.5%, slightly lower than the mid-year vacancy rate of 10.7%. The average asking rental rate increased to $6.53 NNN from $6.42 NNN at mid-year 2014. Greenville has the greatest amount of flex space in the market and had a vacancy rate of 10.2%, down from 10.6% the previous quarter, with asking rental rates averaging $6.99 NNN, the highest in the market.
INVESTMENTS AND EXPANSIONS
The Upstate continues to attract new manufacturers and support the success of existing ones through county incentives, a skilled workforce backed by growing training programs and economic drivers, such as the South Carolina Inland Port, BMW and efficient logistics.
> Electrolux recently announced plans to invest an additional $30 million over the next two years in its Anderson County facility. Since 2011, the company has invested $30 million, of the planned $48 million, in the facility.
> FlashCo Manufacturing Inc. plans to open a plant at 514 Matrix Parkway in The Matrix business park. The 10,000 square foot plant will be the company’s first to serve the East Coast and Southeast.
> Ruhlamat America Inc. plans to open its U.S. operations and create 35 new jobs in Greenville County over the next several years. The company will initially locate in 10,000 square feet at 138 Johns Road in Greer, with plans to expand into a larger facility within five years.
> ACI Plastics acquired an 88,000 square foot facility with plans to occupy the building. The company’s $4.1 million investment is projected to create 25 jobs. The company will be relocating from Anderson where they currently occupy 55,000 square feet.
> Glen Raven Inc. plans to invest $13.5 million to expand its Sunbrella brand manufacturing center in Anderson County. The expansion is expected to create 10 new jobs. The company currently employs more than 600 employees in the 1 million square foot facility.
> O’Donnell Industries, Greenville-based pet product manufacturer, plans to invest $1.8 million and create 39 jobs. The manufacturer is moving into 43,000 square feet on Bessie Road, doubling its space.
IN THE MONTHS AHEAD
The vacancy rate is anticipated to decline throughout the remainder of 2014 and into 2015, but at a slow rate as available space remains limited in the market. Speculative construction is likely to gain momentum following successful pre-leasing other speculative industrial buildings. The Greenville/Spartanburg market will continue to support the success of existing companies and attract new companies to invest in the region. Suppliers for existing companies will be attracted to the area through efficient logistics and lower transportation costs.
AROUND THE STATE
Quality industrial space is becoming increasingly scarce throughout South Carolina motivating speculative construction to begin throughout the state.
CHARLESTON, SOUTH CAROLINA
> North Pointe Business Campus has two pad-ready sites in Berkeley County. The sites, owned by MWV, can accommodate users from 285,000 square to 350,000 square feet.
> Pattillo Industrial Real Estate is planning a 165,000 square foot industrial building at Palmetto Commerce Park in Charleston County. The building will be expandable to 400,000 square feet.
COLUMBIA, SOUTH CAROLINA
Speculative construction has been absent from the market since 2008, but several projects are currently in the works.
> The first of such projects is a 38,500 square foot industrial building at 1510 Key Road which pre-leased to Trane USA just weeks after being announced.
> Two speculative buildings, 60,000 and 70,000 square feet, are under construction in the Shop Grove Industrial Park with 35,000 square feet pre-leased to T&C Metals.
> Lexington County announced plans for a 120,000 square foot speculative building at Saxe Gotha Industrial Park, home to Amazon’s fulfillment center and the recently opened Nephron Pharmaceuticals. Construction on the $5.9 million building is slated to begin in the fall of 2014.
To download the complete report click the link: Colliers International | South Carolina: Q3-2014 Greenville Industrial Market Report
