Office
Summary:
The Greenville-Spartanburg office market has continued to see near record increases with a decrease in vacancy rates, reports Avison Young. Only a few major transactions took place in the second quarter, including the purchase of 26,000 square feet in the EP building on Broad Street by United Community Bank and the Children’s Medical Center on Verdae Boulevard announcement. DP3 signed a lease of more than 10,000 square feet of space at the Wells Fargo Center, and Duke Brands leased more than 12,000 square feet of space at Falls Park Place. BB&T announced it will be vacating its space in downtown Greenville and moving to the suburbs. CBRE says the BB&T space is outdated and unlikely to re-enter the market as office space.
The second quarter ended with an overall vacancy rate of 7.7 percent, down from 9 percent in the first quarter of 2017, reports CBC Caine. Overall rental rates were at an average of $16.36/SF. Construction costs are expected to remain high through 2018 or until the multifamily pipeline slows down, according to CBRE.
Outlook:
There is more than 400,000 square feet of office space projected to be delivered in Greenville’s CBD by 2019, which may make for a shift to a more tenant-favored market, reports Avison Young. CBRE agrees and foresees a slowing in the Greenville-Spartanburg office market after riding a high of 10 record-setting quarters.
Industrial
Summary:
In the industrial sector, absorption is still at record levels, but speculative construction has slowed a bit. Cushman & Wakefield | Thalhimer reports the market may be heading for a slowdown, but don’t expect to see that until mid-2018 or later. The $600 million BMW announcement earlier this year and the deepening of the Charleston Port will have a trickle-down effect for the Upstate industrial market, says Avison Young.
Outlook:
With demand still high, expect to see a new influx of speculative construction. Several investment sales are set to close in the second half of the year, says Cushman & Wakefield | Thalhimer.
Retail
Summary:
Retail is going through a transformation period with the increased focus in online shopping. Cushman & Wakefield | Thalhimer reports that retailers are busy adjusting their brands and focusing on providing interactive experiences with merchandise to try to keep customers in stores longer. Suburban retail is on the rise with the influx of new grocery store options, including new-to-the-market Sprouts.
Outlook:
With rising retail rates on Main Street, retailers will continue to look at urban renewal projects in formerly blighted neighborhoods, reports Cushman & Wakefield | Thalhimer. Expect to see new restaurants take over the spaces of recently closed ones, as the restaurant competition in downtown Greenville is at an all-time high, says Avison Young.
Special thanks to CBRE, Avison Young, Cushman & Wakefield | Thalhimer, and Coldwell Banker Commercial Caine for supplying second quarter 2017 CRE market reports for derived analysis.
