BMW, Caliber Ridge, Caterpillar developments drive market
As the inventory of quality industrial space continues to dwindle in the Upstate, the demand for new industrial construction is on the rise, says a new report from Colliers International.
At the end of the second quarter, demand for space from businesses looking to locate in the region was present, but new construction was still absent from the market, resulting in supply falling short of demand, the report said.
The industrial market in the Upstate consists of roughly 169.6 million square feet of space in 2,421 buildings. The market continued to excel in the second quarter of 2013, ending the quarter with a vacancy rate of just 8.4 percent, the report said.
The combined Upstate markets ended the second quarter with a fifth consecutive quarter of positive absorption, absorbing over 1.4 million square feet of space and achieving the low vacancy rate of 9.0 percent, down 90 basis points from the first quarter vacancy rate. Anderson, Cherokee, Greenville, Laurens, Pickens and Spartanburg counties all experienced positive absorption during the second quarter of 2013 with Anderson improving the most during the quarter, dropping 3.3 percentage points to a vacancy rate of 4.6 percent, Colliers said.
Many developers have been reluctant to invest in speculative construction and banks are hesitant to lend, but that too is changing with the announcement of the first speculative building in Greer since 2008 being built at Caliber Ridge Industrial Park by Liberty Property Trust, the report said.
Successful leasing of the newly developed building is promising to the market as it will likely spur further interest in the construction of Class A speculative buildings, which will attract new manufacturers to the area yielding capital investments and promoting economic growth, Colliers said.
In an effort to lower costs and increase efficiency, manufacturers are looking to locate closer to their customers and suppliers, a trend that is being called “localization,” Colliers said. The Upstate is experiencing this emerging trend as new manufacturers and suppliers are choosing to locate in the region.
The recent decision announced by Caterpillar Inc. to relocate its plant from Japan to Athens, Ga., has motivated two of its suppliers, Moline and McLaughlin Body Co., to locate in Anderson County, close to Caterpillar Inc.’s new plant, the report said. Cabures, a Spain-based manufacturer of carbon and composite structures, is opening its second Upstate facility in Greenville County in the Beechtree Business Park near its original facility at the SC Technology and Aviation Center (SCTAC). Cabures distributes materials to automotive and aerospace companies and thus enjoys success in the thriving automobile and aerospace industries present in the Upstate. The company plans to invest $4 million and hire up to an additional 100 employees over the next three years.
The Inland Port continues to play a significant role in the industrial market, even though the opening has been delayed until October 2013 due to construction delays from the area’s heavy rainfall, Colliers said. The first distribution facility located there is also under construction, developed by CenterPoint Properties for BMW Manufacturing Co.
The approximately 414,000-square-foot distribution facility, scheduled to open December 2013, is located on 45 acres owned by Greenville-Spartanburg International Airport. The $13.4 million facility will have a direct connection to the Inland Port and will be used to transport vehicles to the Port of Charleston for export.
The Upstate region is also continuously motivating companies to locate and expand in the area by providing a skilled labor force, growing economy and county tax incentives, the report says.
