Second-quarter 2018 market reports

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Market analysis derived from second quarter 2018 CRE market reports provided by Avison Young, CBRE, Colliers, Cushman & Wakefield | Thalhimer, NAI Earle Furman, and Newmark Grubb Wilson Kibler.

Office

Summary: Market conditions remained relatively unchanged in the Greenville/Spartanburg market for the second quarter of 2018. Vacancy rates remained at 7.7 percent, reported NAI Earle Furman. Outside investment companies are still very interested in the market, with two large Greenville-area buildings having sold recently — the Ogletree Building on North Main sold for $11.4 million to a Raleigh, N.C., company, and the Jacobs Building on Butler Road sold to a Missouri-based group for $24.3 million.

The market is still a tenant’s market with free rent, moving allowances, furniture, fixture and other equipment allowances, and TI conversions all being considered in lease negotiations, says Colliers. With vacancies decreasing, however, rental rates are on the rise.

Outlook: With no significant blocks of new office space expected to be completed in the next quarter or two, market conditions are not expected to change significantly. Since all “anticipated givebacks” have been realized, the market may see additional growth moving forward, reports CBRE.

Industrial

Summary: Even with five new buildings delivered in the second quarter with more than 600,000 square feet, the industrial market in the Upstate remains strong, absorbing more than half of that space. A large announcement from Keurig for their Green Mountain Coffee brand in Spartanburg continues to fuel growth in the area, reports Cushman & Wakefield | Thalhimer, along with the Inland Port in Greer and expansions in the manufacturing segment.

Source: Cushman Wakefield | Thalhimer

Outlook: There’s more than 3.6 million square feet of Industrial property in the pipeline, but there’s also still plenty of demand. Economic investment remains strong as does investment activity. It will be worth watching to see how or if tariffs impact the market, although most CRE companies are predicting they will have little to no impact.

Retail

Summary: Overall vacancy rates saw a slight decrease to 6.3 percent. Positive net absorption and an increase in rental rates along with leasing and sales activity in the Upstate remain strong, reports Avison Young. Average triple net shop space rental rates increased in the second quarter 2018 to $13.63 per square foot from $13.17 per square foot, reports Colliers.

New out-of-market franchise concepts continue to land in the Upstate with international chain Burgerim, Georgia-based River Street Sweets, and Tennessee-based Buttermilk Sky Pie, all set to enter the market soon, says Avison Young.

Outlook: The closing of Toys R Us and Babies R Us stores will have an impact on the retail market with their vacant space needing to be backfilled. Colliers is predicting Greenville’s new Unity Park downtown will increase retail demand around the new park. Both Greenville and Spartanburg downtown area’s continue to see high demand and robust rental asking prices.

Source: Avison Young

Capital Investments in the Upstate

Investments

Investment Amount

BMW Manufacturing Corp.

$3.25 billion

Toray Industries

$1 billion

First Quality Tissue

$1.35 billion

Michelin, North America

$820 million

Duke Energy

$600 million

Teijin Ltd.

$600 million

American Titanium Works

$422 million

GE Power & Water

$400 million

Keurig Green Mountain

$350 million

ZF Transmissions Gray Court

$350 million

Electrolux

$200 million

Project Ray/83

$200 million

*There are investors with confidential capital investment totals not included on this list.

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