Charles Salley, Colliers International
As the upstate and low country markets have become alarmingly tight on viable manufacturing space, the Midlands region offers up an array of high-quality industrial product that is move-in ready.
Data for the first quarter of 2015 shows significant improvements in the Midlands market with investments, job creation and construction activity. Major companies, including Brazil-based Inbra Industrias Quimicas, Red Bone Alley Foods, Avantrech and Wire Mesh Cos., have all made multi-million dollar investments in new or expanded facilities, and there is also increased build-to-suit and speculative construction across the region.
There has also been a growth in leasing, as manufacturers pursue existing facilities that can meet the demands for advanced manufacturing but with significant cost savings over new construction. This trend is growing because manufacturers can then invest the saved capital into more equipment and technology, thereby improving the efficiency of their facility and further lowering their costs.
This local market trend has attracted the attention of investors. Reger Holdings, a Buffalo, N.Y.-based development and investment company, has taken great interest in South Carolina and has amassed a significant portfolio of Class B industrial properties across the state. Reger Holdings now owns 27 industrial buildings totaling 4 million square feet, primarily located along the I-77 and I-20 corridors in the Midlands. Reger Holdings’ confidence in the market is clear, as it added three new South Carolina properties, totaling $10.4 million, to its portfolio in the first quarter of 2015.
All of this investment in Midlands manufacturing has led to 4,100 manufacturing jobs added to the region since March 2010, with 2,100 jobs added in 2014 alone.
Meanwhile, demand for more space continues to grow. Increased exports in Charleston and Greenville due to the Port of Charleston and the South Carolina Inland Port (SCIP) are fueling growth for the state as a whole. The Midlands’ central location between the Port of Charleston and SCIP offers a competitive advantage for the region, which offers a growing talented labor force, efficient logistics and tax incentives.
For instance, the central location has fueled the growth of the I-20 corridor between Aiken and Sumter with three major tire manufacturers — Bridgestone, Michelin and Continental — each announcing new or expanded manufacturing plants in 2014.
But the future of manufacturing growth in the Midlands is exemplified in Northeast Columbia. A unique 470,000-square-foot Class A facility on 100 acres, currently home to BOSE, will open for sale and leasing in September. As a result, the Midlands will offer a one-of-a kind facility, as there are currently no comparable buildings available for sale or lease in the entire state. The building, expandable to 1 million square feet, has the potential to attract a major employer to the market, which depending on the type of user, may motivate the entry of suppliers and new manufacturers to the area.
— By Charles Salley, SIOR, Director of Industrial Brokerage Group, Colliers International. This article originally appeared in the May 2015 issue of Southeast Real Estate Business.