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Advanced Manufacturing, Logistics Activity Accelerate Upstate’s Industrial Growth

John Nelson — Mon, 30 Apr 2018 11:30:57 +0000

The Greenville-Spartanburg economy has a long legacy of being fueled by industrial activity. Today, the whole Upstate market continues to experience record levels of growth as it evolves into advanced manufacturing, automotive and distribution related activities. South Carolina is the largest exporter of goods on a per capita basis in the Southeast and has one of the highest densities of foreign direct investment per capita in the United States. The Upstate is the manufacturing center of South Carolina, with approximately 55 percent of the market’s 177 million square feet of industrial space classified as manufacturing. Due to the strong fundamentals of the market, manufacturing is expected to continue to grow. The metro offers manufacturers a pro-business environment, with skilled and affordable labor, a critical mass of industry and a solid transportation infrastructure with access to high population bases. Strategic Location The region is also becoming increasingly crucial to supply chains serving the East Coast and Southeast. The Upstate can reach over 95 million people within a day’s truck drive. With the continued proliferation of e-commerce, the Greenville-Spartanburg market provides an opportunity to mitigate transportation costs by allowing companies to leverage Inland Port Greer, which provides overnight service to and from…

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Greenville’s Positive Economic Momentum is Catching the Eye of Retailers

John Nelson — Mon, 29 May 2017 11:45:26 +0000

The city of Greenville and the surrounding submarkets are exploding with growth. The once-sleepy textile town in the Upstate of South Carolina has now become a robust, diversified economy that is garnering interest from retailers that may have overlooked the market in the past. The change in the city of Greenville has not gone unnoticed; several publications and top ten lists have recognized Greenville for its thriving downtown. From the addition of Falls Park in 2004, an approximately 32-acre oasis in the West End of the city, to multiple mixed-use developments under construction, Greenville’s resurgence has brought new residents, new retail and new life to the region. Growth in the Greenville market has been largely driven by the addition of thousands of new jobs, a low cost of living and highly attractive lifestyle options. Greenville serves as the North American headquarters for BMW, Michelin and Hubbell Lighting, all of which have contributed to significant job growth in the region. As Greenville’s downtown has continued to draw national recognition, retailers have taken notice. In recent years, Greenville has attracted a multitude of national retailers new to the market. Hughes Development’s Project ONE kicked things off when it brought national retailers like…

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Columbia’s Retail Market is Uniquely Equipped to Meet the Needs of Millennials

John Nelson — Mon, 29 Aug 2016 11:30:28 +0000

It is impossible to have a discussion about retail commercial real estate without considering the implications of shifting demographics. This is true both nationally and in the Columbia market. The unique demographic characteristics of the local market serve as an explanation for the current situation in retail real estate. The trends in retail real estate in Columbia echo those on that national level, although with the local market’s heavy concentration of Millennials (one of the highest in the Southeast), the opportunity for disproportionately high growth is significant. Those trends involve the sector being the last to emerge from the recession with low levels of retail development on a broad scale, but increasing activity and viability in urban and infill environments, especially for restaurants. Much of the retail activity in the market uniquely caters to that 20 to 34 age demographic. At this stage in their lives, the overwhelming majority of the younger demographic is focused on living in an active lifestyle, preferably in urban environments. This is making the prospect of infill retail, particularly as a component of mixed-use development, more feasible. This is resulting in increasing retail and multifamily development in Columbia’s downtown. For urban retail, there are three…

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Greenville’s Booming Office Market Drives Interest from New Investors

John Nelson — Wed, 08 Jun 2016 11:30:41 +0000

Greenville is undergoing significant growth and capturing the attention of national investors and tenants. Historically high rental rates, increased occupancy and strong construction activity for the first time in recent years collectively indicate a healthy market. Additionally, tight market conditions provide an ideal investment sales environment encouraging landlords to market their office assets for sale, something they couldn’t justify doing a few years ago. The market’s occupancy rate was up to 85.2 percent at year-end 2015 from 83.7 percent the previous year. As demand grows and space is absorbed, the market is shifting in favor of landlords, who are pushing up rental rates to levels never before seen in the market. Asking rental rates for Class A office space in the market averaged $22.41 per square foot at year-end 2015, increasing 9 percent in a one-year span. Class A space in the central business district (CBD) is even more costly with asking rental rates averaging $25 per square foot. With office users showing a strong desire to locate in the market and willingness to pay higher rental rates for quality space, developers are turning to new construction and adaptive reuse projects to meet the heightened demand for space. Several projects…

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South Carolina’s Midland Region is in the Middle of ‘Manufacturing Renaissance’

John Nelson — Mon, 27 Jul 2015 13:55:07 +0000

South Carolina continues to see a manufacturing renaissance, after back-to-back record years of manufacturing investment totaling $10 billion in 2013 and 2014. All signs suggest that 2015 will be just as promising. The Midlands region has benefitted from this investment and is poised to take off in 2015. As the market has heated up, the Midlands region of South Carolina has the most to offer in the way of product for new and expanding companies. Yes, in 2015 vacancy is a good thing! 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…

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Roughly 3 Million Square Feet of Industrial Space is in Greenville’s Pipeline in 2015

John Nelson — Mon, 27 Apr 2015 12:00:29 +0000

Manufacturing was instrumental in driving the United States economy out of the recession. With Greenville-Spartanburg having a high ratio of manufacturing to warehouse space, the region’s industrial market has been ahead of the national market in terms of growth. Greenville-Spartanburg is first and foremost an industrial market with approximately 160 million square feet of manufacturing, warehouse and flex space. This is larger than the industrial markets in Columbia and Charleston combined. For five consecutive years vacancy has declined and absorption has been consistently positive. Vacancy currently sits at a record 7.3 percent and has been there for several quarters, not moving down further mostly due to lack of product. Annual net absorption topped 4.3 million square feet in 2012 and 2013, and dropped down to 2.5 million in 2014. Space that does not exist cannot be absorbed. Developers are aggressively responding to this lack of product with more than 3 million square feet of space expected to be built in 2015. Over 1.3 million square feet of that space is considered speculative, meaning construction started before occupancy was achieved. Both numbers represent the highest amounts of construction since CBRE began tracking the Greenville-Spartanburg industrial market in 2001. Absorption in 2015…

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Charleston’s Office Market Enjoys Banner Year with Rising Rents, New Construction

John Nelson — Mon, 05 Jan 2015 11:30:10 +0000

The Charleston office sector is robust, with movement in virtually every aspect of the market. Tenants have flocked to the city, leaving only a small number of available spaces for those looking to move or expand, particularly into larger spaces. What Renters Want Low vacancy citywide — in the Central Business District (CBD), the vacancy rate is under 5 percent — is driving an uptick in rents, with current rents ranging from $17 to $28 per square foot, depending on the age and location of the space. Landlord concessions are also falling off as space becomes tighter. The shift toward more open workspaces continues as technology advances, meaning a decrease in the number of private offices and an increase in community/collaborative spaces. With smaller computers, storage in the cloud instead of filing cabinets and the use of off-site printers, most offices in the city are down to less than 200 square feet per employee. Since Charleston has one of the highest overhead rates in the Southeast, cutting down on square footage is a priority for most companies. Development Underway More than $1 billion of projects across all property types are currently under construction on the Charleston peninsula alone, and for…

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New Development, Inland Port Drive Growth

admin — Mon, 28 Apr 2014 00:00:00 +0000

The Upstate of South Carolina is home to 1.2 million people located on the Interstate 85 corridor between Atlanta and Charlotte. The population is clustered around the cities of Greenville, Spartanburg and Anderson. The epicenter of the industrial market is along the county line between Greenville and Spartanburg counties, where South Carolina Inland Port (SCIP) was recently completed. The region has a long legacy of manufacturing, but during the last 30 years, the type of manufacturing has shifted away from low-skill textile manufacturing to a more diverse economy built around the automobile, energy and chemical industries. The Upstate is first and foremost an industrial market with approximately 150 million square feet of manufacturing, warehouse and flex space. At the close of the fourth quarter of 2013, vacancy reached 7.6 percent — its lowest point in the last 10 years. While this market vacancy pales in comparison to the sub-3 percent vacancy rates found routinely on the West Coast, given the amount of older textile-era warehouse facilities in the market inflating vacancy, the current rate is extremely low for our market. Eventually this low vacancy will hinder growth rates as tenants interested in a particular type of space are unable to…

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Columbia Industrial Market Expects Improvement

admin — Mon, 05 Aug 2013 00:00:00 +0000

Columbia is is considered a tertiary market by definition, with more than 47 million square feet of industrial space. In the past few years, national and international companies have recognized Columbia as having a strategic position in the Southeast. While most markets struggled in the downturn, Columbia’s steady industrial announcements demonstrated stability. Today, the city’s industrial vacancy rate is hovering at 10 percent. The Columbia market has remained attractive due to its low cost of doing business, non-union affiliation and quality of life. The city’s employment base is diverse, ranging from traditional sectors such as agriculture and manufacturing to emerging sectors such as health services, insurance and financial markets. The region is home to the state government, Fort Jackson and the University of South Carolina. Rental rates for Class A industrial space have decreased significantly since 2008. Today, we have a 184,000-square-foot LEED-certified building with a quoted rate of $3.95 per square foot. At delivery, this building had a published rate of $4.75 per square foot. Another competing Class A property in the market is the former Lamson Sessions building, a 350,000-square-foot, cross-docked facility listed at $3.35 per square foot. The reduction in rates has been necessary to stay competitive…

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Industrial Industries Expand Business in Greenville as Economy Rebounds

admin — Mon, 08 Apr 2013 00:00:00 +0000

The largest challenge facing the Greenville/Spartanburg industrial market is the lack of quality industrial buildings. So, how did we go from the worst recession in recent memory to a shortage of available industrial space? With the recession and the 2012 election behind us, the industrial sector has stabilized and continues to improve. Much like the rest of the country, the effects of the Great Recession were felt in the Greenville/Spartanburg market, which experienced higher-than-normal vacancy rates, lack of leasing activity and depressed rental rates. Companies planning for expansion and growth during the recession — and that ultimately survived the tough years — have recovered to the point of near-normal business. In the past few years, these companies have been able to implement their growth plans, after being on hold for an extended period. Many businesses experienced a delay in business growth, ultimately resulting in pent-up demand. The companies that were waiting to expand took advantage of the symptoms of a slowly recovering market, including depressed rental rates and high vacancy levels, to expand or enter the market at historically rental rates. In conversations with prospective clients, often times I help provide clarification on the current status of the Greenville/Spartanburg industrial…

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During the last two quarters, vacancy rates have declined.

admin — Fri, 28 Sep 2012 00:00:00 +0000

During the last two quarters, vacancy rates for Class A and Class B office properties in Columbia have declined. So far in 2012, overall Class A vacancy rates have fallen from 12.2 percent to 11.4 percent, while Class B vacancy rates have fallen from 27.3 percent to 27.1 percent. However, as tenants have been taking advantage of the opportunity to upgrade their spaces, the overall vacancy rate has remained unchanged at 22.2 percent, as Class C vacancy rates have increased from 23.7 percent to 26 percent. The Cayce/West Columbia submarket saw the biggest statistical declines in vacancy during the last year. Class A vacancy declined from 27.6 percent to 17.3 percent. Class B vacancy rates declined from 25.7 percent to 13.8 percent. While the change demonstrates increased activity in the submarket, the submarket saw only 13,603 square feet of positive absorption for the year. Activity in the Central Business District has been muted. In 2012, vacancy rates have declined by 40 basis points. Tenants are upgrading to Class A spaces from Class B and C buildings. Vacancy rates for Class A buildings downtown declined 70 basis points to 11.8 percent. However, vacancies have increased in Class B spaces rising 40…

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Manufacturing leads growth with investments by major companies.

admin — Fri, 14 Sep 2012 00:00:00 +0000

The first half of 2012 has proven fairly stable for the Columbia industrial market. While the first quarter of 2012 experienced trickle over activity from the end of 2011, the second quarter tempered that with marked slowdown. Even though the vacancy rate remained relatively flat at 15.78 percent, average asking rates actually increased 5 cents to $3.53 per square foot. The Columbia industrial market has seen significant investment during the past 12 months, with manufacturing continuing to lead the pack with major investments from Amazon.com, Mars Petcare, Nephron Pharmaceuticals, Bridgestone, Michelin and Continental Tire. South Carolina — and the Central Midlands area, in particular — has experienced significant growth. Amazon.com delivered its 1.2 million-square-foot distribution center and Nephron is building its $313 million campus in Lexington County. Mars Petcare is constructing a 290,000-square-foot expansion in Richland County, in the Southeast corridor. South Carolina is fast becoming the North American capital for tire manufacturing, with most of those facilities located throughout the Midlands region. Bridgestone is expanding, adding 474,000 square feet to its current facility and the company is constructing a new 1.5 million-square-foot manufacturing facility in Aiken. Continental Tire continues construction on its $500 million plant in Sumter County and…

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Multifamily market shows improvement.

admin — Fri, 29 Jun 2012 00:00:00 +0000

As the economy picks up in Columbia, South Carolina, the area’s multifamily market shows improvement. Columbia’s unemployment rate has declined steadily over the last year to its current rate of 8 percent. The largest employers in Columbia — which is the largest MSA in the state of South Carolina — are the state government, the University of South Carolina, Fort Jackson, Palmetto Health Baptist, and Blue Cross and Blue Shield of South Carolina. Columbia also showed an increase in manufacturing jobs over the past year. The area also benefits from recent economic development announcements. In May 2011, Michelin North America announced a $200 million dollar investment in its Lexington facility with 270 new jobs. Nephron Pharmaceuticals plans to build a $313 million manufacturing and research campus in Cayce’s Saxe Gotha Industrial Park, creating 700 new jobs. The University of South Carolina plans to build a state-of-the-art $91 million Moore School of Business to be located downtown at Assembly and Green. The former business school location will be leased to the Department of Justice for 20 years, which will bring in an additional 250 jobs. Amazon.com built a distribution facility in Columbia, which currently employs 600 workers, will eventually create up…

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Several new devleopments in the pipeline.

admin — Fri, 01 Jun 2012 00:00:00 +0000

Trends in multifamily development and demand mirror both changing mentalities in a post-recession era and dynamic population shifts. There are an estimated 80 million echo boomers (Americans born between 1980 and 1995) that are beginning to move out of their family homes or college dorm rooms and into a very challenging job market. Most rent because they are either unable to buy or they consider owning a home low on the list of their financial goals at this stage in their lives. Even those older than the echo boomers have changed their ideology as it relates to homeownership after suffering through a collapsed housing market. The result of these shifts has kept the demand for multifamily housing high on both local and national levels. Current apartment developments are also responding to the demand for affordable luxuries. They now offer green efficiencies that will reduce utility bills and access to transit nodes that cut down on gas costs. Amenities such as fitness centers, coffee shops and pools with outdoor areas that allow residents to socialize on-site have become commonplace. In the Greenville market, the downtown apartment activity is bustling. Hughes Investments recently delivered the Riverwalk at Riverplace, a mixed-use development that…

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Retail activity picks up in Greenville.

admin — Fri, 04 May 2012 00:00:00 +0000

The Upstate area of South Carolina finished 2011 with quite a bit of retail activity and good news on the retail front has continued into 2012. Greenville, Spartanburg and Anderson saw positive retail absorption of 233,144 square feet in the fourth quarter of 2011, according to CoStar, and vacancy rates declined to 6.4 percent in the fourth quarter of 2011 from 6.6 percent the previous quarter. The housing market seems to have stabilized and is showing positive trends, which is good news for retailers. And the Upstate has had a number of new economic development announcements including BMW’s facility expansion and Amazon’s new 1 million-square-foot distribution center, which is under construction in Spartanburg. The Upstate Alliance reported that 2011 brought the creation of more than 5,000 new jobs and capital investment of more than $805 million in investment and expansions. The Upstate South Carolina region has already announced more than $1 billion in capital investment thus far in 2012. The newest announcement is in Union for Belk Inc.’s new distribution center, which brings $4.5 million in capital investment and more than 120 jobs to the area. The Upstate has had success backfilling some big box vacancies. buybuyBABY took over the…

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Improving fundamentals expected.

admin — Fri, 27 Apr 2012 00:00:00 +0000

The Greenville-Spartanburg office market includes more than 10 million square feet of leasable office space located along Interstate 85 between Charlotte, North Carolina, and Atlanta. The market is expected to enjoy increasing absorption levels with a modest drop in vacancy, which currently stands at just over 16 percent. The biggest news on the construction front is Hughes Development’s ONE building in the Greenville CBD. The property will deliver 370,000 square feet of Class A office space to the market in its two phases. Phase I is expected to be completed by the end of 2012. Phase II is expected to be completed by third quarter 2013. Anchor tenants for the property include CertusBank, Haynesworth Sinkler Boyd and Clemson University, which is relocating its Master’s of Business Administration program to the project. Banking is one sector that stands to be a high-growth industry in the local market through the end of 2013. In addition to rapidly growing CertusBank in the new ONE building, TD Bank recently announced its intention to permanently occupy the Interstate 85 campus the company acquired with the purchase of a regional bank, The South Financial Group. This removed 150,000 square feet of vacant Class A space from…

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Back on track in Upstate South Carolina.

admin — Fri, 20 Apr 2012 00:00:00 +0000

The industrial warehouse locomotive is back on track in Upstate South Carolina. We experienced tremendous positive absorption in warehouse space in 2011 — around 1.7 million square feet — and vacancy is down to pre-recession levels at 9 percent. Vacancy has been dropping steadily from 10.8 percent since the fourth quarter of 2009, and experienced a dramatic drop in 2011. This recovery is a result of the recent surge of announcements of new and expanding operations by manufacturing companies in the Greenville/Spartanburg area. Corporations such as Michelin, Bosch Rexroth Corp., Scio Diamond Technology, Honeywell International, PRETTL Electronics, Griffin Thermal Products and BMW will invest more than $277 million combined in our area and create 3,714 new jobs. There are 4,014 industrial properties currently in the Greenville/Spartanburg market. Sixteen leases and four sales for industrial warehouses were reported in the first few weeks of 2012. Rental rates for warehouses range from 32 cents per square foot to $13.12 per square foot, a wide range that depends on size, location and condition. Overall, the average rental rate is $2.92 per square foot. With vacancy dropping continually and no new developments underway or on the horizon, inventory is being depleted, which is creating…

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Industrial market desirable for new business and growth.

admin — Fri, 27 Mar 2009 00:00:00 +0000

Industrial properties in the Upstate region of South Carolina continued to perform at a steady if unspectacular rate through 2008, and this trend is expected to continue through 2009. The market will continue to see good activity on the leasing side of the business. This activity, while driven by the confusion of the credit market, has still reflected the desirability of the area as a place for new businesses and the continued growth of key industries. The current expansion of BMW’s facilities has heightened the likelihood of both secondary and tertiary suppliers opening or expanding locally in anticipation of the plant’s growth. This is further intensified as the International Center for Automotive Research complex continues to grow. The recent opening of the Carroll A. Campbell Jr. Graduate Engineering Center will further improve local research and development capabilities. This strategic investment was cited as one of the reasons the Upstate area was chosen for a multi million-dollar titanium manufacturing facility. Equally impressive has been the announcement that Fitesa, a Brazilian manufacturing company, also plans to establish a presence in the region. Another source of growth has been from foreign-owned corporations that view this as a good time to expand in the…

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Columbia Retail

admin — Tue, 29 Apr 2008 00:00:00 +0000

Submitted by Ron Anderson, VP of Research and Technology, NAI Avant LLC in Columbia, S.C. Posted 02-22-08. What area is your expertise? Columbia, S.C. What trends do you see presently in retail development in your area? Currently, there are several active types of development: Wal-Mart and Target anchored community centers ranging from 200,000 to 300,000 square feet Unanchored retail strips from 6,000 to 20,000 square feet Auto dealerships relocated from in town to suburban locations Additional home improvement locations Bank locations Fast food locations What type of retail product is doing well in your area? All retail seems to be quite strong at this point Who are the active retail developers in your area? Active retail developers are Fletcher Bright, WRS, Edens & Avant, Kahn Development, and Owen Development. Please name one or two significant retail developments in your area. What impact will these projects have on the market? • Village at Sandhill is a 1 million-square-foot lifestyle center in Northeast Richland County. It is being developed by Kahn Development of Columbia. This project has introduced the lifestyle center to the region and created a retail anchor in Columbia’s fastest growing suburb. • The Shoppes at White Knoll is a…

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Columbia Retail

admin — Fri, 22 Feb 2008 00:00:00 +0000

What area is your expertise? • Columbia, S.C. What trends do you see presently in retail development in your area? • Currently, there are several active types of development: Wal-Mart and Target anchored community centers ranging from 200,000 to 300,000 square feet Unanchored retail strips from 6,000 to 20,000 square feet Auto dealerships relocated from in town to suburban locations Additional home improvement locations Bank locations Fast food locations What type of retail product is doing well in your area? • All retail seems to be quite strong at this point Who are the active retail developers in your area? • Active retail developers are Fletcher Bright, WRS, Edens & Avant, Kahn Development, and Owen Development. Please name one or two significant retail developments in your area. What impact will these projects have on the market? • Village at Sandhill is a 1 million-square-foot lifestyle center in Northeast Richland County. It is being developed by Kahn Development of Columbia. This project has introduced the lifestyle center to the region and created a retail anchor in Columbia’s fastest growing suburb. • The Shoppes at White Knoll is a 250,000 square foot development that was recently completed in the Redbank submarket. WRS…

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