Columbia’s commercial real estate market is booming in many ways with demand and prices up, vacancies down and interest at, perhaps, an all-time high, industry experts said Tuesday.
That trend is likely to continue into 2016 and beyond, forecasters speaking at the Columbia Commercial Real Estate Market Forecast said Tuesday.
Industrial: Manufacturing is driving the industrial market in South Carolina — and could drive Columbia, said Chuck Salley, Collier’s International industrial brokerage group vice president.
“Clearly, we are experiencing a manufacturing renaissance since 2009,” which has brought millions in investment and thousands of jobs to the state, Salley said.
BMW last year announced a $1 billion expansion in the Upstate, Salley noted, with plans to produce 450,000 vehicles by the end of 2016. Volvo is building a $500 million plant in the Lowcountry. Mercedes Benz is building a $500 million plant in the Charleston area. And aircraft manufacturer Boeing is steadily increasing its manufacturing and new business lines at its $7 billion plant in North Charleston, Salley noted.
“All of those are affecting folks all over the state,” said Salley, a 35-year veteran of the Columbia industrial real estate market.
The Columbia area should benefit in 2016 from having the largest number of existing buildings available to accommodate manufacturers in the state, which Salley said is the second most important factor in landing new business to an area.
Retail: J.P. Scurry, Colliers International vice president specializing in corporate real estate, said retail in Columbia shares a similar forecast as office space and the industrial market. Driven by rising population, the downtown and suburban retail market both share great growth, Scurry said.
Activity in Columbia’s four downtown retail areas — Main Street, the Vista, Bull Street and Five Points — is “absolutely tremendous,” Scurry said. The suburban Columbia retail market — including Garners Ferry Road, Lexington, Irmo, Northeast Columbia and Forest Acres — also is healthy, he said.
“The very simple number to put all this in perspective is, when you look at how much retail was built from 2008 until present, we’ve got 650,000 square feet,” Scurry said. “When you look at what’s on the books for 2016 and 2017, it’s about a million-and-a-half-square-feet.”
Office: Paul Hartley, a NAI Avant senior leasing associate, said congestion that is becoming more common downtown is a sign of the city finally growing up.
The Columbia office market is tightening overall, Hartley said, and the quantity of quality office space, known as Class A, is becoming more scarce, especially in downtown, but also in all sub-markets, such as Irmo, St. Andrews, Cayce and West Columbia.
“Class A buildings, and especially downtown, are currently experiencing the lowest vacancy levels I can remember in decades,” Hartley said.
Downtown parking has never been in shorter supply, Hartley said. And it’s expected to get worse. The upshot: Offices on suburban Columbia markets could benefit from the downtown parking crunch because parking is such a hot commodity, he said.
Student housing: Fred Delk, Columbia Development Corp. executive director, said he expects at least two more projects to be announced on top of the thousands of beds aimed at University of South Carolina students coming online in the next couple of years.
That population growth in living around downtown should attract more retail shops and, perhaps, another grocery store, he said.