Steady leasing has led to a decline in vacancy in Columbia’s industrial market. In a new report from Colliers International, the market finished its third quarter with 410,000 square feet of absorption.
The total vacancy rate finished at 9.52%, down from 10.8% at the close of the second quarter. The report found 45,600 square feet of the total absorption is from new construction.
The warehouse and distribution sector makes up the largest portion of the Columbia industrial market with more than 42 million square feet. At the end of the third quarter, vacancy in that sector fell to 8.17% and 229,880 square feet were absorbed. Rents were at a triple net rate of $3.30 per square foot per year.
Vacancy in manufacturing fell from 12.07% to 11.45%, with an overall absorption of 141,008 square feet. Rents were triple net rate of $2.84 per square foot per year.
The flex market saw 39,500 square feet absorbed, making the vacancy rate fall to 16.23% at the end of the third quarter. Average rents were triple net rate of $10.01 per square foot per year.
According to Colliers’ report, a statewide expansion of logistics, automotive and aeronautical production is driving the expansion of manufacturing in the Columbia market. Samsung’s purchase of the 453,000-square-foot Caterpillar manufacturing facility in Newberry marked the most significant sale of the quarter. The $14 million sale has spurred lease transactions in the market.
There is 1.8 million square feet under construction in the Columbia area, a near-record high. That includes China Jushi’s 818,000-square-foot manufacturing facility in Southeast Columbia, Miller Valentine’s construction of a 200,000-square-foot Midway II speculative warehouse in the Lexington County Industrial Park, and Phase II of the Continental Tires manufacturing facility that will add 720,000 square feet.
The report forecasts leasing activity to remain brisk during the next several quarters as these construction projects are completed and additional speculative buildings begin construction in 2018.