CBRE 2017 Southeast U.S. Real Estate Market Outlook Measures Regional Impact
Columbia – (February 2, 2017) – A strong governmental presence and the University of South Carolina help to foster economic activity and innovation in Columbia. Strategically positioned between two of the fastest-growing ports in the nation, Charleston and Savannah, the market is poised to see increased distribution activity over the long-term.
Downtown Columbia is enjoying resurgence, largely driven by increasing development, particularly in student-driven multifamily developments and an increase in redevelopment of governmental facilities. The vibrancy of downtown will be effective in recruiting and maintaining talent.
The Columbia office market has experienced consistent positive absorption and availability will continue to decrease, with a lack of new product in the development pipeline. For tenants rent growth began to slow toward the end of 2016 and is not expected to gain large momentum in the next two years.
The governmental influences as the state capital serve as serve as a strong anchor for the office market. With major tenants being governmental entities and supporting legal tenants, the market has a stable demand that provides a safer office investment opportunity than its size would suggest. There will likely be changes in ownership coming as new investors seek out stable markets to place capital.
Proximity to the University of South Carolina provides Columbia with a talent pool of young and highly educated individuals to facilitate business growth.
The industrial market in Columbia remains relatively small compared to South Carolina’s other markets. Existing buildings have maintained low vacancy rates and rent growth, which does not allow for any major new development. This lack of new development creates a dilemma for tenants looking to enter Columbia. Any new development would likely be build-to-suit and would face a challenging low supply of suitable land. Over the long-term, the market’s geographic location make it a strategic option for firms looking to access two of the fastest growing ports in the country in Charleston and Savannah.
The Columbia retail market has seen an increase in urban development and in particular, restaurants and mixed-use retail continues to produce favorable results and meet the needs of the urban population. The strength of the office market coupled with the minor league baseball park increase retail activity.
There is a substantial amount of suburban retail activity, as several grocers are active in suburban Columbia. The majority of space under construction is pre-leased.
The vibrancy of downtown Columbia is helping to promote the viability of multifamily housing. Because of the university, Columbia has a steady stream of demand for student housing. Traditional multifamily housing is more abundant than in the past as well.
From 2013 to 2015 2,100 multifamily housing units have been constructed, 80% of which is student housing. The development of non-student housing should help Columbia retain young talent from the university, which produces more than 5,000 degrees annually.
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