Commercial real estate market shows growth across South Carolina


As the U.S. economy emerges from the pandemic shadow of the past two years, South Carolina’s commercial real estate market remains strong and poised for continued growth across all sectors, but especially in the industrial segment.

In the industrial sector, the story across South Carolina has been supply and demand, said Allen Wilkerson, vice president of Colliers International in Colombia.

“When you look at the growth in rental rates and you look at construction statewide, it’s been at the highest level it’s probably been in the history of the state,” he said. declared.

And growth should not be slowed down any time soon, even with an anticipated rise in interest rates.

While Wells Fargo economists and analysts expect long-term interest rates to rise gradually over the next few years, they expect only modest increases.

They believe that slowing labor force growth and an aging population on top of a global savings glut are powerful structural factors that will likely keep rates capped for years to come. That said, interest rates appear to be rising toward levels more in line with those seen before the pandemic, economists said in a recent report.

They argue, however, that an increase in capitalization rates, a measure of the rate of return expected from a real estate investment property, is unlikely. At the start of the pandemic, cap rates did not fall as quickly as interest rates, which means there is likely enough room for interest rates to rise without significantly affecting equity. capitalization rate, the economists said.

Meanwhile, growth in the industrial, office and retail segments is expected to continue in the upstate metropolitan markets of Greenville-Spartanburg, Columbia and Charleston.


Upstate, Colliers reported that for 2021, 10 million square feet of new industrial projects have been announced and more than 5 million more are planned. Annual net absorption for 2021 was a record 10.2 million square feet, and 2022 is expected to follow suit.

The return of in-person shopping also bodes well for upstate, with Colliers reporting that vacancy rates fell to 4.2% in the fourth quarter of 2021 from 5.8% a year earlier. “The positive retail market environment will continue to drive retail activity throughout 2022,” Colliers said.

And on the office front, commercial real estate firm Cushman & Wakefield’s fourth quarter report on the upstate market noted that “despite minimal construction completions for 2021, the Greenville-Spartanburg pipeline remains robust. with over 945,000 square feet of new product expected to ship in 2022 and 2023.”


At Columbia’s industrial market, Colliers reports that demand is strong and available space is scarce. “Tenants are considering executing leases a year or more prior to delivery to secure space in buildings under construction or planned,” Colliers said in its fourth quarter report.

Columbia’s retail market is also doing well, with shoppers returning to stores as the pandemic abates. Colliers reports that retail vacancies in the market have steadily declined over the past year to 4.75%.

In the office market, Colliers said that although the vacancy rate increased to 15.5%, largely due to the pandemic, Class A rents remained stable. And Colliers noted that buildings that have been renovated and added amenities have done well as tenants seek high-quality space to encourage their staff to return to the office.


Spurred by an increase in online shopping during the pandemic and the SC Ports Authority’s focus on warehousing and distribution operations, as well as continued support for in-state manufacturers, Charleston is poised to experiencing steady industrial growth.

For the fourth quarter of 2021, commercial real estate firm CBRE reported that Charleston’s industrial market had nearly 10 million square feet of space under construction. The market also continued to expand along the Interstate 26 corridor to I-95 and beyond.

A recent CBRE report, “Supply chain disruptions create new opportunities for industrial and logistics real estate,” noted that “demand will be highest in logistics hubs that can reach large population concentrations. with lower transportation costs.

Strong demand in the industrial sector has also helped the Charleston office market rebound in 2021, with CBRE reporting that 275,000 square feet have been positively absorbed. Charleston’s retail market saw positive net absorption of nearly 176,000 square feet in the fourth quarter of 2021, according to Colliers, boosted by tourism and a return to in-person shopping.


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