NAI Avant reports improvements in commercial real estate market

Staff Report
Published Feb. 20, 2012

The commercial real estate market in the Columbia metro area showed steady improvement during 2011 as vacancy rates for office, retail and industrial space dropped, according to NAI Avant’s commercial real estate report.

Citing the latest labor reports, NAI Avant noted there has been six consecutive months of positive growth. In December, 348,500 people were employed in the Columbia area — 21,600 short of its peak in 2007.

“This positive trend was a contributing factor to the performance of Columbia’s commercial real estate market, which ended the fourth quarter with positive net absorption in all market segments,” the report said.

While vacancy rates are going down, the report also noted that neither office nor industrial space were under construction at the end of the quarter. But retail appears to be growing as three new buildings totaling 66,775 square feet were delivered during the quarter and another space totaling 22,711 square feet.

The industrial market ended the fourth quarter with a net absorption of 792,756 square feet. The vacancy rate for the fourth quarter was 10.6%. The average asking rental rate dropped 2 cents to $4.06 per square foot from $4.08 at the end of the third quarter. Flex space went for $8.34 a square foot while warehouse rates averaged $3.79 per square foot.

The office market ended the fourth quarter with an 8.9% vacancy rate, down from 9.3% for the previous quarter. Overall about 134,496 square feet of office space was absorbed during the three-month period.

The vacancy rate for downtown Columbia office space averaged 10% for the quarter. In the suburbs, Forest Acres averaged 18%, followed by St. Andrews, 11.2%; Dutch Fork/Irmo, 8.8%; Lexington, 8.5%; Northeast Columbia, 7.6%; and Cayce/West Columbia, 7.5%.

The average asking rate for all classes of office space was $14.63 per square foot, slightly down from $14.67 for the third quarter. Rent for Class “A” space average $17.13 per square foot, Class “B” was $14.51, and Class “C” was $11.51.

The retail market saw little change from the previous quarter. The vacancy rate rose to 6.5% in the fourth quarter compared to 6.4% for the third quarter. Overall, about 42,000 square feet was absorbed in the fourth quarter. The average asking rate for the Columbia market was $12.10 a square foot. Downtown Columbia had the highest average retail rent at $14.49 per square foot, followed by Forest Acres, $14.08; and Lexington, $13.87.

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NAI Avant reports improvements in commercial real estate market