strong local economies, growing reputation bolster state's prosperity
Bolstered by strong local economies and growing reputations as sites for new business, major markets in the Palmetto State continue to prosper.
Anchored by the Greenville-Spartan, burg market, South Carolina's seven-county Upstate Region continues to feel the ripple effects of German luxury auto maker BMW's new manufacturing plant. A normally quiet Columbia is experiencing a surge of relocating businesses and a tightening office market. Meanwhile, a Charleston marketplace that was supposed to flounder in the face of cutbacks in the nation's defense expenditures is flourishing, with increasing levels of private investment taking the place of Uncle Sam's largesse.
Available Class-A space is becoming a scarce commodity in the Greenville market, according to Edens & Avant vice president Jan Cross. "Nearly all leasing has been going on in the Class-A segment of the market," she says, with large blocks of quality space increasingly difficult to find. Rate quotes for Class-A space in downtown Greenville fall in the $13.50 to $18 range, according to Cross, with suburban quote typically ranging from $13.50 to $15.50, and concessions virtually nonexistent marketwide. No new office construction is currently under way in this market, she adds, although there are "a lot of developers with plans waiting in line for a substantial anchor tenant."
In Spartanburg, the office market is "tight and getting tighter," with no new product on the way, reports Dan Dunn, executive vice president of Pulliam Investment Co. and broker-in-charge of Orion Properties. Rates for good-quality office space fall in the $10.75 to $1 1 gross range, according to Dunn, with concessions "a thing of the past -- I don't know anyone who is giving away anything these days."
Available industrial product in the upstate market is also scarce, according to Dunn, with stable demand from a diverse range of businesses currently accompanied by scattered construction. On the retail front, plans are progressing for the Rouse Co.'s new regional mall at the 1-85/U.S. 29 interchange, he notes, with plans recently announced by a local development concern for a mixed-use project nearby.
The Greenville-Spartanburg market was among the top six markets nationwide in a recent forecast of rental rate increases for apartment properties in 1995 by Washington, D.C.-based Urban Land Institute. The area also made ULI's lists of markets expected to see moderate rental increases in the downtown and suburban hotel segments.
After years of coming in a distant second to Greenville-Spartanburg in the economic development race, Columbia hit the big time in 1994. Businesses that announced new Columbia locations during the year included United Parcel Service UPS), with a new regional air hub at the Columbia Metropolitan Airport; Framingham, Mass.-based Bose Corp., with its first manufacturing plant in the Southeast; American Koyo Bearing Co., with a 121,000 sq. ft. automotive parts manufacturing plant; and Air South, a new airline that offers high-frequency jet service at low, unrestricted fares, with a headquarters facility.
"The I-77 area is a high-growth corridor," says David King of Columbia's Economic Development Alliance. "We're about to open the loop in June, which will allow product to be trucked between Charlotte and Charleston." King reports that over 1,000 new jobs have been gained in the I-77 area in the past year and $125 million has been invested in the area during the same time. "Our activity hasn't let off during the first quarter of 1995," he adds.
Columbia's new-found status as a relocation site has resulted in somewhat of a space squeeze. "Large blocks of available industrial space size are virtually nonexistent," forcing many new users to build their own facilities, says David Lockwood, vice president/leasing for The Keenan Co. In the office arena, "Large blocks of available Class-A or -B-plus space are virtually nonexistent," according to Koger Real Estate Services general manager Harvin Bullock.
Some new office construction is possible in the next 18 months in the suburban Gateway Park mixed-use development, adds Edens & Avant vice president Richard Stanland; meanwhile, the downtown Columbia market, where vacancy is currently in the 11% range, "is probably five years away from another major tower," he says.
"A lot of people thought Charleston would never recover from the defense downsizing that hit our shipyard -- but, instead, we never looked back," says Robert H. Nuttall Sr., president of The Keenan Co. of Charleston. During the last six months of 1994, according to a report published by the Columbia State, container shipping at the port of Charleston hit the 3.82 million-ton mark, an increase over 1993's level. Charleston was also recently selected by an international consortium of shipping lines as the South Atlantic port for shipments to Asia, a move that will reportedly result in an additional 65,000 containers handled annually.
A strong local economy has resulted in a tight Charleston office space market, according to Nuttall. Single-digit vacancy in the downtown sector has been accompanied by increasing rental rates, currently the $20 to $23 full-service range, he notes, "with concessions rapidly disappearing." Nuttall also reports that ground has been broken here for a new Saks Fifth Avenue store, part of a multi-use project incorporating retail, parking facilities and 47,000 sq. ft. of related office space.
Class-A suburban office projects are "either already full or filling up," says Nuttall, with rental rates currently falling in the $16 to $18 range. Several new projects are on the drawing boards, he adds, "but nothing is currently anchored or financed."