(Logo Courtesy of Colliers)
Healthy demand for office space in Columbia has propelled rent growth to levels comparable with Greenville and Charleston over the past year, fueled by post-Covid expansion activity and state agencies reassessing their space requirements, according to a 25Q3 report from Colliers.
Colliers said Class A leases are consistently closing at premiums of 10 percent year-over-year and approximately 25 percent above pre-Covid benchmarks, approaching $30/square foot in the resurgent CBD.
Much of the market’s top-tier vacancy has been absorbed, triggering development pressure as aging inventory imposes a soft ceiling on achievable rents in several properties, Colliers said.
Although Columbia trails Greenville’s sharp rent spikes by a few quarters, similar drivers are at play: rapid industrial growth, significant infrastructure investment and new-to-market tenants are generating fresh demand, particularly for engineering and professional services, Colliers said.
It said total inventory remained steady at 13,710,720 square feet with just one building, Palmetto Citizens FCU’s 104,000-square-foot headquarters, remaining under construction.
Strong leasing contributed to 119,065 square feet of net absorption, while investment activity began to pick up. Vacancy fell to 11.02 percent, the lowest of the state’s primary office markets.
Colliers also said:
* Q3 activity remained strong, marking the fourth quarter out of the last five with net absorption exceeding 75,000 square feet.
* Suburban assets have experienced a notable decline in vacancy, reversing Covid-era trends that left large blocks of space underutilized.
* Despite the market’s growing momentum, new multitenant construction remains unlikely due to a challenging financing environment and top-end rents that only marginally support development costs. These supply-side constraints are expected to intensify the impact of limited inventory in the coming quarters, driving continued rent growth and declining vacancy.
* The quarter’s most notable office sales transaction was the investment sale of Stephenson Center, a three-building, 104,300-square-foot flex office complex property in the St. Andrews submarket, for $9.95M.
The property was sold by RealOp Investments to a regional investor and brokered by the Colliers team of Henry Roe, Allen Wilkerson, Nolan Ashton and Tommy Whitmore.
Colliers said the sale highlighted growing investment demand for well-located, consistently occupied property, transacting at $95.40 per square foot.
The property has experienced strong occupancy growth, up from 82 percent to 97 percent at the time of sale, while seeing rents grow by over 30 percent in the past five years.
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