Q4 2023 Market Reports
Columbia’s overall affordability and consistent demographic trends over the past three years have helped boost demand for Columbia’s industrial stock, which in turn, helped industrial owners push rents in recent years. Tight vacancies and minimal construction over the past decade have allowed for strong rent growth. Rents have increased by about 7.5% over the past year and 31.6% cumulatively over the past three years. Logistics rent growth is the strongest, at 8.5% annually, surpassing the national trend of 7.1%. Rents in the market align with the statewide average, at roughly $7.60/SF, but are still more affordable than nearby metros such as Charleston and Charlotte. Logistics rents run a bit lower, depending on the total space rented and the length of the lease. Unsurprisingly, properties closer to Columbia’s major interstates, such as I-26 and I-77, command slight premiums in rent compared to the rest of the inventory.
Office demand had been negative for eight out of nine quarters before rebounding in 23Q3. That, coupled with a small uptick of around 290,000 SF of new office space that has come on line over the past three years, has put upward pressure on vacancy in the market thus, affecting rent growth. Rents in the Columbia market have been structurally less expensive than most markets in South Carolina. With the market largely supported by the public sector, the recent trend of right-sizing and movement stemming from government agencies and the shifts in hybrid/remote working conditions in the area have put even more of a strain on the market’s historically stable fundamentals.
Strong leasing activity and very little supply side pressure has pushed Columbia’s retail vacancy rate to the lowest point on record. The market-wide vacancy rate in Columbia is now at 3.1% and is expected to continue trending downward into late 2023 as little new inventory is on the horizon.