New office construction will likely boost absorption in 2020
- The I-385/I-85 submarket was the most active during the fourth quarter of 2019; it absorbed 46,485 square feet of office space.
- Office-using jobs have declined over the past year lessening the demand for office space in the Greenville-Spartanburg market.
- New Class A construction is expected to deliver in 2020 and will likely add to positive absorption and lower vacancy rates.
2019 Office Recap
The Greenville-Spartanburg office market absorbed 619,545 square feet over the past 12 months, 390,984 square feet of which was Class A office space. The I-385/I-85 submarket was the most active over the past year absorbing 477,180 square feet. There were five buildings delivered to the Greenville-Spartanburg office market over the past year, adding 130,769 square feet. The overall market vacancy rate dropped from 12.60% during the fourth quarter of 2018 to 10.14% this quarter. Overall average weighted rental rates fluctuated over the past 12 months, but ended up 1.8% higher than this time last year. Suburban submarkets have lower rates than they did at this time last year; however, the vacancy rate has also declined 302 basis points indicating the higher-priced spaces in the market have been absorbed. The overall market weighted rental rates averaged $20.79 per square foot during the fourth quarter of 2019.
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