High-quality office space is in demand in the Columbia area by both employers and employees as more people return to office work after two years away because of the pandemic, according to a market report from Colliers’ Columbia office.
The Class A office vacancy rate in Columbia’s Central Business District dropped to 12.47% during the second quarter due to 55,062 square feet of absorption, according to the report. The Class A building under construction at 2300 Bull Street, set to open before the end of the year, has pre-leased 25,000 square feet. In addition, Colliers said much of the quality sublease space downtown has leased.
According to the report, owners with Class A office space and those willing to invest in Class B office building can expect positive lease activity in Columbia through the end of the year.
“Owners who are willing to invest in Class B facilities will likely see positive lease activity due to a lack of Class A availabilities,” Colliers said. “Owners should continue to expect tenants to carefully examine their space needs in an attempt to better define their office footprint.”
This phenomenon, called “flight-to-quality,” follows a national trend toward higher quality office space that has emerged since the return to the workplace started, and is motivated by hiring and employee-retention, the report said.
“Tenants want to lease space in quality buildings offering multiple amenities, even if they choose to downsize,” the report said. “The concert of lower-quality, dense office space is fleeting. “