While Upstate employers are still hesitant to make long-term commitments to an office space during the COVID-19 pandemic, Cushman and Wakefield Thalhimer’s office market report for the last quarter shows that office rents rose by 6.8% over 2020.
Vacancy rates have increased to 11.2% and absorption is in the red at less than negative-127,000 square feet, a noted drop from 2019’s 400,000-square-feet of positive absorbtion. But the fourth quarter of 2020 was relative healthy for the Greenville-Spartanburg metro area’s economy as it has recovered more than 90% of initial COVID-19 job losses, according to the report.
The last quarter added 10,000 more jobs to the Upstate’s employment numbers, bolstered by Techtronic Industry’s promise to create 525 jobs in Anderson with its $100 million investment and Armada Analytics’ Greenville expansion slated to develop 33 positions.
Low interest rates, among other factors, incentivized the 4Q office market to be a seller’s playground. Demand for office space for sale outpaces the supply in the Upstate, though more square feet were delivered to the market in 2020 than in years past.
Sublease opportunities are on the rise as employers search for short-term office space commitments, adding to a total of 232,216 available square feet in the Greenville-Spartanburg office market, according to the report. Despite the discount provided by sublet properties, office sales prices have remained stable, while rent has climbed to $22.35 per square foot since the final quarter of last year.
Anderson County’s office vacancy rates settled at 0.9%, balanced by the 6,000 square feet absorbed in the county during the previous quarter and its dearth in office construction. Greenville’s central business district saw a 12.4% vacancy rate rivaled by the county’s suburban 13.4% vacancy rate. Both Greenville markets saw negative-605,893 square feet absorbed in the county with 10,351 square feet under construction in the central business district, according to the report.
Spartanburg vacancies reached 9.4% in the central business district and 9.7% in the suburbs with a respective net absorption of negative-85,929 square feet and 16,240 square feet. No office space is under construction in the county.o