Marcus & Millichap

South Carolina Office Market Report

Second Quarter 2018 Outlook

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Investors Eyeing Smaller Markets in South Carolina for Higher Returns

Downtown redevelopment brightens Greenville office outlook. Greenville County officials recently signed an agreement to redevelop up to 37 acres of county-owned land on University Ridge in the city of Greenville. Plans for the County Square development include the replacement of the existing county office building, additional office space, residential units, retail space, a hotel and public areas. Temporary offices for county workers during construction as well as improved neighboring property values should benefit existing office buildings nearby.

Employment and population gains generate office demand in Charleston. Vacancy in Charleston is the tightest among the major South Carolina metros as companies move to and expand here. Population growth will also create a need for additional office space as businesses such as law, real estate and insurance firms grow. Deliveries will rise to a cyclical high in 2018, softening fundamentals as multiple buildings search for tenants.

Smaller markets getting noticed. Lower rents and available space are directing tenants to less populated South Carolina metros such as Columbia. Rents in many neighborhoods within these cities have yet to reach a point to justify new construction, keeping competition to a minimum. These factors coupled with lower entry costs and higher yield potential also attract buyers.

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