The glut of available office space downtown

[gman430]

Will County Square redevelopment ease downtown Greenville’s office crunch? 

According to the latest report by Colliers, the newest and most desirable office spaces (known in the commercial real estate industry as “Class A”) in Greenville’s central business district had a vacancy rate of just 4.4 percent, well beyond the 17 percent office vacancy rate in the Greenville-Spartanburg market as a whole. The Class A inventory in Greenville’s central business district is comprised of 17 buildings encompassing 1.79 million square feet, according to Colliers, of which just 79,000 square feet was vacant as of the second quarter of 2023. 

On top of that, there’s not a single office building currently under construction in Greenville or its suburbs, Tollison added—hampering the flight to top-level spaces that companies view as crucial to keeping employees in the office.

Enter the much-talked-about Greenville County Square redevelopment project, which aims to transform 37 acres in the central business district into a mixed-use area featuring over 800,000 square feet of new office space. Is that project alone capable of easing Greenville’s Class A office space squeeze?

Rental rates also continue to rise in the CBD. The most recent mixed-use building constructed in downtown Greenville with Class A office space was Falls Tower at Camperdown, which was completed in 2020. Since then, rising construction costs have translated into higher per-square-foot leasing rates. Bank of America and the accounting firm Elliott Davis moved into the Camperdown complex for rents around $33 per square foot, Tollison said. Lima One Capital’s rate in the County Square project will be around $43 per square foot, he added.

“For Greenville, that is a substantial jump,” he said. “We were doing deals downtown at $25, and still are in older product. So that’s a really, really big disparity in rents. I mean, you’re talking almost 100 percent more. So that’s the challenge, and that’s why nothing has kicked off.”

“It’s a fascinating time,” Tollison added. “We always say that Greenville sees a (new office) building every three to five years. That’s not exact, but it’s what it seems to be like. Now, Camperdown was delivered in 2020—it’s been at least three years, and there’s nothing under construction. So it’s going to be at least five years before a new building is delivered. The market is just constrained.”

More: https://www.postandcourier.com/greenville/real-estate/special-report/will-county-square-redevelopment-ease-downtown-greenville-s-office-crunch/article_f0d34eea-20f6-11ee-a7bc-dff0e8920f77.html

Edited July 15, 2023 by gman430

[timbach]

On 7/15/2023 at 7:45 AM, gman430 said:

On top of that, there’s not a single office building currently under construction in Greenville or its suburbs, Tollison added

Isn't a bank currently building its headquarters in the form of an office building (with attached bank)? Or are they not counting office buildings built by and for the tenant?

[gman430]

Ned Reynolds and Chris Prince represented the landlord, 131 Falls St LLC, in leasing 3,303 square feet located at 131 Falls St., Greenville, to the tenant, DRCFN Inc. d/b/a ASE Financial Advisory Group.

Chris Prince and Ned Reynoldsrepresented the landlord, Samuel C. McGee, in leasing 2,400 square feet located at 201 E. Broad St., Greenville, to the tenant, JM Cope Inc.

Rakan Draz, Macy Scoggins and James McKay represented the landlord, 1 Augusta Street Investors LLC, in leasing 525 square feet located at 1 Augusta St., Greenville, to the tenant, C. Dan Joyner Co. Inc. d/b/a Berkshire Hathaway.

Charles Gouch, Blaine Hart and Shelby Dodson represented the landlord in leasing 65,000 square feet at the new Greenville County Redevelopment site in Greenville.

Charles Gouch, Blaine Hart and Shelby Dodson represented the landlord in leasing 16,028 square feet in Liberty Square located at 55 Beattie Place, Greenville.

Charles Gouch, Blaine Hart and Shelby Dodson represented the landlord in leasing 15,306 square feet in Liberty Square located at 75 Beattie Place, Greenville.

Charles Gouch, Blaine Hart and Shelby Dodson represented the landlord in leasing 7,812 square feet in Liberty Square located at 55 Beattie Place, Greenville.

Brian Scurlock represented the tenant in leasing 2,592 square feet located at 14 S. Main St., Greenville.

Charles Gouch, Blaine Hart and Shelby Dodson represented the landlord in leasing 1,154 square feet located at 300 N. Main St., Greenville.

Harry Croxton represented the tenant, Kate Kandel LLC, in leasing a 2,068-square-foot office space located at 200 Westfield St., Suite B, Greenville, from the landlord, 200 Westfield LLC.

John Daniel represented the tenant, US Endowment & Forestry, in leasing a 4,890-square-foot suite located at 10 S. Academy St., Greenville, from the landlord. McNeil Epps represented the landlord.

Keith Jones, McNeil Epps and Hunter Garrett represented the landlord, 135 South Main Street LLC, in leasing 423 square feet of office space located at 135 S. Main St., Suite 401, Greenville, to the tenant, Daybreak Investors LLC.

Keith Jones, McNeil Epps and Will Williamson represented the landlord, CAPA Real Estate LLC, in leasing 9,439 square feet of office space located at 301 N. Main St., Suite 501, Greenville, to the tenant, Reedy Property Investments LLC. 

Grayson Burgess represented the landlord, Northside Traders LLC, in leasing a 3,500-square-foot office space located at 18 S. Markley St., Greenville, to the tenant, Encore Bank.

Josh Hakala and Matt Fosterrepresented the landlord, KVP INC, in leasing a property located at 109 E. North St., Greenville to the tenant, Collins Law.

Tyler Felt and Bobby Barretorepresented the landlord, JDC LLC, in leasing 2,500 square feet of office space located at 508 E. North St., Greenville, to the tenant, Collective Intelligence Group

[gman430]

UCB has put their current office building up for lease: https://www.loopnet.com/Listing/306-E-North-St-Greenville-SC/28346933/ to prepare to move into their new building which is why you saw the vacancy rate rise for Class A space in the CBD from Q2 to Q3 in the below chart: 

Edited October 11, 2023 by gman430

[gman430]

“Construction has been on the rise in Greenville, driven by a few large adaptive reuse and conversion projects. About 480,000 SF of office space is currently under construction, with most of that preleased.”

Source:  https://acrobat.adobe.com/link/track?uri=urn:aaid:scds:US:1ed1dba4-10f3-31d7-a085-d803e351c896

Edited November 11, 2023 by gman430

[gman430]

Latest vacancy office report numbers from Colliers for the Greenville CBD. All classes showed a drop in vacancy rates from last quarter: 

Class A-7.05%. 

Class B-19.60%. 

Class C-35.26%.

“The lack of new construction is anticipated to lead to a decrease in vacancy rates for Class A and B spaces, with activity expected to increase during the next quarter following stabilizing interest rates. Overall, the market remained stable with 132,727 square feet of absorption, bringing vacancy down to 17.06%. Class A lease rates may increase in the first quarter, driven by the addition of 50,000 square feet of supply this quarter. However, the landscape of proposed projects underwent a shift, as several initiatives faded away due to the challenging lending environment and high construction costs.”

Edited January 4 by gman430

[gman430]

Say bye bye to the Greenville News downtown: 

https://www.postandcourier.com/greenville/business/greenville-news-leaves-downtown-camperdown-building-for-sale/article_14b22ee6-ae67-11ee-9a76-bbed655f7438.html

In addition to that space, a little over 25,000 square feet of Class A office space is now for lease at ONE thanks to UCB leaving it for their new headquarters. Can’t forget about the 40,000+ square feet of Class A office space for lease at UCB’s building next to the federal courthouse either.

Edited January 11 by gman430

[vicupstate]

The UCB building is a very prominent and high visibility site and the building is still pretty new.  It would be great if a new to Greenville tenant took all of it.  

[gman430]

Building permit issued for 2 North Main office space. 26,000 square feet. 

Building permit issued for 101 East Washington Street. A little over 7,000 square feet. 

Edited January 20 by gman430

[gman430]

https://gsabusiness.com/colliers-helps-atl-logistics-find-new-offices-in-downtown-greenville/

[GvilleSC]

2 hours ago, gman430 said:

https://gsabusiness.com/colliers-helps-atl-logistics-find-new-offices-in-downtown-greenville/

Their current space is in the Falls Place building on the river level. I wish the owner would turn that space into a retail use. 

[gman430]

Out of 60 locations listed throughout the country in the below report from CBRE, Greenville had the fourth lowest office vacancy rate for the downtown and second lowest for the suburbs for Q4 2023: 

https://mktgdocs.cbre.com/2299/c85eda05-a80d-4156-8958-13c3bd7fab6c-2009844453.pdf

I assume this is only for Class A space. 

Edited February 10 by gman430

[gman430]

Latest report from Colliers: 

https://4016996.fs1.hubspotusercontent-na1.net/hubfs/4016996/Market Reports/2024 Reports/2024 Q1 Greenville-Spartanburg Office Report.pdf?__hstc=233546881.36e57ed54283a3a1a5945f3c8f5a05fb.1712221072923.1712221072923.1712676505702.2

Office vacancy rates for CBD: 

Class A-9.40%

Class B-18.46%

Class C-33.05%

“Overall office performance improved in the first quarter of 2024 as 202,074 square feet were absorbed, decreasing vacancy to 16.25%. Expansions downtown were also more prevalent, removing blocks of higher-rate Class A and B spaces from the market. This absorption of available space caused a decrease in overall Class A lease rates to $27.43 per square foot due to the remaining vacancy being in less desirable buildings, however, Class B spaces experienced an increase and C spaces remained flat. The Greenville-Spartanburg office market remains attractive and performance metrics are expected to further improve in the second quarter of 2024.”

 

Edited April 12 by gman430