GSA Daily Staff Report
Published Nov. 4, 2010

The office-vacancy rate in the Upstate dropped to 17.2% during the third quarter, according to a report released today by CB Richard Ellis | The Furman Co.

Property owners continue to lower rental rates, however. Asking rates in the Greenville-Spartanburg market averaged $16.42 per square foot, the largest quarter-to-quarter decline in more than two year, CBRE said.

“If declines in vacancy can be sustained, rates should eventually rise,” the report said.

While rates were down quarter-to-quarter, they were up year-over-year.

CBRE warned that some large tenants are considering a consolidation of space, which would negatively impact the market. Additionally, high unemployment continues to weaken the economy.

“Employment is one of the most important indicators of commercial real estate demand,” CBRE said.

On the other hand, Southwest Airlines’ decision to launch service in March at the Greenville-Spartanburg International Airport should help recruit out-of-market office tenants to the Upstate, the report said.