Staff Report
Published Sept. 9, 2011

The build-to-suit activity is expected to increase for the rest of 2011 for the Greenville, Spartanburg, Anderson market, according to a quarterly commercial real estate report by Colliers International.

Developers showed interest in acquiring sites for build-to-suit activity and construction reappeared for the first time since the start of the recession, during the second quarter of 2011.

Tenant activity in the Greenville office market slowed during the second quarter, resulting in a net decline in occupancy by 19,968 square feet, which resulted in an 18.4% vacancy rate at mid-year 2011.

Several existing firms, mainly in the engineering sector, caused the negative absorption. Several economic development announcements could bring momentum in the coming months, such as Project One, a mixed-used of office and retail tenants at Washington and Main streets in downtown Greenville.

Class A space has been tightening since the last half of 2010, causing rental rates to increase from $15.37 per square foot in the first quarter of 2011 to $16.48 per square foot at mid-year 2011.

“It has become increasingly difficult for tenants to find large blocks of quality, Class A space in downtown Greenville, which further resulted in Class B absorption,” according to the report. “Class B landlords that can creatively structure deals and tenant improvement packages may be able to attract activity from traditional, downtown Class A tenants.”

The suburban market downsized tenants during the second quarter, creating a downturn. There was an abundance of space options from 1,000 square feet to 75,000 square feet, the report said.