MARKETBEAT

MARKETBEAT

Greenville, SC
Office Q1
Office Q22018
2018

GREENVILLE, SC OFFICE Economy

Encouraged by stable market conditions, inflation nearing its 2% target,
Economic Indicators
and a healthy labor market, the Federal Reserve Bank approved
12-Month another increase in the fed funds benchmark rate to 2.00% from
Q2 17 Q2 18
Forecast
1.75%. Although the U.S. is experiencing the second-largest economic
Greenville Employment 415k 422k
expansion on record, this rate hike signaled a cautious optimism for the
Greenville Unemployment 3.7% 3.7%
U.S. economy. Rising interest rates coupled with the recent federal tax
U.S. Unemployment 4.3% 3.8% reform should enhance investor appetite and lead to a further increase
in market activity throughout 2018.
Numbers above are quarterly averages; May 2018 data used to represent Q2 2018
Market Indicators (Overall, All Classes)
Market Overview
12-Month In the Greenville office market, the continued performance and growth
Q2 17 Q2 18 Forecast
of the financial and professional services sectors have contributed to
Vacancy 8.1% 8.2% leasing activity remaining robust. Overall office vacancy was at 8.2%
Net Absorption (sf) 352k -88k as 88,000 square feet (sf) was negatively absorbed. Average asking
Under Construction (sf) 1m 143k rent experienced a 9.2% increase from last year at $19.25 per square
Average Asking Rent $17.63 $19.25 foot (psf). The average rent for office space in Greenville CBD reached
a historic all-time high at $25.00 psf. Current large block availabilities in
*Rental rates reflect gross asking $psf/year both CBD and suburban markets have led landlords to increase free
rent and other market incentives in order to attract new tenants in such
Overall Net Absorption/Overall Asking Rent a competitive environment. Jacobs Engineering leased 201,126 sf at
4-QTR TRAILING AVERAGE 1041 E Butler Rd in the Woodruff/I-385 submarket.

Sales transaction volume is currently trending nearly 50% more than

$20.00 12%
the historical average due to investors taking note of Greenville’s
strong fundamentals and their expectation of future growth. Dominion
$18.00 10% Realty Partners out of Virginia entered the market in June and
purchased 300 N Main St. (also known as The Ogletree Building) for
$16.00 8% just over $11,420,000 or $187.07 psf. In April, ElmTree Funds, an
investor based out of Missouri, acquired 1041 E Butler Rd in Brookfield
Park for $24,300,000 or $115.64 psf.
$14.00 6%

Outlook
$12.00 4% Greenville’s office market fundamentals will remain tight in 2018.
2012 2013 2014 2015 2016 2017 2018
Asking Rent, $PSF Vacancy % Investors should be keen to capitalize on the benefits from changes in
the tax policy before another increase in interest rates. Tenants in
market should pay close attention to the oversupply of inventory as
competitive leasing environments can lead to significant cost-saving
opportunities such as free rent and tenant improvement allowances
given by landlords who are desperate to lease their space.

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Cushman & Wakefield | Thalhimer For more information, contact: Cushman & Wakefield is a leading global real estate services firm that delivers exceptional value by putting ideas into
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www.thalhimer.com ©2018 Cushman & Wakefield. All rights reserved. The information contained within this report is gathered from
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