In today’s age of working from home, Zoom University, and online shopping, many believed the commercial real estate industry would be one of the hardest hit during the pandemic. However, the Columbia market remains fairly stable according to Q2 reports from local commercial firms.
Office and retail properties have taken the hardest hits, as many national companies are still working from home, and U.S. consumers are still reluctant to get back into brick and mortar stores. However, there has been a silver lining in the commercial market, as industrial properties have seen an increased demand due to companies seeking to move more of their overseas operations back to the United States. Industrial properties have also seen an uptick in demand due to the increase in e-commerce, as firms such as Amazon and Walmart seek additional logistics and distribution facilities to keep up with consumer e-commerce demand.
According to data from local firm Wilson Kibler’s Q2 Columbia market report, office vacancies were up to 7.6% in Q2, which shows a significant increase from the 7% rate seen in Q1. While the future is uncertain, the market seems to be regaining its footing, as more companies are welcoming back their employees. However, the future of the market depends on a myriad of factors including how local, federal, and state governments continue to manage the ongoing crisis, as well as, how landlords adapt their office space to meet increasing public health needs, according to Wilson Kibler’s report.
Wilson Kibler’s Q2 Industrial Report however, paints a very different picture, showing record-low vacancies, and increased demand for logistics and warehousing space. The report cites increased e-commerce, and a renewed demand for domestic manufacturing as the main market drivers, as more firms seek to move operations back to the U.S. in order to avoid risk and uncertainty due to Covid-19. Q2 industrial vacancy rates are currently 3.4%, down from 4% in Q1, and 5% in Q2 2019. The outlook for the Columbia industrial market is strong as companies continue to move their operations stateside, and seek easy access to the Ports of Charleston and Savannah.
In conclusion, the trends seen in Columbia’s commercial market broadly reflect national trends seen throughout the Covid-19 pandemic. Warehousing, distribution, and fulfillment centers continue to be in high demand, while traditional office space faces continued challenges. Time will tell how long these trends will continue as the nation’s economy continues to face uncertainty surrounding the pandemic, but as a whole, Columbia’s commercial market remains on solid footing.
The full market reports can be found on Wilson Kibler’s website, wilsonkibler.com