Spartanburg, S.C. Industrial Real Estate Trends
In Spartanburg, S.C., there is currently 111 million square feet of industrial real estate inventory.
Vacancy
The current vacancy rate is 9.9%, which is a significant increase from the 3% vacancy rate in early 2022.
However, the vacancy rate varies significantly across different types and sizes of industrial properties.
For industrial/ flex properties in Spartanburg that are 50,000 square feet and under, the vacancy rate is 4.5%.
From 50,000 to 100,000 square feet, the vacancy rate is 5.2%.
For industrial properties 100,000 square feet and larger, the vacancy rate is 11.9%.
Therefore the 9.9% vacancy rate is largely attributed to larger industrial projects that are yet to be leased.
Construction and Absorption
There is 10.8 million square feet of industrial buildings currently under construction in Spartanburg.
Of the 10.8 million square feet under construction, a whopping 10.5 million square is industrial buildings 100,000 sq ft and larger.
Therefore, a very small fraction of new developments are being built to fill the demand for smaller industrial spaces.
1.8 million square feet of industrial space has been absorbed in the past 12 months.
Cap Rates, Pricing, Rent Growth
The average industrial cap rate in Spartanburg is 8.2% which is slightly higher than the average industrial cap rate of 7.9% at the end of 2022.
The average industrial price per square foot for lease is $6.17 with a year over year rent growth of 10.53%.
Although rent growth has slowed since 2022 (12.5% rent growth), industrial rent growth is outpacing historical averages (a low of -3.5% and a high of 6.2% from 2010 to 2020).
United States Industrial Trends
There is currently 18.5 billion square feet of industrial square footage in the United States and 553 million square feet under construction.
Annual absorption was 233 million square feet in the past 12 months, and the average cap rate is 6.8%.
Average industrial rents nationally are much higher than in Spartanburg.
The average price per square foot for lease in the United States is $11.72. Annual rent growth is 7.83% which is trending behind Spartanburg's annual industrial rent growth of over 10%.
The average industrial vacancy rate across the United States is 5.0%.
For a full comparison between industrial trends in Spartanburg, Greenville, and across the United States, read a recent McDaniel and Company blog on this topic: Industrial Real Estate Overview- Spartanburg, Greenville, and US Trends - McDaniel and Company
Source: Costar
| 
