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Greenville Business Magazine

SC Real Estate Simmering on All Fronts

Nov 23, 2020 02:16PM ● By David Dykes
By L. C. Leach III

Be it large or small commercial, industrial, office, retail, residential, or space devoted to tourism and greenery, the current real estate market in South Carolina is a boom looking for a place to erupt.

And during the inaugural SC Leadership Exchange webinar in November, real estate experts from Greenville, Charleston, and Columbia all said that once Coronavirus (Covid-19) has run its course, that eruption will happen almost anywhere in the state – from mountains to foothills to sand hills and coast.

"I would not want to be anywhere else in the country right now except South Carolina," said David Lockwood, executive vice president and chief operating officer of Colliers International South Carolina. "In the next few years, South Carolina and the southeast are going to be the beneficiaries of a lot of great activity."

Part of Lockwood’s optimism was illustrated with factors and data that influence real estate, as compiled by Colliers, including:

• Industrial Sector Occupancy. Comparing third-quarter 2020 to third-quarter 2019 throughout the state, occupancy rates in industrial sector space were up by an average of 1.3 percent in both Columbia and Charleston.

• Office Sector Occupancy. In further comparing third-quarter 2020 to third-quarter 2019, occupancy rates in office sector space was down by an average of only 1.75 percent in both Charleston and Greenville.

• Employment. In South Carolina’s four major economic areas of Columbia, Charleston, and the Upstate around both Greenville and Spartanburg counties, employment during Covid-19 has fallen by a state average of only 3 percent.

"The numbers do not reflect the total effects of the pandemic, which we will start to see by the fourth quarter of 2020," Lockwood said.

• Education. Approximately 46 percent of Charleston’s workforce currently holds a bachelor’s, master’s, or associate’s degree – compared to Columbia with around 43 percent, and Greenville-Spartanburg with about 40 percent.

Lockwood said that factor gives the Charleston job market, and thus its real estate market, an edge over other parts of the state because of the "the higher level of education of people moving into that area."

• Residential Real Estate. Despite the Covid-19 pandemic, South Carolina is in the middle of a huge residential sellers’ market.

For example, the Greater Greenville Association of Realtors reports that from June to October 2020, residential homes and property in Greenville surpassed the 7,500-sales mark – compared to 6,564 units sold during the same time period in 2019.

Lockwood said going forward, he expects this trend to become even stronger.
"Residential drives commercial, and South Carolina is a hot state to move to," Lockwood said. "We’re seeing people flock back to the suburbs, and a shift of people from high-dense apartments to smaller residential units…so they can be protected in this pandemic environment."

And Bob Nuttall, managing principal with Lee & Associates commercial real estate agency in Charleston, pointed out that he and other colleagues are sometimes experiencing the luxury of a sale without selling.

"People from the northeast are buying beachfront property sight unseen," Nuttall said. "Kiawah, for example, just set two monthly sales records in terms of dollars transacted because of the demand for coastal properties."

• Parking. In Greenville, Columbia, and Charleston, Lockwood said people are holding onto – and continuing to pay large monthly rates – for parking spaces "even though they’re working remotely and haven’t been in the office in seven months."

"We survey parking rates in SC, and the interesting thing is that employees and companies, they haven’t given up their parking spaces," he said. "(Which tells me that) our South Carolina companies are dying to get back into office and are keeping their parking because they don’t want to lose control of it."

Charles Gouch, senior vice president with CBRE, commercial real estate services company in Greenville, added that while Covid-19 has caused 850,000 square feet of real estate space to be put back on the sub-lease market, signs are already pointing to what could be a record, post-coronavirus boom.

"We have a tremendous amount of groups that are ‘circling,’" he said. "We’re getting a lot of inquiries from Chicago, St. Louis, Cincinnati, New Jersey – all those markets have companies that are looking in our area."

When asked about the future of all forms of real estate in South Carolina after the pandemic is over, Gouch, Nuttall, and Lockwood all agreed that South Carolina is poised to come out of the pandemic better than many other states because land, office space, and industrial sites here are expected to reach and remain in high demand.

"Charleston’s going to be over a million people in 2030, and I’d still rather be here than other big cities," Nuttall said. "We live here, so we’re biased. But for a business climate, I think we have one of the best states out there."