August Spencer
(Logo Courtesy of Colliers)
Greenville-Spartanburg experienced its first quarter of net negative absorption in over a year driven by a wave of bankruptcies by national retailers, belying the market’s overall strength, according to a Colliers 25Q1 retail report.
Key takeaways:
* Early-year national retailer closures created well-positioned opportunities for larger spaces.
* Rent growth is uneven with newer or fully renovated properties commanding significantly higher rents.
* Negative absorption is more likely to be a temporary blip than a persistent challenge.
Colliers said the new availabilities contributed liquidity in an environment marked by low quality availability, exemplified by the quick turnover of three former Big Lots spaces to local or non-discounter users.
It also said that after two years of steady rent growth, the market saw asking prices dip slightly, indicative more of inventory quality rather than demand.
Rents are significantly higher in properties which have seen refurbishment or renovation, marking opportunities for value-add investors willing to trade a challenging construction environment for significant income growth, according to Colliers.
Colliers said the market’s growing wealth levels and population continue to attract new entrants, including the first South Carolina market entry of Irish clothing retailer Primark and Rural King’s expansion into Spartanburg.
Colliers also said:
* Looking beyond tracked submarkets, new construction is likely to impact the market in the next two years on the traditionally rural eastern side of I-85 as the Woodruff and Moore areas are some of the state’s fastest-growing areas.
* Investment sales volume was at its lowest level since 2023 as the market continues to settle towards pre-pandemic volumes after a multi-year spike from 2021-2023.
* With healthy gains in value and high interest rates over the past several years, strip center buyers largely are seeking mark-to-market opportunities while single-tenant properties comprise the bulk of deal flow, largely in deals under $5M.
* Redevelopment remains a factor for some properties, particularly in the downtown Greenville area, as land values continue to spike.
* Net absorption fell to negative levels with the closure of several national retailers, reaching -57,722 square feet and pushing vacancy up to 3.64 percent.
* Asking rents for shop space also fell slightly to $20.43 as available shop space inventory is largely in lower-quality spaces. Construction in tracked markets remains low at 3.64 percent.
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