By Matthew Clark
Published Feb. 8, 2016
Recent reports from Colliers International and NAI Earle Furman suggested the retail market in the Upstate saw a strong quarter and closed out 2015 with lower vacancy rates and higher asking rates.
The lowest vacancy rate in the market was in the Woodruff Road submarket, where Colliers said the vacancy was 2.9% with less than 40,000 square feet of retail space available for lease. With the exception of downtown Greenville, the Woodruff Road-Butler Road submarket commanded the highest average rental rate of any other market in the Upstate at $14.74 per square foot. Downtown Greenville had an average rental rate of $18.97, according to NAI Earle Furman.
“Retailers are competing for quality space, and consequently, many are preleasing space in new developments at rental rates never before seen in the market,” the Colliers report said.
Both reports indicated that grocery store construction and development were on the rise across the Upstate. In the fourth quarter, Lowes Foods broke ground on a second Upstate location, this one in Greer, which is scheduled to be complete by the third quarter. Additionally, two Aldi locations opened in October, and Harris Teeter is constructing a two-story, 53,000-square-foot store on Augusta Street inside Lewis Plaza.
Wal-Mart built a Neighborhood Market in Spartanburg in 2015 with construction nearing completion of another market location in Simpsonville. The Wal-Mart expansion came at the same time the company closed two of their smaller Express stores in the Upstate, one in Gray Court and another in Pacolet.
The 9-acre NorthPointe mixed-use development was, according to NAI Earle Furman, the largest new development announcement in the region for the fourth quarter. The development is located at the intersection of Wade Hampton Boulevard, Church Street and East Stone Avenue. The development is scheduled to have a Harris Teeter store similar to the one on Augusta Street, along with retail shop space beneath 285 apartment units.
Restaurants also had a strong showing in the market, with new construction and leasing in mixed-use space on the rise, according to Colliers. The market had new announcements from Caviar and Bananas near the Aloft Hotel; Two Chefs Cafe & Market anchoring Main & Stone; Toss Pizza Pub at the South Ridge development at Church Street and University Ridge, Sidewall Pizza Co. at 99 Cleveland St., Roots Smokehouse at The Village of West Greenville, The Commons at Welborn Street in Greenville’s west side, and Bex Cafe & Juice Bar at 820 S. Main St.
The Magnolia Park redevelopment on Woodruff Road, completed in 2014, picked up Tin Lizzy’s Cantina, which will locate in a 5,000-square-foot area of the development, and Tucanos Brazilian Grill, which will open near the Regal Cinemas. Grimaldi’s opened its second location in South Carolina at Magnolia Park in 2015. The Cheesecake Factory recently announced it was opening its first location in the state at the Haywood Mall.
According to NAI Earle Furman, the vacancy rate across Greenville was 5.8%, while Spartanburg’s average was 6.3% and Anderson’s was 6%. Simpsonville had the lowest vacancy rate at 3%. Woodruff Road-Butler Road had a vacancy rate of 3.5%, while Highway 81 at Clemson Boulevard was at 3.7%. Colliers reported the overall retail market vacancy rate trend as dropping from 12.1% for the Greenville-Spartanburg market in fourth-quarter 2014 to 11.8% in fourth-quarter 2015.
Greenville County had gross retail sales of $1.3 billion for the year, which was up 2% over October 2014 and up 18.2% over October 2012, according to the S.C. Department of Revenue. The city of Greer registered total gross retail sales of $1 billion for fiscal 2015. Retail sales for the entire Greenville-Anderson-Mauldin metropolitan area was $2 billion, up 5.7% from 2013 and 11.3% from 2012.
Both reports suggested the outlook for the Upstate retail market was strong leading into 2016. NAI Earle Furman reported the first quarter and beyond “continues to look positive.”
“All signs currently indicate the Upstate will remain in a growth mode for the foreseeable future,” the NAI Earle Furman report said.
Colliers had a similar outlook to 2016 suggesting the Greenville-Spartanburg market “is likely to welcome continued development and activity in 2016 with new retailers entering the market.” Grocers and “fast-casual” restaurants will continue to expand into the market.
“The market’s vacancy rate will further decline as space continues to be absorbed and new developments deliver near full occupancy,” the Colliers report said. “Rental rates will trend up as competition for space tightens and construction costs for new development increases.”
Reach Matthew Clark at 864-235-5677, ext. 107, or @matthewclark76 on Twitter.