Report: Greenville market has oversupply of industrial real estate

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A recent report shows the Greenville-Spartanburg-Anderson market has an excess of industrial real estate on its hands — and it might take a while before it corrects itself.

CBRE recently published its Q1 industrial real estate snapshot of the Upstate, which revealed that the region has 20 projects totaling 8.9 million square feet under construction. The vast majority of those projects — 18, totaling 7.1 million square feet — are speculative construction.

That means 80% of the projects currently under construction are spec builds.

“The Greenville-Spartanburg market is currently oversupplied,” the report states.

The market is experiencing a decrease in new construction deliveries compared to last year, as many projects started in 2021 were completed and delivered in 2022 and 2023, the report states.

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The decrease in deliveries, coupled with coupled with sublease space increases, are causing developers to be cautious this year, according to the report.

In fact, the direct vacancy rate (8.9%) and overall availability rate (12.5%) have not been this high in the region since Q4 2020. “However, the market absorbed the newly delivered space within two years and that trend will likely repeat itself over the next two years,” the report states.

Of the 8.9 million square feet under construction, only 1.8 million square feet is build-to-suit, according to the report.

There is a silver lining. CBRE’s future outlook predicts the market “anticipates increased leasing activity and positive absorption in 2024 due to strong market fundamentals,” citing Inland Ports Greer and Dillon’s 8% rise in rail moves in March, and a 22% annual increase at Inland Port Greer.