Commercial Real Estate

What's New?

The Details of Retail- Spartanburg, S.C.

Currently

• Retail vacancy rates have decreased 1.1% in the past 12 months 
• Retail for lease in Spartanburg is over 80% less expensive than the national average. 
• The average retail price per sq ft for lease is $13.40. This is well below national average of $24.22 sq ft. 
• The current retail vacancy rate in Spartanburg is 3.8%, which is below national average of of 4.2% vacancy. 
• There is currently 34,900 sq ft of retail currently under construction in Spartanburg. 
• Average sales price per sq ft is $120. 
• The average cap rate is 8.3%

Retail- What’s in Store for This Year?

• The projected Q4 2023 vacancy rate is 3.6%. 
• TheQ4 projected average price per square foot for lease is $13.54/ sq ft with 3.0% annual rental growth 
• The Q4 cap rate is projected to increase slightly to 8.7%

Multi Family

Multi Family in Spartanburg, S.C.

• The current inventory of multi family units in Spartanburg is 14,776 with 856 units under construction 
• The current vacay rate is currently 16.5 %, which is well above the national average of 6.8% vacancy
• The average price per unit is $152,000K with a cap rate of 5.3%.  
• Spartanburg apartment rent is less expensive than the national average. 
• The average asking price per unit is $1220 while the national average rent per unit is $1670.  
• Much of Spartanburg’s demand for multi family has been driven by the spill over demand from Greenville, S.C.

Multifamily- What’s in Store for This Year?

• The projected Q4 2023 vacancy rate is 15.9%. The annual rent growth is projected to be 1.6% with the average cap rate rising to 6.4%. 

Other News

BMW

• Construction began in late June on BMW’s Electric Vehicle Battery Plant in Woodruff, South Carolina. BMW will invest $700 million in the facility. The site is on a 315 acre tract that was formerly a peach orchard. 
• The plant will be over one million square feet and will bring 300 employees to Woodruff, S.C.
• The Woodruff plant will bring opportunities for growth and development in commercial real estate in several sectors. 
• In addition to the Woodruff plant, BMW plans to spend $1,000,000,000 on its existing plant for all- eclectic vehicle production. 

Source: Costar 

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Market Data for Spartanburg, SC

What are the current market cap rates in Spartanburg, S.C.?

Source: Costar Data

Let's Talk Industrial Real Estate

Across the State 

There is a lot to say about industrial real estate lately. South Carolina has recently been hit with a wave of new inventory just as demand begins to cool. 

The statewide industrial availability rate is 9.5% with 11.4 million square feet of new industrial inventory and 40 million square feet currently under construction. 

Two areas of heavy new supply are Charleston, S.C. and Greenville/Spartanburg. 

In Spartanburg Specifically 

Since 2018, Spartanburg’s industrial inventory has grown by 25%. The new supply has recently overwhelmed the existing demand. 

Current industrial vacancy rates are 9.8% which is a large contrast from the 3% vacancy rate in early 2022. 

Annual rent growth is currently 10.7% which is higher than historical averages and the average US industrial rent growth. 

There is a large caveat to the rise in industrial vacancy rates. The vacancy rates and demand vary widely depending on the size and class of industrial buildings. 

While the vacancy rates are rising for large industrial buildings, especially in the class A category, there is still a large for smaller industrial buildings. 

Read about the variation in industrial vacancy for different square footages here. 

The volume of industrial sq ft for sublease is at historically high levels which you can read about here. Most of the industrial buildings for sublease are larger, newer builds with leases that have been signed in the past few years. 

Here’s the Data in Spartanburg, S.C.:

• The current industrial vacancy rate in Spartanburg is 9.8%. 
• The average price per square foot for lease is $6.14. 
• The market cap rate is 8.0%. The average industrial sale price per square foot is $66. 

Industrial- What’s in store for this year? 

The Q4 2023 projected vacancy rate is 10.2%. The market price per square foot for lease is projected to reach $6.33/ sq ft by the end of 2023 and the average price for sale is projected to be $64. 

It will take several quarters for the Upstate to properly absorb the supply that has come into the market for large, class A buildings. 

The demand for industrial buildings should persist has there has been far less supply hit the market for the small to mid sized industrial users. 

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Who We Are

McDaniel and Company is a multigenerational commercial real estate company located in Spartanburg, SC and has been in business for 41 years.

We take pride in our ethics and core values that have led to long term business relationships and repeat business.

Our Mission

To conduct real estate transactions using excellent service, professional knowledge, and sound ethics to enrich the lives of our clients and to contribute to the economic growth and development of the Carolinas. 

Our Vision

To be the best commercial real estate brokerage in our market area.

Our Core Values

• Serving Clients’ Best Interest
• Integrity
• Professionalism
• Respecting Public’s Best Interest
• Commitment to Economic Growth

Want to discuss? Connect with us!

446 Oak Grove Road, Spartanburg, SC

McDaniel and Company is one of the Upstate region’s leading commercial, industrial, multi-family, and investment property firms. We deliver on all levels. Our reputation and years of experience are factors you can count on.