A comparison between Spartanburg and Greenville, South Carolina’s Industrial Real Estate Markets.
If you are familiar with the Upstate of South Carolina, I’ll state something pretty obvious: Spartanburg and Greenville are growing together.
The 35+/- miles that separates downtown Spartanburg to downtown Greenville are filled with growing towns and new developments that are making Spartanburg and Greenville seem more connected than ever before.
As I briefly discussed in my last blog, The Value Creator, Greer, S.C. has become a gem that is conveniently located between Spartanburg and Greenville.
Surrounding areas like Duncan, Wellford, and Woodruff have become hotspots for those who would like to commute between Spartanburg and Greenville.
These factors and the overall recent growth of the Upstate raises an interesting question:
Is there a significant difference between the Spartanburg and Greenville industrial real estate markets now, and will there be in the future?
Let’s dive into the data!
Spartanburg Vs Greenville, South Carolina’s Industrial Real Estate Markets.
We will begin by discussing the industrial real estate inventory in Spartanburg and Greenville.
Greenville has a larger inventory of industrial square footage than Spartanburg.
As of Q4 2022 (quarter to date), there is 103,788,514 square feet of industrial property in Spartanburg and 137, 181,571 square feet in Greenville.
Spartanburg is not going to be the inventory underdog for much longer!
Spartanburg has exceeded Greenville in square feet under construction since 2021.
The 2022 Q4 (quarter to date) square feet of industrial real estate under construction in Greenville is 6,846,169.
The square feet of industrial real estate under construction in Spartanburg is currently 16,031,977.
It is projected in the next five years Spartanburg will match Greenville in square feet of industrial inventory.
The current vacancy rates in the Upstate are well below the national average industrial vacancy rate which is slightly less than 5%.
Spartanburg’s industrial vacancy rate is 3.3% while Greenville’s industrial vacancy rate is 2.6%.
Industrial asking rents in Greenville are slightly above the average Spartanburg industrial asking rent.
The 2022 Q4 (quarter to date) average industrial asking rent in Greenville is $6.06/ square foot while the average in Spartanburg is $5.76/ square foot.
With the national average industrial price per square foot at around $11, it is no surprise that the Upstate is an economical option for many companies to reside.
Cap rates: Two key words for every investor!
The 2022 Q4 (quarter to date) industrial average cap rate is 7.3% in Spartanburg and 7.5% in Greenville.
These returns are higher than the national average industrial cap rate of just over 6%.
Historically, the average asking price per square foot difference is not substantial between the Spartanburg and Greenville.
The asking price per square foot difference between the two markets is projected to follow a similar trend in the future.
The 2022 Q4 (quarter to date) asking price per square foot in Spartanburg is $64 and is $61 in Greenville.
While Greenville is leading in many categories, Spartanburg is becoming an increasingly comparable alternative.
Spartanburg is a land use county (no zoning) which releases many barriers that businesses and developers face in zoned counties such as Greenville. Land is also less expensive in Spartanburg.
Since the pandemic, transportation costs have become a larger factor to consider is the distribution of goods and is a larger cost than warehousing.
As traffic becomes more congested in Greenville, Spartanburg will be a more efficient alternative to consider.
Data Source: Costar
If you’d like to discuss this blog or anything related to commercial real estate, let’s connect!
Emma McDaniel, Vice President