SOUTHEAST SNAPSHOT, FEBRUARY 2007

Columbia, South Carolina Multifamily Market

With an MSA population of more than 700,000, one of the largest military facilities in the country, the University of South Carolina, the state capital and a growing labor force, Columbia, South Carolina, is not as subject to the peaks and valleys of fickle economics. There is growth and development in Columbia in about any area including the multifamily sector. The overall Columbia apartment market occupancy rates increased from 91.9 percent in October 2005 to 92.3 percent in October 2006 with several submarkets fairing even better. In that same time span, rental rates have increased from $647 to $699.

The east submarket is the most active in terms of development with 1,012 units under construction, and it carries a vacancy rate of 7.9 percent. This submarket was home to Columbia’s first regional mall and was the first submarket in which large residential tract communities were developed. The availability of once rural land has allowed residential and retail development to extend away from the city along Interstates 20 and 77.

The south submarket is coming into its own as evidenced by CIP Construction’s new 300-unit community called Deer Meadow Village, the first significant multifamily development in this submarket in several years. This area, until recently, has been viewed as somewhat rural in character. However, single family, multifamily and retail developers have realized that this area, with its relatively direct access to the city and land prices that in some instances are 30 percent less than other submarkets, is well worth consideration. The south submarket is also home to most of the student-oriented apartment communities, which are located in former industrial areas inside the I-77 portion of the beltway.

The Lexington submarket continues to have the lowest vacancy rates of any submarket at 4.6 percent. Apartments in Lexington average 1,078 square feet, which is 12 percent larger than the average Columbia unit.

Finally, the St. Andrews submarket is the largest in the city with 11,324 units, more than 41 percent of the units in Columbia. However, many of these units were built in the 1970s, and while some them look as good as the day they opened, others are not up to standard, creating an opportunity for developers to build new multifamily communities in their place. Even though some of the apartments are outdated, this submarket still carries 7.9 percent vacancy rate, which is average for the Columbia multifamily market.

The Columbia market has a lot to offer multifamily developers as its home to a wide variety of public and private sectors. As with most state capitals, Columbia can avoid economic downturns and remain stable.  

— Mac Fanning is a broker in CB Richard Ellis’ Columbia, South Carolina, office.


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