Office Vacancy Story Reversed In Some Smaller Southeastern Markets

There’s been no shortage of news over the past 30 months about office vacancies. In large gateway cities, office occupancies fell dramatically during the pandemic as staffs found they could work from home. Moreover, occupancies have remained stubbornly low, as employers and staff faced off over remote work.

Though the weeks since Labor Day have seen a number of firms’ employees return to in-office mode, many corporate tenants in the nation’s biggest office markets are downsizing to considerably less space.

But let’s pause before assuming the well-reported empty office is the ubiquitous norm. In an assortment of cities in the Southeast U.S., the opposite trend has taken hold. Developers and communities in Alabama and South Carolina, for instance, have noted growing tenant interest in office space, particularly in high-end office buildings.

No vacancies

The Jasper, a luxury 12-story, mixed-use structure in the historic downtown district of Charleston, S.C., features 75,000 square feet of AAA office space, as well as 25,000 square feet of first-floor retail space and 219 luxury multifamily units. All spaces in The Beach Company building, which touts its riverside geography, are currently filled.

The Range, situated within a designated Opportunity Zone in the western end of downtown Huntsville, Ala., not far from acclaimed restaurants, museums and parks, is a commercial office development offering three floors and 49,000 square feet of Class A commercial office space. Walking a fine line between big-city office environments and those with a small-town vibe, The Range offers pedestrian-friendly access to a variety of the Rocket City’s most popular dining, retail and entertainment options. That may be why it recently welcomed two new corporate tenants, Eyecare Partners and Bridgeworth Financial Services.

“People are leaving western and northeastern markets for small and mid-sized Southern cities like Huntsville,” says J.C. Darby, development manager at The Beach Company. “In the past decade Huntsville has become Alabama’s No. 1 city with the addition of thousands of jobs and billions of dollars in investment from companies like Mazda, Toyota, The Boeing Company and Remington, all things The Beach Company looks for when scouting development sites.

“The Range is equidistant to the Interstate and all of Huntsville’s economic drivers, including the medical district, Cummings Research Park, NASA’s Space Flight Center and Redstone Arsenal. And we are predicting occupancy growth as a result of this, its walkability and the structure’s distinctive modern design.”

Near job hubs

Meanwhile, demand for office space sparked the development of two new office buildings in Nexton, a master-planned Summerville, S.C. community situated near the region’s top employers, including Volvo and Boeing. One, Atelier Downtown Nexton, offers two-story buildings featuring 2,500 to 18,000-square-foot spaces in a campus like setting where office structures are connected by walking trails.

Developed by Sharbell Development Corp. of New Jersey, the development is the latest within the live-work-play milieu of Downtown Nexton. “The Southeastern U.S. has appealed to Sharbell for years, especially South Carolina, due to its population and job growth, as well as its burgeoning diversity,” says the company’s Thomas Troy.

“Many companies are relocating to the South in search of lower costs and higher quality of life for employees, and our developments reflect that shift.”

Not to be outdone, Workplace at Nexton, a Class A office park within the community, offers 3,000 to 20,000-square-foot spaces, and connectivity to Nexton’s residential side. Residents can walk to Nexton Square’s shopping, hotel and other commercial businesses. Workplace at Nexton’s office spaces had all been claimed before construction was completed, and there’s been no attrition.

“Garden office space with minimal shared common spaces, private entrances and outdoor parks have become the gold standard for commercial leasing in the Charleston, S.C. region,” says Cassie Cataline, Nexton director of marketing.

“Leasing interest for Workplace at Nexton was so great we are developing additional commercial campuses, such as The Hub, to provide office, retail and medical space to address this demand.”