Columbia, SC – A Spec-tacular Boom
Industrial Expansion in the Palmetto State
For more than two decades, spec buildings have intermittently appeared throughout South Carolina. However, the current pace is unparalleled and the growing chain, Pet Supplies Plus, is one of the driving forces behind this industrial boom.
The chain required a new distribution center to serve the Southeast and Atlantic Coast region. According to Miles Tedder, chief marketing officer and chief supply chain officer with the company, time was of the essence. In response, Orangeburg County approved a 534,700-square-foot industrial building and construction began in 2022. What started as a $30 million privately-funded investment, resulted in a $54 million commitment from Pet Supplies Plus, and the creation of roughly 250-275 jobs. As planned, operations began in the first half of 2023.
Influences and Impact
The demand for industrial real estate has been high and persistent in the Midlands. Governments and developers are designing and building industrial facilities before tenants are even identified. Developers are even taking more risks given the market demand, pre-leasing numerous projects months before construction concludes.
This voracious demand for industrial properties is not just in the Midlands but is a nationwide trend. A 2024 survey by trade publication Area Development reported that nearly 85% of respondents said that available buildings were an “important” or “very important” factor when choosing a location.
South Carolina on the Upswing
Going back to 2022, commercial real estate firm, Colliers, reported record spec construction in the Midlands. Tenants have continued to snap up products, often before buildings could even be completed.
Chuck Salley, managing director with Colliers in Columbia, described the Midlands spec boom, stating, “We delivered about 2 million square feet in late 2022 and 2023”. At the end of 2023, only 200,000 square feet were still available, with an additional 1.3 million under construction for 2024.
Various private developers have spec projects in progress throughout the Midlands, reinforcing the growth and demand for industrial properties in the area.
Reaping the Benefits, Taking the Risks
While there are plenty of success stories, there is a significant risk involved with building spec properties. A significantly sized industrial building is a considerable investment that won’t yield any profit until it’s leased or sold.
When governmental bodies develop spec buildings, there’s a political risk in addition to financial risk. Despite these challenges and risks, spec buildings provide an essential inventory for economic development. These buildings can aid companies in launching their operations far faster than if they had to start building from scratch, making areas with readily available properties more appealing.
Future Prospects
The demand for spec industrial buildings shows no sign of slowing down. In the Midlands, Clarendon County completed a 50,000-square-foot spec building in 2024, which was snapped up by Wisconsin-based metal fabrication firm, Latitude Corp.
Real estate data provider CoStar reports that as of the end of year 2024 in West Columbia alone, 1.3 million square feet of spec and build-to-suit projects were under construction.
All these trends indicate that the Midlands are still in for considerable industrial growth as developers and organizations take advantage of the ongoing demand for readily available industrial properties.
