The Local Economy
Although commercial real estate transaction volume has been declining across the United States, the Upstate is still doing well in activity.
Retail
Spartanburg's retail transaction volume in 2022 was $177 million dollars. This is a sizeable increase from the $113 million in transaction volume in 2021.
In 2022, retail cap rates in Spartanburg were an average of 8.2%. This is a small decline from the 2021 average retail cap rate of 8.3%. The 2023 Q1 QTD cap rate remains at 8.2%.
In 2022, annual retail rent growth in Spartanburg was 5.6 % which is higher than the 2021 annual rent growth of 4.4%. 2023 Q1 QTD annual rent growth has declined slightly to 5.1%.
While retail cap rates have remained relatively stable, the annual retail rent growth peaked in 2022 before a small decline in this first quarter.
Industrial
Spartanburg's industrial transaction volume in 2022 was $392 million, which is far less than the $702 million in industrial transaction volume in 2021 but still larger than the $253 million in 2020.
Even with the slow down in transaction volume since 2021, 2022 industrial annual rent growth in Spartanburg was 13%. The 2023 Q1 QTD annual industrial rent growth is 11.8%. This rent growth is exceeding the 2021 growth which was 10.7%.
Although industrial transaction volume slowed in 2022, rent growth and cap rates are remaining strong. The 2023 QTD Q1 industrial market cap rate is 7.2% which is the same as the average industrial cap rate in 2022.
With the recent economic shifts, such as inflation and rising interest rates, we expect for the commercial real estate market to respond accordingly. However, there is still plenty of activity in our market.
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