COLUMBIA REGIONAL BUSINESS REPORT – OCTOBER 23, 2009

Columbia’s 1.8 million-square-foot medical office market is holding up better than the area’s general office market during the recession, according to Avant Healthcare, a division of NAI Avant commercial real estate company.

The medical office space occupancy rate rose to almost 87% in mid 2009, the highest level recorded since late 2006. An estimated 70,000 square feet has been absorbed since this year began. Continued growth is expected in the coming years.

Estimates by Avant Healthcare suggest that nearly 38,000 people should be employed in healthcare-related fields by 2013, an increase of nearly 7,000.

At mid-year 2009, there was 2.6 million square feet of medical office space in either single or multitenant buildings (excluding hospital bed towers). Given the projected employment growth, there should be an estimated net new demand for approximately 620,000 square feet of medical office space by 2013, Avant Healthcare said.

At a national level, the ambulatory health services sector, encompassing offices of physicians, outpatient care services, and home health care services, has experienced record job creation.

The strength of this real estate sector will be driven, in part, by the age shifts in the population and should be one of the leading economic sectors for sustained job growth coming out of the recession.

Most outpatient services and physicians offices are located within two miles of one of the four hospitals in Richland and Lexington counties. Over time, Avant Healthcare anticipates this geographic concentration will dissipate, with small medical clusters developing in the Irmo, Northeast Richland, Lexington, and Lugoff/Elgin submarkets, the company said.

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