Upstate Office, Industrial Vacancy Keep Tightening in Second-Quarter Market Report

GREENVILLE, S.C. — Vacancy rates in the Greenville-Spartanburg office and industrial markets continued to fall in the second quarter of 2026, according to a new report from commercial real estate firm CBRE, as covered by Greenville Business Magazine, with tenants absorbing more space than landlords put on the market in both sectors.

Office vacancy across the region dropped to 9.9%, down 30 basis points from the first quarter and 200 basis points from a year earlier, the report found. Availability — a broader measure that includes space being marketed ahead of a future vacancy — held at 16.2%, also below year-ago levels.

Office Absorption Led by Downtown Buildings

Net office absorption totaled 35,000 square feet in the quarter, an increase of 20,000 square feet compared with the same period in 2025. The gains were concentrated in a handful of buildings, including the Daniel Building, Orchard Ridge Corporate Center and Raintree Office Park, according to the report.

The quarter also marked a milestone for downtown construction: a 100,000-square-foot office building broke ground in the Greenville central business district, the first large-scale office development to start there since 2020, per CBRE’s findings.

Industrial Market Keeps Tightening

The industrial sector posted even stronger numbers. Net absorption reached 2.4 million square feet for the quarter, up 6.3% from the first quarter of 2026, while vacancy fell 80 basis points to 5.3%. Availability tightened to 9.2%, a decline of 240 basis points from a year earlier.

CBRE attributed much of the industrial absorption to tenants moving into existing vacant Class A space rather than new construction, pointing to BMW’s 918,000-square-foot lease in Spartanburg West — which backfilled space formerly occupied by DHL — as a major driver. Limited new vacant space entered the market during the quarter, a dynamic that has helped keep vacancy on a downward trajectory even as construction activity slows.

What It Means for Upstate Businesses

The tightening numbers reflect a broader trend that has defined the Upstate’s commercial market for much of the past two years: steady demand from advanced manufacturing, automotive and logistics tenants, paired with a construction pipeline that has yet to catch up. With office vacancy falling for a fifth consecutive quarter and industrial space in increasingly short supply, brokers say landlords across Anderson, Cherokee, Greenville, Laurens, Oconee, Pickens and Spartanburg counties are likely to keep gaining leverage on lease terms through the second half of 2026.