INDUSTRIAL MARKET REPORT
Q1 CONSTRUCTION & DELIVERIES
Q1 TRENDS & HIGHLIGHTS
• CHARLESTON’S INDUSTRIAL MARKET STILL STRONG DESPITE NATIONAL CHANGES IN INTEREST RATES AND CONSUMER DEMAND.
• VACANCY RATES REMAIN LOW AND RENTS CONTINUE TO INCREASE.
• 2023 IS ON PACE FOR RECORD SETTING AMOUNT OF NEW DELIVERIES WITH DEVELOPERS.
• SOUTH CAROLINA CONTINUES TO BE AN AUTOMOTIVE POWERHOUSE WITH NEW MEGA-PROJECT ANNOUNCEMENTS AND LARGE EXPANSIONS BY MANUFACTURERS AND SUPPLIERS.
• THE FEDERAL RESERVE’S FOCUS ON RAISING INTEREST RATES TO CURB INFLATION ARE IMPACTING BUSINESS DECISIONS FOR REAL ESTATE.
Q1 SUBMARKET SUMMARY
Bridge tracks buildings 10,000 SF and greater.
Bridge uses only internal research within its Charleston office for its market research.
*Other includes Ridgeville, St. George and other outlying rural areas within +/-50 miles of I-26/526.
**Total market statistics do not include specialty or specialty manufacturing buildings (22.3 Million SF).
2023 ON RECORD-SETTING PACE FOR INDUSTRIAL DELIVERIES
Q1 RECAP
•Charleston’s industrial market remains very strong thanks to continued population growth, strong port volumes, and continued manufacturing growth. Some headwinds we are tracking include the recent run up in interest rates, the settling of COVID-related shipping challenges, and the cooling of consumer demand for retail goods.
•Demand for industrial development is still strong with various regional and national developers still seeking land opportunities throughout the region. Those opportunities have become very limited within the tri-county area (Charleston, Berkeley and Dorchester) and the developers are taking land positions in neighboring counties such as Orangeburg and Colleton.
•Development planning was interrupted by the rapid run-up in interest rates and the tighter lending standards affecting underwriting. In a few cases, deals fell out of contract as owners were not willing to lower their pricing.
•Industrial deliveries for the remainder of 2023 puts the region on a record setting delivery pace. Tenants will have more choices in building type, size and location. Available facilities will be located in North Charleston to St. George and Orangeburg.
•Vacancy rates have been extremely low at 1% for the past six quarters and have fluctuated only slightly.
•Leasing activity has remained strong with tenant interest from third-party logistics companies. The nature of the services provided has changed with more of these companies servicing manufacturers as opposed to dealing with consumer goods.
•Rental rates across every property type have increased and show no sign of decreasing. The most demand appears to be in the 50,000 – 250,000 SF range.
AUTOMOTIVE POWERHOUSE
•South Carolina is developing a reputation as an automotive powerhouse.
•The state is home to six passenger vehicle OEM’s and over 500 automotive related companies. New companies include EV plants, battery development plants and recycling companies.
•Hiring skilled labor is challenging. South Carolina’s Ready SC Program is nationally recognized as a leading training program to help solve that issue.
SOUTH CAROLINA PORTS AUTHORITY
•Growth of monthly port imports have leveled off. Current numbers would have been considered normal before the pandemic.
•West Coast cargo slowdown driven by protracted labor negotiations continues to cause shippers to divert cargo to the East and Gulf Coast.
•California regulations prohibiting truck activity and industrial development contributes to this trend.
COLD STORAGE GROWTH CONTINUES
•The cold storage market in Charleston is experiencing a transformation from historically all freezer product to a more diverse product base service fresh and frozen products.
•Modern facilities are using innovative state of the art cooling systems to accommodate the fresh product. Other features of newer developments include taller clear heights, automated racking systems, and convertible chambers to adjust temperatures. Please find below a few examples of ongoing cold storage development in the market:
INDUSTRIAL OPPORTUNITIES
INDUSTRIAL ADVISORS
HAGOOD MORRISON, SIOR, MBA, CRE Executive Vice President hagood.morrison@bridge-commercial.com
PETER FENNELLY, MCR, SIOR, SLCR President peter.fennelly@bridge-commercial.com
NEED PORT 95 St. George ±1,219,772 SF Available (3 Buildings)
SIMONS JOHNSON, SIOR, MCR, CCIM Executive Vice President simons.johnson@bridge-commercial.com
JOHN BEAM, SIOR Vice President john.beam@bridge-commercial.com
WILL CROWELL, SIOR Associate Vice President will.crowell@bridge-commercial.com
INVESTMENT ADVISOR
HAGOOD S. MORRISON, II, SIOR Senior Vice President hs.morrison@bridge-commercial.com
MEREDITH MILLENDER Vice President of Property Management meredith.millender@bridge-commercial.com
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PROPERTY MANAGEMENT EXPERTISE?
BRIDGE OFFERS PROPERTY MANAGEMENT, ACCOUNTING & PROJECT MANAGEMENT SERVICES CHARLESTON LOGISTICS CENTER Summerville/Jedburg ±228,784 SF Available
BRIDGE COMMERCIAL 25 Calhoun Street, Suite 220 Charleston, SC 29401 +1 843 535 8600 info@bridge-commercial.com
Bridge Commercial uses only internal research within its Charleston office for its market data.
Bridge Commercial makes no guarantees, representations or warranties of any kind, expressed or implied, including warranties of content, accuracy and reliability. Any interested party should do their own research as to the accuracy of the information. Bridge Commercial excludes warranties arising out of this document and excludes all liability for loss and damages arising out of this document.