INDUSTRIAL MARKET REPORT
Q2 MARKET SNAPSHOT
MILLION SF
(100,000 SF+)
MILLION SF
Q2 CONSTRUCTION & DELIVERIES
3.7 MILLION SF
MILLION SF
* 77.2 Million SF does not include 22.8 Million SF of specialized buildings.
Q2 TRENDS & HIGHLIGHTS
• SECOND QUARTER BRINGS LARGE SUPPLY WAVE DELIVERING OVER 5.7 MILLION SQUARE FEET.
• RENTS ARE FLATTENING DUE TO HIGHER VACANCY RATES AND INCREASED COMPETITION AMONG LANDLORDS.
• SUBLEASES OUTPACE NEW LEASES IN THE FIRST HALF OF THE YEAR.
• RIDGEVILLE ACHIEVES CRITICAL MASS TO BECOME A NEW SUBMARKET.
• BRIDGE EXPECTS TO SEE AN INCREASE IN DEMAND THE REMAINDER OF THE YEAR.
• INVESTMENT SALES WERE MINIMAL OVER THE 2ND QUARTER WITH THE ONLY SALE BEING DORCHESTER COMMERCE CENTER.
PLENTY OF POSITIVES FOR CHARLESTON’S INDUSTRIAL MARKET
Q2 RECAP
• Record construction deliveries occurred during the second quarter totaling approximately 5.7 million square feet.
• Demand was at it slowest pace with roughly 200,000 square feet more move-outs than move-ins.
• Vacancy has increased to 12.9% due to slowing industrial absorption and the overhang of significant new construction.
• Rents remain elevated for infill buildings, but is trending downwards for projects in Summerville and Ridgeville.
• Construction has significantly slowed after two years of above average deliveries.
• Limited investment sales occurred in the second quarter due to the slower leasing velocity and a widened gap between bid and ask.
• Charleston’s population growth remains strong, bolstering building supply and population-based uses.
IOS / COLD STORAGE MARKET ACTIVITY
• Outdoor storage leasing activity has picked back up with three new IOS leases signed for Q3 start dates, between 3 - 5 years, lease rates have retracted slightly.
• IOS sales have continued to push the market with trades happening in the $1.1 - $1.3 million.
• Arcadia Cold is coming to Charleston as a new cold facility operator. The company will occupy the Saxum facility upon completion in 2025.
• ACHQ Logistics Cold Storage purchased land and is currently planning a to build an additional cold facility.
• Lineage Logistics, which operates two facilities in Charleston, completed the largest IPO of 2024, raising $4.44 billion at a $18 billion valuation. Lineage operates 482 temperature controlled warehouses across the world.
THE ELECTION YEAR BRINGS UNCERTAINTY
• In 2025, our new President will institute new policies and initiatives that could help or hurt the industrial market through tax policy, energy policies, environmental regulation and other trends based upon regionalized incentives.
• Tax Policies including 1031 exchanges, carried interest, capital gains and inheritance taxes will all be up for consideration in 2025.
• Environmental and energy policies may also change in 2025.
• Programs such as the CHIPS Act, IRA Act and the Infrastructure Act, all created in 2021, are being deployed and will continue to be deployed for the next 3 - 4 years.
CHARLESTON MARKET VACANCY
The second quarter of 2024 saw the largest number of speculative industrial deliveries in the history of the market.
As a result, the overall market vacancy rate doubled during this period. Nearly half of the current market vacancy is attributed to four buildings, totaling 3.76 million square feet, which delivered during the quarter.
OPPORTUNITIES
Summerville/Jedburg
±354,202 SF Available
ADVISORS
PETER FENNELLY, MCR, SIOR, SLCR President peter.fennelly@bridge-commercial.com
SIMONS JOHNSON, SIOR, MCR, CCIM Executive Vice President simons.johnson@bridge-commercial.com
JOHN BEAM, SIOR Vice President john.beam@bridge-commercial.com
HAGOOD MORRISON, SIOR, MBA, CRE Executive Vice President hagood.morrison@bridge-commercial.com WILL CROWELL, SIOR Vice President will.crowell@bridge-commercial.com
HAGOOD S. MORRISON, II, SIOR Executive Vice President hs.morrison@bridge-commercial.com
MILLENDER, CPM Vice President of Property Management meredith.millender@bridge-commercial.com
