Q3 2023 Charleston Office Market Report | Bridge Commercial

Q3 2023 | CHARLESTON, SC

CHARLESTON OFFICE MARKET REPORT

Q3 MARKET SNAPSHOT

Q3 HIGHLIGHTS & TRENDS

15,433,654 SF Inventory

• CHARLESTON’S OFFICE MARKET REMAINS HEALTHY RELATIVE TO LARGER MARKETS.

12.6%

• NEW SUBLEASE SPACES ARE CREATING OPPORTUNITIES FOR CLASS A, TURN-KEY SPACES.

Vacancy

$30.15 SF

Asking Rents

425,000 SF Construction

304,292 SF

YTD Deliveries

• ACTIVITY FROM CO-WORKING FIRMS ON THE RISE. • THE MAJORITY OF NEW CONSTRUCTION IS TAKING PLACE IN SUMMERVILLE’S NEXTON. • OFFICE PURCHASE INTEREST REMAINS HIGH, PARTICULARLY IN THE SUB-10,000 SF CATEGORY THOUGH INTEREST RATES AND TIGHTER LENDING ARE HOLDING BACK TRANSACTIONS.

WWW.BRIDGE-COMMERCIAL.COM

Q3 2023 charleston OFFICE MARKET REPORT

SUBMARKET SUMMARY UNDER CONSTRUCTION PROPOSED CONSTRUCTION

78 52

UPPER NORTH CHARLESTON 13.3% Vacant $23.50 FS

17A

MOUNT PLEASANT

26

DANIEL ISLAND

7.1% Vacant $29.79 FS

31.3% Vacant $30.70 FS

SUMMERVILLE 2.7% Vacant $26.27 FS

526

LOWER NORTH CHARLESTON

17

10.5% Vacant $25.36 FS

WEST ASHLEY

17

DOWNTOWN 12.4% Vacant $39.04 FS

5.8% Vacant $25.35 FS

SUBMARKET

TOTAL INVENTORY SF

DIRECT VACANT SF

SUBLEASE VACANT SF

TOTAL VACANT SF

WEIGHTED ASKING RENT

UNDER VACANCY CONSTRUCTION RATE SF

Downtown/Class A

2,268,459

293,255

54,123

347,378

$41.40

15.3%

-

276,292

TOTAL DOWNTOWN

3,554,513

387,803

54,123

441,926

$39.04

12.4%

-

276,292

Daniel Island

1,878,736

221,791

365,898

587,689

$30.70

31.3%

-

-

Lower North Charleston

3,098,108

281,691

43,796

325,487

$25.36

10.5%

186,000

-

Upper North Charleston

2,499,810

318,102

15,000

333,102

$23.50

13.3%

-

-

Mount Pleasant

2,235,676

137,289

21,146

158,435

$29.79

7.1%

-

-

Summerville

1,007,027

27,209

-

27,209

$26.27

2.7%

223,500

28,000

West Ashley

1,159,784

50,259

17,523

67,782

$25.35

5.8%

15,500

-

TOTAL SUBURBAN

11,879,141

1,036,041

463,363

1,499,704

$27.00

12.6%

425,000

28,000

TOTAL MARKET

15,433,654

1,424,144

517,486 1,941,630

$30.15

12.6%

425,000

304,292

Bridge tracks buildings 10,000 SF and greater, excluding medical office and user-owned buildings.

Bridge uses only internal research within its Charleston office for its market research.

PG. 2

YTD DELIVERIES SF

Source: Bridge Commercial WWW.BRIDGE-COMMERCIAL.COM

Q3 2023 charleston OFFICE MARKET REPORT

SUBLEASE OPPORTUNITIES ON THE RISE IN CHARLESTON

NEW SUBLEASE OPPORTUNITIES

Q3 RECAP • Vacancy rates have increased slightly in Q3 due to new projects being delivered. Located at 1080 Morrison Drive, The Morris, a Class A office development in downtown, delivered approximately 105,000 SF to the market.

• Landlords are offering strong TI or spec office delivery with a desirable mix of private and open office design are winning attention of businesses seeking to upgrade office space to build their brand and compete for talent.

• Sublease space increased with concentrations in the Daniel Island and Upper Downtown markets led by 223,800 SF at Benefitfocus’ office on Daniel Island and 11,409 SF at Pacific Box and Crate.

40 CALHOUN STREET | DOWNTOWN 8,149 RSF

• The two largest leases of 2023 so far came from local government agency Charleston County, which leased 40,000 SF at 4340 Corporate Road in North Charleston in Q2 and HCA South Atlantic which leased 38,815 SF at Marshside on Daniel Island in Q3.

• Co-working firms, Industrious and Serendipity Labs, have been successful in leasing their new locations that delivered within the past 12 months.

NEW CONSTRUCTION

229 HUGER STREET | DOWNTOWN 3,767 RSF

• Approximately 450,000 SF of office space is currently in the pipeline.

• The continued build-out of the mixed-use Nexton development in suburban Summerville accounts for a large portion of the pipeline. Both Dayfield Park, a 115,000 SF office and retail development and Atelier, a 175,000 SF office development, are under construction and anticipated to deliver Q2 2024.

• Many projects throughout Charleston, such as The Navy Yard, has involved major renovations and conversions of previously existing buildings.

FABER PLAZA | NORTH CHARLESTON 3,453 RSF

SALES • Due to rising interest rates, sales volume has declined.

• Approximately $120 million has closed over the past 12 months, compared to roughly $450 million that closed in 2021.

• A large portion of sales this year have been from medical office sales and sales below 10,000 SF. WESTEDGE | DOWNTOWN 4,500 RSF BRIDGE-COMMERCIAL.COM

PG. 3

Faber Pointe

Q3 2023 charleston OFFICE MARKET REPORT

OFFICE SPACE FOR LEASE 4105 FABER PLACE DRIVE, NORTH CHARLESTON, SC 29405

OFFICE OPPORTUNITIES Developed, Leased and Managed by Holder Properties

THE HUB @NEXTON BUILDING 2 ATELIER Summerville Summerville 36,000 SF Available (Phase I) 50,000 SF Available

FABER POINTE North Charleston 12,579 SF Available

FABER CROSSING North Charleston 10,000 SF Available OFFICE SPACE FOR LEASE

MARK MATTISON SIOR, CCIM

2,032 RSF - 34,816 RSF CLASS A OFFICE

Executive Vice President +1 843 437 1545 mark.mattison@bridge-commercial.com

$28.00 RSF FULL SERVICE

COLBY FARMER

Associate +1 978 998 9243 colby.farmer@bridge-commercial.com

LOCATED IN HIGHLY SOUGHT-AFTER EXECUTIVE PARK AT FABER PLACE

MICHAEL KELLY

Associate +1 843 568 2970 michael.kelly@bridge-commercial.com

WWW.BRIDGE-COMMERCIAL.COM

40 CALHOUN Downtown 8,200 SF Available

DAYFIELD PARK @ NEXTON Summerville 34,000 SF Available (Phase I)

THE LANDING Daniel Island 24,740 SF Available

134 MEETING STREET Downtown 4,500 SF Available

OFFICE ADVISORS MARK A. MATTISON, CCIM, SIOR Executive Vice President mark.mattison@bridge-commercial.com

SIGN UP FOR MARKET REPORTS AT

PETER FENNELLY, MCR, SIOR, SLCR President peter.fennelly@bridge-commercial.com

www.bridge-commercial.com

COLBY FARMER Senior Associate colby.farmer@bridge-commercial.com

NEED PROPERTY MANAGEMENT EXPERTISE?

MICHAEL KELLY Brokerage Associate michael.kelly@bridge-commercial.com DANIEL PELLEGRINO Senior Vice President daniel.pellegrino@bridge-commercial.com

INVESTMENT SALES HAGOOD S. MORRISON, II, SIOR Senior Vice President hs.morrison@bridge-commercial.com

PROPERTY MANAGEMENT MEREDITH MILLENDER Vice President of Property Management meredith.millender@bridge-commercial.com

BRIDGE OFFERS PROPERTY MANAGEMENT, ACCOUNTING & PROJECT MANAGEMENT SERVICES

BRIDGE COMMERCIAL 25 Calhoun Street, Suite 220 Charleston, SC 29401 Tel +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.