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.