INDUSTRIAL MARKET REPORT
Q3 MARKET SNAPSHOT
MARKET
OVERALL INVENTORY* 77.2 MILLION SF
(100,000 SF+)
INVENTORY* 54.4 MILLION SF
Q3 CONSTRUCTION & DELIVERIES
4.8 MILLION SF YTD DELIVERIES
6.1 MILLION SF
* 77.2 Million SF does not include 22.8 Million SF of specialized buildings.
Q3 TRENDS & HIGHLIGHTS
• VACANCY RATES INCREASE DUE TO THE LARGE AMOUNT OF PRODUCT DELIVERED TO THE MARKET.
• AS WAREHOUSES REBUILD INVENTORY LEVELS, SUBLEASE SPACE IS DECREASING.
• INVESTMENT SALES ARE ON THE RISE.
• MORE AUTO SUPPLIERS ARE TESTING THE WATERS IN THE REGION.
• PORT ANNOUNCES EXPANSION PLANS FOR THE LEATHERMAN AND NORTH CHARLESTON TERMINALS.
• THE ILA STRIKE CAUSES TEMPORARY INTERRUPTION, HOWEVER, A PARTIAL AGREEMENT POSTPONES THE STRIKE.
ACTIVITY & REQUIREMENTS
INCREASE IN Q3
Q3 RECAP
• Charleston’s industrial market has seen significant deliveries in 2024, lending to the increase in vacancy rates. However, the market is at an inflection point with a few remaining deliveries.
• Elevated supply is flattening rent growth, particularly in the Summerville and Ridgeville submarkets.
• Sublease space decreases as certain operators have secured new business.
• No new supply is expected to go under construction in the near future. Developers have several land positions, however, we do not expect actions on those positions given that the debt markets are not there for speculative development.
• The pause in new construction will set the stage for tighter capacity and higher pricing for warehouse space in 2025.
• Google data centers continue to grow in Charleston with expansion at its existing location and the announcement of its new location in Dorchester County.
• Two new investment sales went to market and are under contract. These include the sale of the Volvo 1MSF facility and the Amazon facility consisting of 157,000 SF.
PORT PLANS TO EXPAND CAPACITY
• The planned addition to the Leatherman Terminal will triple the existing 3 million TEU capacity of the Leatherman and North Charleston Terminals to 10 million TEU container capacity by 2040.
• The Leatherman Terminal will feed freight into the Navy Base Intermodal Facility, the adjacent near-dock rail facility connected to Leatherman via a service road. Anticipated to open in July 2025, the Navy Base facility will feed intermodal volumes directly into SC Ports’ inland ports of Greer and Dillon.
• If the ILA contract isn’t fully agreed to soon, many predict a surge of cargo to the U.S. ahead of the next potential labor disruption. This surge could be increased by BCO’s and shippers reacting to the threat of additional tarriffs.
