Q4 2023 | CHARLESTON, SC
CHARLESTON OFFICE MARKET REPORT
Q4 MARKET SNAPSHOT
15,433,654 SF Inventory
13.7%
Vacancy
$30.14 SF
Asking Rents
425,000 SF Construction
304,292 SF
YTD Deliveries
Q4 HIGHLIGHTS & TRENDS • OFFICE ACTIVITY IS STRONG IN THE SUB-10,000 SF RANGE ACROSS ALL SUBMARKETS. • CORPORATE SUBLEASE ARE ABUNDANT AND READILY AVAILABLE IN SPACES GREATER THAN 20,000 SQUARE FEET. • RENTAL RATES HAVE INCREASED DURING 2023 FOR NEW AND CLASS A PROJECTS DUE TO INCREASED IMPROVEMENT COSTS AND LIMITED SUPPLY OF HIGH QUALITY PRODUCT. • BUSINESSES FOCUS ON QUALITY BUILDINGS, NEARBY AMENITIES AND HIGH QUALITY FINISHES TO ENCOURAGE RECRUITMENT AND BACK TO WORK POLICIES. • MEDICAL OFFICE GROWTH WAS SIGNIFICANT PARTICULARLY IN HIGH GROWTH RESIDENTIAL AREAS SUCH AS SUMMERVILLE. • INVESTMENT SALES IN 2023 WERE VERY LIMITED DUE TO THE CHANGE IN INTEREST RATES AND CORRESPONDING CHANGE IN EXIT CAP RATES.
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Q4 2023 charleston OFFICE MARKET REPORT
SUBMARKET SUMMARY UNDER CONSTRUCTION PROPOSED CONSTRUCTION
78 52
UPPER NORTH CHARLESTON 13.4% Vacant $23.64 FS
17A
MOUNT PLEASANT
26
DANIEL ISLAND
7.9% Vacant $29.33 FS
32.8% Vacant $31.12 FS
SUMMERVILLE 4.5% Vacant $29.66 FS
526
LOWER NORTH CHARLESTON
17
13.1% Vacant $25.74 FS
WEST ASHLEY
17
DOWNTOWN 13.0% Vacant $38.65 FS
5.9% Vacant $24.33 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
292,415
60,944
353,141
$41.24
15.6%
-
276,292
TOTAL DOWNTOWN
3,554,513
400,161
60,944
460,887
$38.65
13.0%
-
276,292
Daniel Island
1,878,736
217,894
397,776
615,670
$31.12
32.8%
-
-
Lower North Charleston
3,098,108
364,404
42,276
406,680
$25.74
13.1%
186,000
-
Upper North Charleston
2,499,810
319,455
15,000
334,455
$23.64
13.4%
-
-
Mount Pleasant
2,235,676
148,337
27,352
175,689
$29.33
7.9%
-
-
Summerville
1,007,027
20,459
25,300
45,759
$29.66
4.5%
223,500
28,000
West Ashley
1,159,784
55,722
13,228
68,950
$24.33
5.9%
15,500
-
TOTAL SUBURBAN
11,879,141
1,126,271
520,932
1,647,203
$27.30
13.8%
425,000
28,000
TOTAL MARKET
15,433,654
1,526,432
581,876 2,108,090
$30.14
13.7%
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
Q4 2023 charleston OFFICE MARKET REPORT
SUBLEASE OPPORTUNITIES ON THE RISE IN CHARLESTON
NEW DEVELOPMENTS IN NEXTON
Q4 RECAP • Large corporate subleases from former call centers, technology centers and defense contractors still burden the office market with large vacancies. • Office activity was positive throughout 2023 with the majority of transaction volume occurring with tenants in the 4,000 - 7,000 SF range. • Most of the larger tenant transactions took place in the newest or recently renovated spaces in the Downtown and Daniel Island submarkets • Rents throughout 2023 were stable on existing, dated buildings and increased considerably for brand new Class A product.
ATELIER | SHARBELL 175,000 SF TOTAL 36,000 SF (PHASE I) Q1 2024 DELIVERY
• The market experienced growth from new, inbound businesses establishing hubs in Charleston and a redeployment to quality office space to encourage in-office work policy. • Beyond the four office developments in downtown that were started before COVID, there is limited new development in the downtown and suburban submarkets except for Summerville. • Nexton, the master-planned, mixed-use development in Summerville, has four separate speculative office and medical developments currently under construction with deliveries of late 2024 and early 2025.
THE HUB | SL SHAW BUILDING 2 | 20,000 SF Q1 2024 DELIVERY
• There will be pressure on existing office investors to contend with the drastic changes in the cost structure to operate office buildings due to rising cost in insurance, taxes and entitlement and construction costs.
2024 OUTLOOK • More office activity is expected in 2024 with back to work policies and continued inbound migrations from other parts of the country.
DAYFIELD PARK | NORVELL 115,000 SF TOTAL 34,000 SF (PHASE I) Q1 2024 DELIVERY
• There is very limited investment sales in large format office buildings due to constraints on banks and other financial institutions viewing office as out of favor for positive returns. The preferred buyer of office will be the actual users of space due to the availability of debt and favorable value fluctuations. • 2024 is a pivotal election year for the U.S. presidency. This will create apprehension on capital spending and will keep the focus on long-term planning toward 2025 and 2026. BRIDGE-COMMERCIAL.COM
BRIGHTON COURT 14,400 SF | Q1 2024 DELIVERY PG. 3
Faber Pointe
Q4 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 Executive Vice President daniel.pellegrino@bridge-commercial.com
INVESTMENT SALES HAGOOD S. MORRISON, II, SIOR Executive Vice President hs.morrison@bridge-commercial.com
PROPERTY MANAGEMENT MEREDITH MILLENDER Vice President of Property Management meredith.millender@bridge-commercial.com
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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.
