INDUSTRIAL MARKET REPORT
Q4 TRENDS & HIGHLIGHTS Q4 MARKET SNAPSHOT
Q4 CONSTRUCTION & DELIVERIES
• THROUGHOUT 2024, CHARLESTON’S INDUSTRIAL MARKET UNDERWENT DRASTIC CHANGES RESULTING FROM SUPPLY ADDITIONS, SUBLEASING INCREASES, WAREHOUSE INVENTORY REDUCTIONS, INTEREST RATE IMPACTS, AND UNCERTAINTY CAUSED BY ILA CONTRACT NEGOTIATIONS.
• GENERAL BUSINESS CAPITAL DECISION MAKING STALLED DUE TO THE MACROECONOMIC CLIMATE AS WELL AS ELECTION CONCERNS.
• SUPPLY ADDITIONS CONTINUED THROUGH 2024 AS THE CHARLESTON MARKET CONTINUES TO EXPAND OUTWARDS, CREATING OPPORTUNITY FOR OCCUPIERS IN THE MORE COMPETITIVE SUBMARKETS.
• TOTAL 2024 INDUSTRIAL INVESTMENT SALES ACTIVITY TRENDED DOWN FROM 2023 TO LESS THAN HALF OF THE TRANSACTION AMOUNTS BY BOTH SQUARE FOOTAGE AND DOLLAR AMOUNT.
• BRIDGE EXPECTS ONGOING LEASING AND INVESTMENT ACTIVITY TO INCREASE TO ACCOUNT FOR DELAYED DECISION MAKING FROM 2024, BODING FOR A STRONG 2025.
INCREASED ACTIVITY IN Q4 CREATES MOMENTUM GOING INTO 2025
2024 RECAP
• Charleston’s industrial market was impacted by many challenges throughout 2024 including:
Recalibration of Warehousing: As the macro-economy continues to right-size from COVID-era inventory booms, the supply and demand of warehousing and 3PL operations worked toward an equilibrium in 2024. That trend created several subleases and space reductions.
Labor Strikes: Multiple strikes have occurred over wages and automation causing disruptions to many industries. ILA strikes still loom over certain port dependent cities.
Reemergence of Owner User Dispositions: This was largely driven by companies looking to divide assets amid a rocky economic environment. With the ongoing uncertainty, many businesses chose to sell both operations and real estate to reduce exposure and raise liquidity. For some, this was a defensive strategy to weather the storm, while others sought to capitalize on current market conditions before further volatility set in.
Uncertainty Around the Election: The highly publicized election brought hesitancy throughout 2024 as many were in ‘wait and see’ mode.
High Interest Rates: Higher interest rates negatively impacted the availability of equity and debt for development and increased cap rates, which dampened the investment sale market.
• Despite these challenges, activity increased in Q4 with smaller and flexible leases getting signed, which helped alleviate sublease space. Additionally, construction wholesalers continued to commit space throughout the market.
PLENTY
OF POSITIVES FOR CHARLESTON
• The Charleston region has supply for both distribution and manufacturing companies to grow quickly and efficiently. Large scale manufacturers, such as Boeing and other manufacturers, announce future expansions.
• Looking ahead, Charleston begins 2025 with new enthusiasm. The development cycle has decreased, allowing for existing product to be absorbed. Interest rates are decreasing, giving developers and corporations a clearer perspective on financing for growth and development.
• In Charleston, 2025 will continue to be dominated by end users and not 3PL’s, unlike the national trends.
• Following the extension and threat of new tariffs, many Asian based retailers and 3PL’s have looked to the Southeast to stockpile inventory in the U.S.
HEADING 2
MULTI-BILLION DOLLAR ECONOMIC INVESTMENTS ANNOUNCED IN 2024
GOOGLE DATA CENTERS
Google is establishing data centers on two new campuses in Dorchester County. Additionally, Google is expanding their existing data center operation in Berkeley County. This project represents a $3.3 billion investment.
REDWOOD MATERIALS
Redwood Materials broke ground on their battery recycling plant located in Camp Hall. This project represents a $3.5 billion investment, the largest capital investment announcement in South Carolina history.
BOEING
Boeing is expanding on both their north campus and south campus to increase 787 Dreamliner production including 787-8, 787-9, and 787-10 fabrication, assembly, and delivery. This project represents a $1 billion investment.
Leonardo DRS will build a 140,000
Summerville/Jedburg
±354,202 SF Available
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
CPM Vice President of Property Management meredith.millender@bridge-commercial.com
