Q2 2025 Charleston Industrial Market Report_Bridge Commercial

INDUSTRIAL MARKET REPORT

Q2

MARKET SNAPSHOT

Q2 CONSTRUCTION & DELIVERIES

Q2 TRENDS & HIGHLIGHTS

• NEW CONSTRUCTION SLOWS DOWN ALLOWING FOR THE MARKET TO ABSORB SPACE.

• VACANCY DECREASED AT THE END OF THE SECOND QUARTER, HOWEVER, VACANCY RATES REMAIN NEAR RECORD HIGHS.

• INCREASED ACTIVITY FOR BOTH LEASING AND SALES.

• CHARLESTON IS WELL POSITIONED FOR CONTINUED ECONOMIC GROWTH.

• OWNERS/USERS ARE WELL POSITIONED TO INVEST IN THEIR OWN REAL ESTATE.

• THE ONE BIG BEAUTIFUL BILL PASSES THE HOUSE AND SENATE.

CHARLESTON’S INDUSTRIAL MARKET REBOUNDS

Q2 2025 RECAP

• Charleston’s industrial market is at a turning point midway through 2025 with increased demand in the 100,000 - 300,000 SF range and ready to absorb much of the new space that has been delivered over the past few years.

• Due to the signing of new leases and limited deliveries, Charleston’s industrial market ended the second quarter with a decrease in vacancy rates.

• Once vacancy rates continue to trend downward, we will see more new construction.

INVESTMENT SALES ARE COMING BACK

• The market is seeing activity in the sales of industrial projects for both investors and end users in the second quarter.

• Even though cap rates have increased, rental rates have also increased. Those owners who entered the market prior to the wave of development, will be rewarded.

• Opportunistic investors are benefiting because of stalled pricing due to higher than average interest rates.

CHARLESTON REGION POISED FOR GROWTH

• The Charleston region is well positioned for economic growth with solid investments in roads, schools, and general infrastructure.

• The South Carolina Ports Authority continues to deploy their long-range plan on the development and convergence of new assets to foster statewide growth.

• With the passing of the one Big Beautiful Bill in early July, these federal policies should provide stimulus for both manufacturing and general development by offering tax incentives for investing in America’s growth.

• Additionally, the one Big Beautiful Bill creates: - Opportunity for real estate investment; - Industrial real estate will benefit from manufacturing products that are made in America;

- Opportunity funds are extended and create more investment in much needed areas.