Charleston Industrial Market Finishes 2017 Strong
Jan 26, 2018 09:14AM
By Emily Stevenson
CBRE has released its Q4 2017 MarketView report on the Charleston industrial commercial real estate market. In 2017, the market has absorbed more than 2.6 million square feet of space. This represents a strong annual growth rate of 4.7 percent when compared to total market inventory. In Q4 2017, absorption topped 700,000 square feet for the sixth time in the last nine quarters, driven largely by the completion of a 725,000-square-foot expansion by Mercedes in the North Charleston-Ladson submarket.
“The North Charleston/Ladson submarket experienced 2.4 million square feet of absorption in 2017, which accounts for 90 percent of the Charleston market growth, an indication for the importance of the submarket to industrial users,” said Bob Barrineau, senior vice president at CBRE. “While the submarket provides strong access to both the Port of Charleston as well as a large number of manufacturers and logistics users, we also expect to see increasing activity levels in the I-26 North submarket once Volvo’s manufacturing facility becomes operational.”
Of the 5.1 million square feet of space under construction, 75 percent is not being built speculatively, meaning this level of growth is likely to continue, especially when combined with the recent momentum in the manufacturing and logistics sectors.
“2017 saw over 1.59 million square feet of spec construction, which was a record high for Charleston. For 2018, the Charleston market is expected to beat that record by at least 100,000 square feet,” said Brendan Redeyoff, vice president at CBRE. ”Fortunately for Charleston industrial users, consistent market performance is attracting a significant number of out-of-market developers ready to deliver a significant amount of space to the market.”
In the last two years, more than 3 million square feet of speculative development has been completed, almost 60 percent of which has been absorbed. More than 700,000 square feet were delivered during Q4. The most significant is the new 580,000-square-foot project completed by Chicago-based developer, Clarius, in the North Charleston/Ladson submarket.