Industrial Insights V1 2023 FINAL LR - Flipbook - Page 3
In 2022, we discussed skyhigh warehouse demand,
the need for more square footage, and tenants
jockeying for limited space. It’s 2023 now, and here
comes that square footage.
As some of these new projects are completed and
become available, we’re likely to see an uptick in
vacancy to some degree. But to what degree? And
will demand keep pace?
There is currently a whopping 12M+ SF under
construction in the Charleston region. We are
tracking 30 buildings over 100,000 SF that are set
to hit the market by the end of this year. This comes
on the heels of some of the hottest industrial years
on record, with major drivers (Port of Charleston,
Automotive, EV etc) showing no signs of slowing.
This hinges on a variety of factors:
Even as the national industrial market cooled slightly
near the end of 2022 into 2023, Charleston remained
a bright spot. Vacancy rate (THE major indicator of
market hotness) hovered around 3.0% for Q1 2023,
a historically low number.
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What is the economy going to do?
When are interest rates going to peak, and
decline?
Will SC Ports continue stellar performance?
Will development continue to push inland,
where land is cheaper and less scarce?
No crystal ball over here, but we’re confident that
the answers to all of these questions are tinged in
positivity. Over the last several years, we’ve noticed
some trends in the evolution of the Charleston
industrial market. All of them point to continued
vitality for the market in general.
Things like:
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Total Market Stats: Page 04
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Stats By Submarket: Page 06
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Lease Rate By Size: Page 08
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Lease Rate By Location: Page 10
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The Race To 100 Million: Page 12
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A consistent string of positive net absorption
reports for big box spaces
Institutional investor demand for big box
spaces
An uptick in local/regional flex space activity
Retailers setting up distribution hubs (Walmart
in 2021; Target and Amazon next?)
Electrification and ancillary suppliers (Redwood
Materials, Volvo Expansion, Kontrolmatik)
Port of Charleston showing NO signs of slowing
Under Construction Pipeline: Page 14
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Proposed Pipeline: Page 26
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Lee & Associates Team: Page 34
Charleston is still one of the hottest industrial markets
in the nation. We’ve felt the global tightening of
industrial real estate to some degree, but our local
outlook is positive. The influx of brand new big box
buildings epitomizes the confidence in our market,
and the major drivers that impact industrial real
estate demand are only getting stronger.
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