The Charleston region continues to remain strong due to new construction, increasing employment, tightening vacancies and increasing rental rates. The fourth quarter 2017 Colliers Research & Forecast Report shows a vibrant local economy, with two new buildings completed totaling 150,000 square feet in the suburban markets, and an increase in overall market rents from one year ago.
Construction Pipeline Remains High
Construction activity remains extremely high in the Charleston region with 573,965 square feet of office space currently under construction; 226,302 square feet is under construction in the Charleston Business District, and 347,663 square feet of construction is underway in the suburban market. These new construction projects include:
- Courier Square, a 215,000-square-foot mixed-use project on King Street in downtown Charleston. The construction on this mixed-use project should be complete in 2018.
- On Daniel Island, construction continues on a 172,000-square-foot building for Blackbaud.
The report states that these new buildings are being preleased by tenants, which will further tighten the rental market and increase rental rates through 2018. The Charleston region continues to draw different types of businesses to the area, which further tightens vacancy rates, and makes Charleston a strong market for investors.
Demand for Office Space Goes Up with New Employment
The Bureau of Labor Statistics most recent 2017 data show that there has been an increase of 3,000 jobs that require the use of an office, particularly in the professional and business services, financial and information sectors in the Charleston market during the last 12 months. The demand for office space will continue to grow as there were also an increase of 8,100 non-farm job opportunities in Charleston in 2017.
Significant Leasing Transactions in Fourth Quarter 2017
The research report shows significant leasing activity in the fourth quarter of 2017, with CoStar reporting the completion of 111 office leases, the majority of which were under 5,5000 square feet. Sales were strong with increasing prices per square foot. Major transactions included:
- 10,354 square-foot office building at 600 Seacoast Parkway in Mount Pleasant which sold for $2.3 million;
- 8,439-square-foot Class B building at 838 Morrison Drive sold for approximately $9.1 million;
- 450,608 square foot office building in North Charleston at 3600 Rivers Avenue sold for $33 million; and
- 284 King Street sold for $5 million and is expected to be redeveloped as a street retail, with office and residential space above.
Source: Colliers International Research & Forecast Report, Charleston, Q4 2017, by Crystal Baker
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