Investment Sales in Charleston Commercial Real Estate Exceed $1 Billion in 2015

Commercial Real Estate

Charleston has benefited greatly from the strengthening global economy and foreign investment in U.S. commercial real estate in 2015. The latest Collier International Research and Forecast Report (http://www/colliers.com) shows that investment sales in Charleston metropolitan area has increased for the sixth consecutive year, with investments in multifamily units, shopping centers, net-leased assets and hotels leading the way.  This trend will continue into 2016 as investment sales remain strong.

For the first time, Charleston investment sales exceeded $1 billion in total sales. This represents a 16 percent increase from 2014, when sales topped out at $865.6 million.

According to Real Capital Analytics, CoStar, investment sales in the United States totaled $533 billion in 2015, 23 percent more than in 2014 and the second highest level of investment on record. 2007 was the peak year for foreign investment nationwide at $573 billion.   Prices have been going up in primary markets, along with a strong demand for investments.  As a result investors are turning to secondary and tertiary markets like Charleston, where cap rates are higher and prices are more attractive.  Investors have shown interest in all properties, but multifamily and retail sales accounted for 65 percent of total investments.

A Healthy Commercial Real Estate Market Attracting Foreign Investment

The commercial real estate market remains robust, and job creation is strong in the Charleston area.  Occupancy rates are over 90 percent in office, industrial, retail and multifamily markets. The real estate market remains stable and provides a secure investment environment, according to Real Capital Analytics. Urban Land Institute and PwC’s 2016 Emerging Real Estate Trends ranked Charleston as one of the top markets to watch, at number 25 this year.

Multifamily Sales Lead Investments

Multifamily sales accounted for more than half of total sales in Charleston metropolitan area. There is a growing demand for rental units, and a rise in occupancy and rental rates, which has led to strong investments opportunities.  Twenty six multifamily properties were traded in 2015 with total sales at $521.6 million.

National Retailers Attracted to the Strong Local Economy

The strong local economy has attracted national retailers to the Charleston market, as well as shoppers, tenants, and investors.  Shopping centers have seen record-high occupancy and rental rates, and a spike in retail sales during the fourth quarter of 2015.  Sales in the retail market topped out at $131.1 million for an average price of $133 per square foot.

Single tenant sales also remained strong in 2015, with Walmart and national pharmacies attracting investors in the Charleston market. Office property and hotel sales were robust and trading at top dollar.  The tourist industry and growing business sector are driving investments in hotel properties. Industrial sales in Charleston totaled $91.5 million in 2015.

Caldwell Commercial remains abreast of local development and economic real estate trends.  To learn more about our properties and services, email us at info@caldwellcommercial.com.