Growth in the I-26 corridor continues to increase with the latest announcement by a subsidiary of Transwestern Development Company to build two side-by-side speculative industrial sites near the VolvoCars manufacturing site. Volvo plans to begin production at the new site next year. Chicago-based Ridge Development plans to build the two 343,150 square foot buildings at the Charleston Logistics Center on about 67 acres near the intersection of Jedburg Road and Drop Off Drive.
Ridge purchased the property in May for $3.625 million from Jedburg Investments, LLC. Ridge Development filed a permit application with the state Department of Health and Environmental Control, and plans to have a 100 foot buffer between the buildings and nearby Felder Creek residential neighborhood. Steve Kros, executive vice president of Ridge Development told the Post & Courier that “we will begin construction on the first building this summer and we plan to start the second building in late 2018.” He added that construction for each building will take about nine months.
The I-26 corridor is one of Charleston’s booming real estate markets for industrial construction according to a recent report by CBRE commercial real estate firm. CBRE’s research report states that the area has close to 9.2 million square feet of industrial space with only a 2.2 percent vacancy rate. “The North Charleston/Ladson and I-26 submarkets are the epicenters of market activity,” states the report. “Fueled by port-related activity and expansion in petroleum, automotive and aerospace sectors, speculative space is being leased at a rapid pace,” according to the report’s findings. The area should expect to be “peppered with automotive suppliers and smaller distribution operations over the next decade.”
Of the space being developed in this submarket 570,000 square feet is speculative, meaning that these new buildings were being constructed without a tenant in place. This speculative construction indicates that there is a high level of confidence in the new area’s ability to fill vacancies. The CBRE research report said that asking rates in the last four quarters have gone up by 20 percent, which is fueling the high levels of market activity. Much of this recent activity can be attributed to the delivery of Class A speculative developments, but also indicates according to the CBRE research report “that Charleston is a market capable of producing high returns for investors.”
CBRE Charleston Industrial & Logistics Report, Q3 2016, “Charleston Industrial Growth Extending Along I-26 Corridor as Developers Bring More Spec”
Post & Courier, “Volvo Driving I-26-Area Development,” by David Wren, May 31, 2017
Caldwell Commercial keeps abreast of global and local economic trends to best serve the needs of our clients. Contact us today at caldwellcommercial.com to learn more about our commercial real estate properties and services.