Charleston is becoming an industrial hub as demand for industrial space continues to rise according to the latest Collier’s Industrial Research and Forecast Report. So far this year, the market has absorbed 654,951 square feet in industrial space and added six new buildings totaling 217,431 square feet.
The Port of Charleston Harbor Remains an Economic Driver
The Port of Charleston harbor is a key contributor to the increase in industrial activity. The Charleston Port has been “an economic driver for the Charleston market for hundreds of years, and now the deepening of the Port of Charleston harbor is a major contributor to the increasing industrial activity throughout the region,” Colliers reports. Congressional approval of the proposed $138 million federal funding in the 2020 fiscal year budget will enable the harbor deepening project to be completed and increase port activity and add to the logistics import/export pipeline that feeds the industrial market in Charleston.
Once the harbor deepening project is complete, the Port of Charleston will be able to accommodate larger container vessels whose imports will be transported to inland ports to be distributed nationwide. U.S. manufacturing products will be able to be exported conveniently through the Port of Charleston, which will be the deepest Eastern seaport. Once federal funding is approved by Congress, “Charleston will be one step closer to quickly becoming an east coast industrial hub,” the report notes.
Charleston Region Shows Rising Demand for Industrial Space
The Charleston industrial market has approximately 54.20 million square feet in industrial inventory within 1.072 buildings. There are 19 buildings currently under construction, which will add 3,511,495 square feet. So far this year the Charleston industrial market absorbed 654,951 square feet, with a concentration of absorption in the North Charleston submarket of 419,490 square feet.
The vacancy rate decreased from 8.95 percent from last year to 8.09 percent. The rental rates continue an upward trend of $4.95 per square foot from last year to $5.21 square feet in the first quarter of 2019.
- Warehouse/Distribution – this sector comprises 72.27 percent of the Charleston industrial market with 39.17 square feet and 829 buildings. There are 18 warehouses under construction in 2019 totaling 2,888,818 square feet.
- Manufacturing – this sector is primarily used to assemble goods and distribute them. There are approximately 10.71 square feet of manufacturing space in the Charleston region. Rental rates continue to rise to $3.96 per square foot from $3.53 per square foot last year.
- Flex/R & D – this sector is defined as industrial space that has more than 30 percent of its building designated for office space use. The Charleston flex/R & D market has approximately 4.32 million square feet.
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