Mixed Bag for Charleston-Area CRE

The Charleston, S.C., commercial real estate market is rebounding in some sectors and experiencing a shakier recovery in others, according to first-quarter reports by Grubb and Ellis WRS. Industrial space vacancies declined to 9.5 percent, the lowest levels since 2007. However, office and retail space saw vacancies increase over the first quarter, with downtown Charleston maintaining the lowest vacancy rates and relatively high rental rates—around $30 per square foot.

CRE experts predict that, over time, the city will see slow but sure improvement, pointing to good news from suburban office markets, which have stopped the bleeding and are now climbing back from the economic downturn with vacancies as low as 12.3 percent. All markets are waiting for greater demand to help encourage the absorption and redevelopment of aging properties available on the market, the reports show. They predict that the widening of Highway 17 will help the retail market remain an attractive opportunity for commercial investors and businesses looking to lease space.

According to the reports, land acquisitions have resumed, with an 80 percent increase in land sales over the previous 12 months. “Pad-ready” industrial parcels have begun to go under contract again largely for “build-to-suits,” primarily in the main industrial corridors.