The Greater Charleston medical office market maintained growth in the first half of 2005, with rental rates inching up and absorption being positive. The growth trends throughout the East Cooper, West Ashley and North Charleston submarkets continued as they have been over the past two to three years, with new product being added. Smaller specialty practices continue to “cluster” as growth radiates outward in each submarket. West Ashley medical office development continued to moved toward the proposed West Ashley Circle at Bees Ferry Road and Glenn McConnell Parkway in support of the increasing residential base. Likewise, medical facilities and the submarkets of East Cooper and North Charleston moved outward to new pockets of residential density. Activity in the Downtown Charleston submarket, though strong as well, was contrary to the suburban markets and experienced infill growth as opposed to radiating growth. Overall, the medical office market grew by 46,015 square feet to 1,878,559. Vacancy rose slightly to 141,100 square feet, but absorption was positive. Rental rates have increased by $.71 to $22.89 per square foot annually.
Activity continues to heighten in Downtown Charleston as the Roper and MUSC hospital projects move forward with major expansion. While Roper Hospital has completed building the expansion structure and works toward completion of the interior finishes, MUSC has erected steel for one of its Hospital Replacement Project buildings and anticipates a large number of division relocations throughout the campus. MUSC’s College of Health Professions plans on an August occupancy of the 80,000 square foot Charleston High School building on Rutledge Avenue. This newest Class “A” project in Downtown Charleston located at 163 Rutledge Avenue is projected to be online with approximately 7,500 square feet of medical office space remaining in October. Overall rental rates in the Downtown submarket have continued to climb, while vacancy remains low at 5.0% and may drop further by year end.
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