The Charleston, South Carolina, medical office market remained stable over the course of 2007. Even as the national economy fell into a housing crisis, which greatly impacted the Charleston economy, both occupancy and rental rates in the medical market remained strong.
The average rental rates experienced in the Charleston medical market increased from $24.19 per square-foot at year-end 2006 to $25.11 per square-foot at year-end 2007. The total market size increased by 214,316 square feet, and the market absorbed 53,270 square feet in the twelve months prior to year-end 2007. This increase in market size resulted in a slight decrease in the overall occupancy rate, from 93.35% at year-end 2006 to 91.54% at year-end 2007.
The Charleston economy sustained a healthy increase in employment, adding 10,700 jobs to the employment base from January to December 2007. During this same period, the health services sector grew by 1,300 jobs.
New Medical Office Buildings & Construction
While there were no new multi-tenant office properties developed during 2007 in downtown Charleston, the Medical University of South Carolina (MUSC) expanded their presence with the completion of the 641,000 square foot Ashley River Tower. This facility houses the specialties of heart and vascular disease, as well as digestive diseases.
The East Cooper submarket grew by 148,141 square feet during 2007. Among this new construction included the 21,000 square-foot Class A facility for Southeastern Spine on Chuck Dawley Boulevard, as well as the 69,000 square-foot Wingo Way Medical Office Building, which is home to Lowcountry Medical Associates. Charleston Radiology Associates also completed their new Imaging Specialists of Charleston facility at the intersection of Interstate 526 and Highway 17.
East Cooper also experienced a small amount of speculative medical projects, including the 8,600 square foot building on Von Kolnitz and a cluster of six buildings on Lone Tree Drive between Interstate 526 and the Wando Terminal.
The West Ashley/James Island submarket grew by 28,350 square feet during 2007. Coastal Pediatric Associates completed their new 9,000 square-foot facility in the third quarter of 2007, and two to three more buildings totaling up to 20,000 square feet have been proposed. The new Marsh Oaks Medical Park is now underway, with one building completed and the second scheduled for delivery in the second quarter of 2008. As of year-end 2007, all construction in the park was purely speculative.
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