The sluggish economy has affected the Charleston Industrial Market through lower import velocity at the port, reduced demand for traditional warehousing and reduced space demands by logistics providers. Despite the sluggish economy, site visits from out of state prospects increased in recent months.
The first six months of 2009 saw lease terms begin to normalize to three- to five-year lease terms for credit tenants, and rental concessions continued to increase in order to preserve building pro-forma rates. Local logistics providers have realized significant reductions in revenues and many sought rent reductions in return for lease term extensions. In the second quarter, most of the lease activity was in the 30,000-square-foot to 50,000-square-foot range.
Boeing’s recent acquisition of the Vought Aircraft Industries plant in North Charleston provided direct control of manufacturing for major components of the 787 Dreamliner, which has set records for advanced orders for a commercial aircraft. High demand for this aircraft could lead to a second assembly plant or other aircraft production facilities in the near future.
American La France consolidated production of fire truck bodies from two other states into its Jedburg headquarters, thereby, increasing the Charleston plant’s capability to include vocational, emergency, and military vehicles.
Force Protection’s local growth has leveled. The company has expanded its customer base to include armored vehicle contracts for Hungary and the United Kingdom and has focused on growing its overseas-based vehicle maintenance programs. This increased activity has not led to growth in the local market.
The Medical University of South Carolina (MUSC) research capabilities continue to grow. This has led to the expansion of medical manufacturing companies such as Berchtold and Trumpf Medical. MUSC was ranked this year as one of the top 50 hospitals in the nation in six categories by U.S. News and World Report and was recently awarded a $ 20 million grant from the National Institutes on Health. With such high levels of recognition research dollars should continue, which could lead to further growth in the manufacturing arena.
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