The global economic crisis has dampened leasing and sales activity for 2009 yet the industrial announcements of the latter part of the year were phenomenal.
The Charleston Metropolitan Area industrial market consists of approximately 30,995,908 square feet, not including major manufacturing facilities. As of December 31, 2009, the market vacancy rate was approximately 13%. From a historical absorption perspective, the Charleston industrial market absorbed 1,354,789 square feet in 2007, 1,247,549 square feet in 2008 and 661,998 square feet in 2009. While 2009 was less than the previous two years, we anticipate 2010 absorption to be significantly higher.
At year-end 2009, there were only four available buildings in the market that were of institutional quality and larger than 200,000 square feet. Prospect activity surrounding these facilities was very high and Colliers anticipates several of these will be leased during 2010 resulting in a shortage of available Class A distribution facilities.
Port and Distribution
The port has seen recent improvement in container volumes in year-over-year numbers; through January of 2010 port volume was down only 20% from twelve months prior, compared to 32% in November 2009. The anticipated shift in Asian imports from the West Coast to the Southeastern United States is coming to fruition.
With the Panama Canal expansion on the horizon, shipping lines are beginning to send larger vessels to the Southeast. The new Charleston Naval Base Terminal was planned to be operational by 2014 thereby coinciding with the Panama Canal expansion and increasing capacity by 60%, but the final completion date will be driven by demand. Charleston can currently handle two way vessel traffic up to 48’ of draft with the tides. This equates to 90% of the worlds existing and on-order container ships up to 9,000 TEUs.
The aggressive marketing efforts of the new ports authority CEO and his staff resulted in Maersk’s renewing its contract with Charleston for five years and contributed to Charleston’s big win over Savannah - a large national tire retailer’s build-to-suit of 1,100,000 square feet at Rockefeller Group Foreign Trade Zone Charleston. Gildan Activewear also purchased the 850,000-square-foot Mikasa Distribution Facility for $20 million to use in their distribution of family apparel.
Other additions to the market were Regal Logistics and Moulton Logistics, which established distribution centers on Clements Ferry Road, as well as Sunland Distribution, which established a facility in North Charleston.
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