The retail space markets in the Charleston, South Carolina MSA has, like the rest of the country, experienced unprecedented challenges over the past year as a result of the global recession. The economic downturn marked a definite change in pattern from previous years, as the market began to experience stagnation late in 2008 that resulted in a heavy tenant friendly leasing environment in 2009.
The market experienced numerous big-box closings from furniture stores, home décor outlets, auto dealerships during 2009. Decline also resulted due to bankruptcies of major national retailers caused by the absence of easy credit and a slowdown of spending and consumer confidence. Asking rents at year-end 2009 for non-anchor space under 10,000 square feet averaged $15.07 per square foot, a drop from $15.40 per square foot at year-end 2008. Asking rents for junior box space up to 25,000 per square foot averaged $8.44 per square foot at year-end 2009.
Although the market experienced a decline due to the global recession, significant announcements were made in 2009 that should signal a quick rebound. The Boeing Co announced that they would locate the new production facility for their 787 Dreamliner in Charleston. Clemson University, in conjunction with GE, announced that they would build a $98 million wind turbine test facility within the MSA, and Mediterranean Shipping announced plans to expand their service line between Charleston and the Suez Canal.
The West Ashley area has experienced a series of both new and redevelopment residential projects over the past several years, due to escalating home prices in other Charleston submarkets. As a result, grocery tenants such as Harris Teeter, Publix, and EarthFare have all added or expanded stores in this market, and junior anchors such as Staples and Best Buy also opened locations in 2009. West Ashley was home to the second highest quoted shop space rents in the MSA, averaging $18.79 per square foot, which was influenced by the redevelopment of Kimco’s St. Andrews Shopping Center on Highway 17 (Savannah Highway).
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