Building Sales + Building Construction = Strength in Numbers
- The overall vacancy rate declined to 10.4 percent at year-end, down a percentage point from 11.5% at the end of the third quarter.
- Net absorption at quarter-end and year-end were positive. Two build-to-suit projects in Palmetto Commerce Park were completed, including Cummins’ 125,000 SF distribution center and Streit USA Armoring’s 75,000 SF warehouse.
- Lease rates for Class A and B product continued to increase. The average asking rate for Class A bulk space is $4.62 in comparison to $3.70 for Class B warehouse space.
- Heightened industrial sales due to Charleston’s positive economic outlook, tax law changes, attractive owner occupant lending rates and power distribution issues in India.
- Charleston’s next generation of industrial buildings will reach asking rents of $4.75 - $5.25 per square foot for future Class A product.
- Speculative development is on the horizon. Pent up resistance to build a large, speculative building may start to wane in the coming months due to increased tenant activity and increased rates.
- Defense contractors could vacate space. Uncertainty of sequestration could relinquish some industrial space that is currently occupied by defense contractors.
Boeing is on track to reach full production rates of 10 midbody and aftbody sections, and three 787s in Final Assembly per month. Boeing is negotiating a deal which would include land purchases of 320 acres of airport 488 acres and a purchase option in 2025 for Boeing South Carolina’s main campus, which is 265 acres.
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