The World Has Changed...Again.
- Tourism continues to play an important role in the Charleston retail market as the city is voted as “The #1 City in the World” for the second time by Conde Nast Traveler.
- King Street continues to see the highest lease rates due to the retail sales volume. In addition, King Street’s new acclaim as a “Top 10 Retail Shopping Street” in the nation continues to attract national retail tenants and cater to the tourist retail market.
- Suburban vacancy rates declined to 8.22% at year-end 2012 from 9.18% a year ago. The decrease in vacancy in the overall market can be attributed to the increase in local retailers opening shops due to the availability of financing.
- Boeing’s multiplier effect throughout the state ripples down to Charleston retail.
- Developers are prepared to develop new product based on current vacancy rates.
- Average suburban asking lease rates remained steady at $15.46 PSF NNN due to big box spaces leasing at lower rates.
- National and international attention from the media over the past couple years puts Charleston center stage with other global retail markets.
2012 Market Cap
The Charleston retail market showed positive growth in 2012. Charleston saw an influx of national retailers entering and expanding within the market as a result of job and population growth within the area. Notable national retailers new to Charleston in 2012 include Kate Spade, Hobby Lobby, Garden Ridge, Michael Kors, Colonial Candle and Anthropologie. Announcements of Boeing’s continued success and expansion, Charleston’s consistent international and national rankings by notable publications, and the region’s favorable climate and lifestyle draw people for jobs and tourists alike to the area; and thus retail follows. These positive economic conditions strengthened the retail market in 2012 and will set the stage for a favorable outlook for the Charleston retail market in the future.
Boeing’s success has had a multiplier effect statewide, especially the local retail market. The economic impact of Boeing in Charleston is upwards of 5,000 jobs, translating to that many more consumers supporting the Charleston retail market. We expect Boeing to continue to strengthen retail as the company has recently purchased an office campus and announced plans to buy additional land to support their expansion.
Charleston’s increased national and international attention in the media from recent recognitions and rankings, exposed Charleston to the global retail market. This exposure catapulted Charleston on stage with New York, Los Angeles, London and Paris as retail destinations. As a result, several national retailers including Anthropologie, Michael Kors, Hobby Lobby and Garden Ridge took notice and opened stores in 2012. Predictably, tourism continued to play an important role in the Charleston retail market. For the second year in a row, Charleston was noted as “Top U.S. City” by Conde Nast Traveler.
Drawn by the southern hospitality, historic charm, beaches, foodie-culture, high street retail shopping and beautiful weather, people have been flocking to the Lowcountry, falling in love with Charleston, and choosing not to leave. The “Charleston Quicksand Effect” is quantifiable through the significant improvements in the 2012 residential market being reduced to only a slim three months supply of housing, sparking new planned residential developments. With the influx of new residents forcing new housing developments, the retail tenants are right behind them flooding into Charleston. More people, more houses, more retail.
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