Activity & Deals Exploded in the First Quarter
- Activity and deal volume multiplied which coincided with the positive news and announcements from Boeing and the technology sector.
- Overall market vacancy declined in the first quarter as tenants contended for existing quality space.
- Product that has not seen any activity in years is now being absorbed.
- Charleston’s quality of life, cost of living and asset base will offset the effects that sequestration will have on the market.
- The delivery of Faber Pointe added much needed supply to the Suburban market of Lower North Charleston.
- Nexton Office Campus kicked off construction of Building I and upon delivery will be Summerville’s only Class A building in that submarket and of that size.
- The investment sales market is still on fire with the sale of 25 Calhoun.
- The entrepreneurial investor will find opportunities to reposition and repurpose Class B and C buildings.
First Quarter 2013 Recap
Robust activity and transactions marked the beginning of the first quarter 2013 for the Greater Charleston office market. Large contiguous blocks of space that existed in the market were consumed by Boeing and other expanding corporate tenants, specifically tech companies. Buildings that have not seen any interest in years are now getting attention and getting leased. After the 2012 year of renewals, tenants are ready to make a move and are actively searching for space in new buildings that offer creative workspaces with modern and efficient layouts.
The office sales market heated up in 2012 and remained hot in the first quarter 2013 with the sale of 25 Calhoun, which sold for approximately $370/SF; setting new standards for the office market in Charleston.
Overall market vacancy rates continued to decline, dropping to 12.34% at quarter-end from 12.61% at year-end 2012. Even with the delivery of Faber Pointe, a Class A office development in Lower North Charleston which added 75,000 SF of new supply, the market still had positive net absorption of 31,425 SF. Quality Class A and B spaces that are readily available and well-located are quickly being absorbed.
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