Ground-Up Construction Gains Momentum to Meet High Demand
- Market vacancy rate is down to 5.45%. Downtown vacancy rate is just 3.43%. Rental rates averaged $18.84 per square foot for shop space with some tenants seeing rates as high as $77 per square foot in the Downtown submarket.
- With limited options for redevelopment remaining throughout the market, ground-up shopping center construction is becoming active.
- The retail market is becoming a landlord’s market as available retail space runs scarce.
- Retail along King Street is increasingly difficult to find.
- Charleston City Council agrees to one-year moratorium on new bars.
- Job creation and residential growth is driving the suburban retail market.
Job growth and subsequent residential growth supported by Boeing and others throughout the Charleston area is motivating development of new shopping centers. The third quarter of 2014 ended with a low vacancy rate of 5.45% for the Charleston, SC retail market. The region is maintaining a historically high occupancy rate and is running low on available retail space in desirable intersections and along busy retail corridors. King Street is almost 100% occupied and new developments are occurring along Upper King. Midtown, the cornerstone of Upper King, will feature over 37,000 square feet of commercial space, a dual-branded Hyatt House and Hyatt Place hotel and a 7-story parking garage.
Due to the lack of existing space and few redevelopment opportunities remaining, the market is seeing a surge in ground-up retail construction. Well known national tenants such as Earth Fare and Academy Sports are anchoring the new suburban developments and will likely attract more national tenants to the centers.
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