High Occupancy and Rent Growth Supports New Construction
- Charleston, SC’s growing economy, thriving with low unemployment rates, a high quality of life, and a growing young population with bachelor’s degrees or higher, is contributing to the recent success of the multifamily market.
- 2014 ended with the market’s second highest occupancy rate since the third quarter of 2007, according to MPF Research.
- Same-store rents up 4.9% since February 2014 according to AptIndex.
- Sales activity was healthy throughout the year with institutional ownership soaring.
- Of the 21 markets tracked by AptIndex in the Southeast, only five cities had lower vacancy rates than Charleston.
The Charleston, SC multifamily market remains vibrant and poised for further growth in demand, new construction, monthly rents, and sales velocity. The market’s diverse and flourishing economy is a significant driver of the multifamily market, which is supported by the Port of Charleston, manufacturing growth, tourism, the military and the growing technology sector. Boeing, which employs 7,800 individuals locally, recently designated its Charleston plant as the sole producer of the 787-10, the newest and largest member of the Boeing Co.’s Dreamliner family. In addition to the growing manufacturing sector, Charleston’s technology sector is gaining attention and earned a ranking from Statetech in 2013 naming it one of the top 12 tech hubs in America. Software companies, Blackbaud, Inc. and Benefitfocus, each have corporate headquarters located in Charleston and employ 1,300 and 1,000 individuals, respectively. Earlier this year Benefitfocus announced plans to expand its Daniel Island campus and create 1,200 additional jobs. Such high-wage jobs attract young professionals to the area, adding to the pool of renters and benefiting the multifamily market.
Charleston’s younger population is growing in size, increasing the group of apartment renters. The 20-34 year old age group increased 24.2% from 2008 to 2013, increasing the demand for apartments in the MSA. Additionally, the age group is a growing percentage of the entire population accounting for 23.5% of the 2013 Charleston MSA population. This growing Generation-Y population is attracting developers to create high-end and eco-friendly complexes in locations close to their employers and entertainment districts. Two examples include new developments Elan Midtown and The Boulevard in Mount Pleasant, which have achieved rents over $3.00 per square foot. River’s Walk has attained rents well above $2.00 per square foot for its one bedroom suburban units in Mount Pleasant.
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