Demand Exceeds Supply, Drives Development of New Retail Space
- Downward trending vacancy rate. Rental rates steadily increasing.
- New construction and redevelopments are strong throughout the market.
- Grocery wars continue.
- Grocery stores and outdoors sporting goods stores anchor new suburban developments.
- Tourism drives downtown growth. Suburban growth is driven by job creation and population growth.
- 2015 likely to bring new retailers and continued success.
2014 was a significant year for the Charleston, SC retail market, full of new construction, redevelopments and new tenants opening or announcing plans to enter the market. Vacancy rates declined and rental rates climbed, especially along downtown’s King Street, throughout the year. The fourth quarter ended with an overall vacancy rate of 5.02% for the market, down from the third quarter vacancy rate of 5.44% and year-end 2013 vacancy rate of 6.91%.
Shop space asking rental rates averaged $19.51 NNN at year-end 2014, up 3.5% from the third quarter, largely due to spikes in rental rates along King Street. Tenants along King Street are seeing rates vary from $30 to $70 NNN, with the lowest rates along Upper King Street and highest rates along Middle King Street. Asking rental rates for suburban shop space averaged $16.70 NNN, holding steady over the third quarter average, but increasing from $16.34 NNN a year ago.
Job creation and population growth over recent years has motivated grocery stores, outdoor and sporting goods retailers and other retailer types to open stores bringing redevelopment and new ground up construction to the market. Recent big box closures provide an opportunity to redevelop centers, recycling the space for new tenants. However, with successful leasing, few redevelopment opportunities remain, encouraging new ground-up construction in suburban submarkets.
Download the full report
For more information, including the market summary statistics, download the full research report.Download report