Tourism and Residential Growth Drive Retail Development
- Construction activity remains strong, increasing development costs.
- Vacancy rate holding steady as tenants await new construction deliveries.
- Rental rates are on the rise.
- Residential growth driving suburban developments.
- New retailers continue to enter the market.
The Charleston, South Carolina retail market remains a top retail destination in South Carolina with high street retail along King Street and unique dining and shopping experiences throughout the market. Supply is tight, ending the first quarter of 2015 at a low vacancy rate of 5.4%, holding steady over year-end 2014 given the limited viable options for space. Despite no change in vacancy, activity is on the rise as interest in the market grows. Demand is surpassing supply leading to new ground-up construction, redevelopment, and creative re-purposing of older retail and non-retail space.
Asking rental rates are climbing as occupancy increases throughout the market. Asking rental rates for shop space averaged $20.34 NNN for the market at the end of the first quarter of 2015, up 13.5% over the previous year. Tenants along King Street are seeing rental rates vary from $45 to $65 NNN, with the lowest rates along Upper King Street and highest rates along Middle King Street. Asking rental rates for suburban shop space averaged $18.21 NNN, increasing 11.5% over 12 months.
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