Rising Occupancy and Rental Rates Continue to Set New Records
- The Charleston, SC office market continues to tighten with occupancy and asking rental rates reaching record-highs. Occupancy was over 90.0% for the first time in over a decade at mid-year 2015.
- Asking rental rates in Charleston, averaging $22.59 per square foot, are among the top rates in the Southeast, surpassing those of Atlanta, GA and Charlotte, NC.
- Construction activity is at its highest point since the recent recession with several office buildings under construction throughout the market.
- Office-using employment in the Charleston-N. Charleston, SC MSA is at an all-time high with 70,700 jobs.
Tightest Market in Over a Decade
Charleston’s vibrant economy, growing tech industry, educated labor force and increasing popularity are driving demand and contributing to the market’s success. Occupancy in the Charleston, South Carolina office market continued along its upward path through the second quarter of 2015, which ended with a vacancy rate of 9.8%, the market’s lowest vacancy since 2002. The vacancy rate is down from 10.2% at the end of the first quarter of 2015 and 12.0% two years ago.
Virtually all large blocks of Class A office space have been absorbed creating the tightest conditions ever. Few options remain for large Class A and B spaces. Tenants are finding themselves competing for space and are oftentimes limited by the space they occupy preventing expansion. The Class A vacancy rate for the market was 7.6% at mid-year 2015 with less than 370,000 square feet of Class A office space remaining vacant throughout the market. The “flight-to-quality” trend that started several years ago has significantly benefited Class A buildings throughout the market as tenants aim to get higher quality space for their investment. Demand for such space has been apparent in the Class A vacancy rate, which has remained below 10.0% since 2011.
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