High Demand and Low Vacancy Drives Institutional Activity
- Institutional investors and developers are expanding within the Charleston market because of high demand and low vacancy.
- Growing demand for two-day delivery is causing a shift from West Coast to East Coast shipping.
Institutional Owners Expand
Charleston is seeing demand for larger warehouse and distribution facilities between 200,000 and 700,000 square feet. Driving the demand is low vacancy, expansion of the e-commerce market, demand for faster customer fulfillment and expansion of major manufacturers in the region. To capitalize on this, institutional investors and developers are expanding into the Charleston market, building and investing in these facilities.
The market vacancy rate is 4.2%, down from 8.5% at the start of 2016. The vacancy rate in the market continues to decrease and the scarcity of suitable land is driving an increase in price. These market fundamentals are attracting institutional developers and investors.
To meet the demand of the e-commerce market, retailers need larger distribution centers capable of holding a larger supply of product to fulfill customer orders quickly. Many of the distribution centers need 36- to 40-foot clearance heights and more than one entry point to allow products to be stored and moved in or out of the facility efficiently. Charleston’s access to a deep-water port, an inland port and several major interstates attract these types of companies to the area. With access to more than 69.7% of the nation’s population within a 16-hour truck drive, Charleston provides a strong opportunity to e-commerce platforms and other distributors to fulfill customer orders and provide last-mile delivery in a much shorter time frame.
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