The first wave of new deliveries arrives
- The first of several bulk warehouses (greater than 200,000 square feet) was delivered.
- New speculative construction is causing rents to stabilize.
- Multiple major manufacturing projects are nearing completion which will drive additional demand.
The Charleston industrial market continued to expand rapidly in the third quarter of 2017. Another 307,353 square feet were delivered pushing vacancy higher to 7.13. There was nearly 354,000 square feet of net negative absorption and rental rates were flat at an average of $5.18 per square foot per year triple net.
Seventy percent of the industrial market is considered warehouse/ distribution space. In the third quarter of 2017, vacancy increased to 6.32% and there was net negative absorption of 266,000 square feet. Rents for class A warehouse space in the market ranged from $4.50 to $5.75 per square foot per year triple net. Many large speculative buildings are currently under construction and national developers had more pad-ready sites available.
This industrial subtype is primarily used to assemble goods for sale and distribution. Vacancy in manufacturing space rose slightly to 10.84% in the third quarter with 28,000 square feet of net negative absorption. Several manufacturing facilities are scheduled to deliver in the next year, the largest of which is the 660,000-square-foot Sundaram Clayton facility in Ridgeville.
Flex/R&D space is defined as industrial space where more than 30% of the building is utilized for office space. In Charleston, there are 3.7 million square feet of this type of space. In the third quarter of 2017, vacancy rose slightly to 4.43% with 60,253 net negative square feet of absorption.
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