New inventory stabilizes rent
- Vacancy is expected to rise as more new product is delivered.
- Deliveries of speculative buildings are causing rents to stabilize.
There is no doubt Charleston has an increasingly positive outlook for its industrial market. The Port of Charleston annual cargo shipment totals have set a record during 2017, moving more cargo boxes last year through the port than ever before in its 75-year history. The Inland Port in Greer, SC is also reporting a record number of shipments, a 20.4% increase over the shipments during 2016. Global trade growth is expected to continue expanding through next year with the influential presence of Boeing, Volvo and Mercedes-Benz Vans campuses fulfilling their import/export needs. In addition, the tourism business is booming and, according to a study conducted by the Charleston Daily, Charleston ranks “#4 for Best Mid-Sized Cities for Job Growth in 2018.”
With all the positive accolades, it is difficult to believe there could be a downside. However, Charleston construction may have reached an inflection point in late 2017. There were 244,032 square feet of industrial buildings delivered during the fourth quarter of 2017 to the Charleston market. In addition, another 3,667,622 square feet of industrial buildings are currently under construction, with another 4,400,020 square feet proposed but not yet started. While Charleston has a positive business environment and a propensity for growth, it may not be able to fill the vast amount of industrial buildings as quickly as they are being delivered, and this is causing an oversupply of inventory.
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