Residential boom spurs the need for new retail development
- Quality retailers will be drawn to the residential boom occurring in Berkeley County.
- Permitting timelines and shortage of construction workers delay projects.
2017 Market Recap
The Charleston overall retail market vacancy rate dropped slightly, from 6.2% at the end of 2016 to 6.14% during the fourth quarter of 2017. This quarter, vacancy in core or A position shop space rose from 3.33% during the fourth quarter of 2016 to 3.78%; likewise, non-core shop space vacancy increased from 8.48% at the end of last year to 8.77%. The overall triple net average shop space rental rate declined from $23.27 per square foot during the fourth quarter of 2016 to $20.23 per square foot during the fourth quarter of 2017. Triple net average rent in core shopping centers ended the year at $22.46 per square foot while non-core shopping center triple net rent averaged $18.87 per square foot.
Many residential developments are underway
Berkeley County has many residential developments proposed or at varying stages of construction, and they are expected to draw retail in a herd mentality. There are several new developments adding homes to Berkeley County, such as Nexton, located on the outskirts of Summerville, which is permitted to add up to 13,000 new homes and several additional apartments within an urban-style community complete with grocery stores, hotels, restaurants, office buildings and parks. Also, Cane Bay Plantation may house 25,000 or more residents upon full buildout; and Carnes Crossroads is a housing community with up to 5,000 new homes offering park amenities such as boating, fishing and hiking. In addition, Cainhoy Plantation, which is located between Clements Ferry Road and the Wando River, could add up to 18,000 homes upon completion. With the rising cost of residential living in Charleston, these more affordable new home areas will draw retailers as new residents fill the areas. Due to the past difficulties of permitting time, overwhelmed permitting departments and the protected wetlands limiting the areas which may be built upon, it is logical these planned communities with permitting in place will create core retail sectors and fill shop space easily, while drawing quality tenants to the surrounding areas.
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