Charleston’s office market is poised for sustained growth through the rest of 2019 according to the latest Collier’s Research and Forecast Report. Vacancy rates will tighten as tenants compete for available office space until new buildings become available. The Charleston suburban markets will see a rapid growth this year and will gain new office space as developments are completed. There are currently 832,819 square feet of office buildings undergoing construction or renovation in the Charleston metropolitan area.
Charleston’s Upper Peninsula is Booming
Charleston is a flourishing city, but the Upper Peninsula, in particular, is seeing a lot of activity as it becomes a desirable location. In recent years, the area has seen the development of charming restaurants and eclectic businesses. Industrial spaces have been upgraded to include unique architectural features and are a hub for high tech companies. The location is convenient for commuters from all the tri-county areas because it has easy access to the Ravenel Bridge, Rivers Avenue, and I-26.
There are several office buildings under development on the Upper Peninsula due to the demand. Land prices and building costs are high, so developers are being creative in the space they are using, including the conversion of warehouses. The Lumberyard is a 60,000 square foot former warehouse which is currently under renovation on Summerville Avenue near the King Street extension. The multi-tenant facility will have high tech features and comfortable outdoor spaces. The Charleston Tech Center is under construction on Morrison Drive and upon completion will be a cutting edge six-story building designed by several tech firms. Morrison Yard recently received approval for a 100,000 square foot multi-use contemporary building which will include residential, retail, restaurant and office space.
Overall Charleston Office Market is High
Thirteen office buildings are currently under construction or renovation. When these buildings are completed, there will be an additional 832,819 square feet added to Charleston’s office inventory. There are currently 392 office buildings with 13,596,249 square feet in the Charleston office market. The overall vacancy rate dropped to 11.67 percent in the second quarter of 2019 from 14.46 percent in the last quarter. The Charleston downtown business district currently has no office buildings under construction. The vacancy rate dropped slightly from 7.67 percent last quarter to 7.56 percent during the second quarter.
Suburban Office Market is Experiencing High Activity and Low Vacancy Rates
The Charleston suburban office market is booming with 10 office buildings totaling 461,821 square feet under construction and one building under renovation at Garco Mill in North Charleston. A 60,000 square foot office building was recently delivered at Ingleside Gateway in North Charleston. The suburbs absorbed 457,530 square feet in the second quarter of 2019. Vacancy rates dropped from 16.18 percent during the first quarter to 12.70 percent in the second quarter in the suburbs. Rental rates rose from $23.07 per square foot to $23.39 so far this year.
Carolina Services Inc. (CSI) is Charleston’s premier community space planning and improvement company. Contact CSI to see how we can help design, manage and implement innovative and cost-effective solutions to your commercial space.