The growth in the number of people who live and work in the Charleston area have increased demand for office space according to research done by Marcus & Millichap, a California-based commercial real estate brokerage and research company. New business headquarters and centers are interested in renting office space in Charleston as a result of increased employment and population gains in the Lowcountry.
Charleston increased total employment by 1.5 percent since last year with 5,200 new jobs created. “The unemployment rate has sat below 4 percent for 19 consecutive months, making it harder for employers to fill open positions,” according the Marcus & Millichap.
“Vacancy in Charleston is tightest among the major South Carolina metros as companies move to and expand here. Population growth will also create a need for additional office space as businesses such as law, real estate and insurance firms grow,” the research shows.
The research finds that the office vacancy rate of 9.5 percent is greater than for other similarly sized cities in South Carolina, including Columbia and Greenville. The $25.16 asking rent is $7 to $9 higher than these two cities and is up 4.2 percent from last year.
Construction has been completed on 584,600 square feet of office space in 2018, which is four times more office space completed the year before. An additional 600,000 square feet of office space is in the pipeline for completion in 2019. The largest project that is underway is a 172,000 square foot building for software firm Blackbaud on Daniel Island.
Rent for office space has increased by 3.6 percent in the first quarter of 2018 compared to the previous year, with a record high $24.63 per square foot. Top-notch “class A” properties were in less demand and went down by 5.5 percent to $30.52 per square foot in March of 2018.
Downtown Charleston is the most expensive per square foot to rent, and is up 10.6 percent in 2018 to $33.28 per square foot, with the second lowest vacancy rate at 7 percent. North Charleston has the lowest vacancy rate in the metro area at 6.7 percent, while Dorchester County has an 8.6 percent vacancy rate. East Islands-Mount Pleasant stands at 9.1 percent, greater Charleston at 14.5 percent, and outlying Berkeley County at 17 percent vacancies.
Carolina Services Inc., (CSI) is Charleston’s premier commercial space planning and improvement company. Contact CSI to see how we can help design, manage and implement innovative and cost-effective solutions for your commercial space.