INDUSTRIAL MARKET REPORT

• LEASING ACTIVITY AS OF QUARTER END REMAINS ON TRACK WITH 2022.

• WHILE SPECULATIVE DELIVERIES ARE AT THEIR HIGHEST, SQUARE FOOTAGE UNDER CONSTRUCTION IS DOWN SIGNIFICANTLY.

• SUBLEASE ACTIVITY INCREASES OVER THE PAST QUARTER FOR INDUSTRIAL SPACES IN THE REGION.

• VACANCY RATES HAVE INCREASED, BUT ARE STILL WELL BELOW HISTORIC FIGURES.

• MANUFACTURING GROWTH CONTINUES TO DRIVE OCCUPANCY NEEDS FOR MANUFACTURERS AND THEIR SUPPLIER BASE.

Bridge tracks buildings 10,000 SF and greater.

Bridge uses only internal research within its Charleston office for its market research.

*Other includes Ridgeville, St. George and other outlying rural areas within +/-50 miles of I-26/526.

**Total market statistics do not include specialty or specialty manufacturing buildings (22.3 Million SF).

• Charleston’s industrial market has experienced the largest development pipeline in the region’s history, pushing the vacancy rate from 1% over the past two years to approximately 3%.

• Three of the largest speculative buildings in the market’s history will deliver within the next 12 months. There are currently seven buildings under construction greater than 400,000 SF.

• End users and/or 3PL’s have brought new sublease opportunities to market as cargo volumes have stabilized; adding to the forthcoming supply.

• Rental rates are averaging $7.00 - $8.00 per square foot for larger scale buildings and $12.00 - $15.00 per square foot for smaller scale buildings, a 50% increase from pre-COVID rates.

• Leasing activity has remained strong with gross absorption closely mirroring the midpoint of 2022.

• Due to rising interest rates and need to accommodate rising cap rates on exit, the investment market has cooled.

• Rising interest rates to hedge inflation has trickled down to the Charleston region. Ports, retailers, 3PL’s, and manufacturers witnessed the impact of higher costs to the consumer.

• Higher interest rates have translated into higher costs for industrial development and speculative developers are reconsidering starting projects.

• South Carolina gained tremendous ground relative to largescale manufacturing. Existing OEM’s such as Volvo, Mercedes and Boeing have continued to ramp up as new companies have made large scale capital investments into the state.

• South Carolina has been the beneficiary of ‘reshoring’ of manufactured goods utilizing advanced processes and technology.

• The Charleston region needs to continue the capital reinvestment in infrastructure, specifically, toward safe, clean water and waste water treatment plants and sewer lines.

• Sound planning for the next generation and instituting good legislative policy will ensure our future success.

LOGISTICS CENTER

INDUSTRIAL ADVISORS

HAGOOD MORRISON, SIOR, MBA, CRE Executive Vice President hagood.morrison@bridge-commercial.com

PETER FENNELLY, MCR, SIOR, SLCR President peter.fennelly@bridge-commercial.com

SIMONS JOHNSON, SIOR, MCR, CCIM Executive Vice President simons.johnson@bridge-commercial.com

JOHN BEAM, SIOR Vice President john.beam@bridge-commercial.com

WILL CROWELL, SIOR Associate Vice President will.crowell@bridge-commercial.com

HAGOOD S. MORRISON, II, SIOR Senior Vice President hs.morrison@bridge-commercial.com

MEREDITH MILLENDER, CPM Vice President of Property Management meredith.millender@bridge-commercial.com

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Bridge Commercial uses only internal research within its Charleston office for its market data.

Bridge Commercial makes no guarantees, representations or warranties of any kind, expressed or implied, including warranties of content, accuracy and reliability. Any interested party should do their own research as to the accuracy of the information. Bridge Commercial excludes warranties arising out of this document and excludes all liability for loss and damages arising out of this document.