The Charleston area’s industrial real estate market continued to gain strength during the fourth quarter of 2014, according to a pair of reports issued last week, with one analyst claiming the sector’s vacancy rate hit a five-year low during the period.
Avison Young, a worldwide commercial real estate firm with an office in Mount Pleasant, said vacancy in the region dipped to 7.5 percent during the last three months of 2014, with annual rents averaging $4.45 per square foot.
The tightest market for industrial firms looking for space is in North Charleston, where the vacancy rate was just 3.9 percent — down from 6.9 percent a year earlier. Despite the lack of space, average rents dropped 7 cents year-over-year to $4.52 per square foot.
“Throughout the year there has been a large demand for 15,000- to 30,000-square-foot industrial warehouse buildings in the North Charleston market,” said a separate report by Charlotte-based real estate firm Lincoln Harris, which also has a local office. “More than one-third of the leased transactions (in 2014) have been within this square footage range. The high demand for this warehouse size is directly correlated to the industrial surge from Boeing.”
Boeing Co. makes its 787 Dreamliner commercial planes at its North Charleston plant and the facility is attracting a growing number of suppliers and aerospace companies to the area.
The peninsula’s limited industrial space is commanding the highest rents — $6.31 a foot — and second-lowest vacancy rate at 4.1 percent, according to Avison Young.
“We expect to see rents and land prices continue to strengthen in 2015,” the Avison Young report states. “Institutional investors and large developers are again trying to control new tracts for future development.”
Lincoln Harris pegs the overall fourth-quarter industrial vacancy rate slightly higher than Avison Young at 7.8 percent. That is down from a 9 percent rate a year earlier.
Flex space is commanding the highest rents at $9.83 per square foot while warehouse space is commanding an average of $4.22 per square foot, according to Lincoln Harris.
“The industrial market has benefited from the construction boom in Charleston,” Mike Ferrer, vice president of office and industrial brokerage for Lincoln Harris, said in a statement. “Contractors, building suppliers and trades have made up a significant amount of the industrial demand in 2014 and will continue to do so in 2015.”
One new industrial building came on line during the fourth quarter — a 31,700-square-foot space at 2094 Wambaw Creek Road in Charleston. Donovan Marine Inc., which owns the building, occupies 13,350 square feet at that site.
The largest move-in, according to Lincoln Harris, was at 300 Eagle Road in Goose Creek, where MeadWestvaco Specialty Chemicals occupied the entire 284,750-square-foot space in November.
Other key developments, according to the Lincoln Harris report:
Beverage distributor Lee Distributions moved into a 162,000-square-foot warehouse at 315 Marymeade Drive in Summerville.
Intertex Transloading Services, a global distributor of synthetic rubber and tire filler materials, opened a new facility in December at a 103,554-square-foot space off Cypress Garden Road in Moncks Corner. The Ohio-based company plans to invest $3.2 million in its Berkeley County facility.
Davis & Small Decor moved into the entire 143,786-square-foot building at 1100 N. Steel Circle in Charleston.
Reach David Wren at 937-5550 or on Twitter at @David_Wren_