When you’re all the rage, everyone wants in. High-rolling outsiders pay top dollar to join the entourage. But the party can grow overcrowded, and some would-be players may get bumped.
That’s the rarefied atmosphere in the Charleston area retail market — notably downtown. The city’s spiking visitor business and solid economy spurs demand and pushes up lease prices, says commercial brokerage NAI Avant’s Charleston office, which released its year-end outlook this week.
“The Charleston retail market ended 2015 with a robust development pipeline, low vacancy and elevated leasing velocity,” the report notes. Senior broker Dexter Rumsey and marketing coordinator Kaitlyn Mills compiled the findings.
Retail vacancies declined at year end to a 5.5 percent rate locally. “As we have seen in previous quarters, tourism, job creation and subsequent residential growth continued to drive development and strengthen the region’s already booming retail market,” the authors say.
They also note that a declining volume of available properties can lead to rising costs for retailers.
“The market saw an increase in rental rates market-wide with the uppermost rates again appearing on highly desirable King Street in downtown Charleston,” Mills and Rumsey say.
“Retail space options are hard to come by with occupancy levels at a record high causing retailers to feel a sense of competition and urgency as landlords continue to hold the upper hand,” they agree.
At the same time, the market remains stoked.
“Charleston is still hot on national retailers’ radar as interest continues to grow, new tenants are added to the market and others announce plans to join in the future,” the NAI Avant researchers say.
The Lowcountry gathered additional “prestige and recognition worldwide” in the last three months of 2015. Greater Charleston landed in the top 20 of Milken’s Best Performing Cities rankings.
Although King Street crowns the region in terms of retail activity, many places in metro Charleston are seeing bursts of interest as developers unveil master-planned communities and expansive neighborhoods.
NAI Avant’s retail observers say that Berkeley County continues to experience a population and development boom, specifically on the east side of Interstate 26.
The new Nexton community celebrated the opening of a child care center and workers breaking ground on a Residence Inn. Nexton’s head count is likely to reach 30,000 as the development builds out. Another 30,000 people are projected to live in Cane Bay a few miles to the northeast and 15,000 inhabitants are slated due east in Carnes Crossroads.
“Retailers have already shown great interest in these areas, which will continue as development does,” the NAI Avant authors say.
They spelled out six months of highlights in greater Charleston, organized by geographic areas, including:
• North Charleston
Centre Pointe, the “retail epicenter” of the Lowcountry market, continues to attract strong national retailers and restaurants. Conn’s HomePlus will occupy 45,800 square feet and La-Z-Boy 16,200 square feet adjacent to the 50,302-square-foot Field & Stream store off Centre Pointe Drive. The new stores expect to open this spring. Phillips Edison Grocery REIT bought North Pointe Plaza, which has a Walmart Super Center. Northern Tool & Equipment opened a 31,638-square-foot center and Babcock Furniture raised a 17,000-square-foot store.
• James Island
Harris Teeter opened a new store in a former Piggly Wiggly.
• Mount Pleasant
Bowman Place Shopping Center added 20,000-square-foot Kitchen & Company, joining Nordstrom Rack, Dick’s Sporting Goods and DSW. A J. Crew outlet store is set to open this spring. Walmart plans to expand its Wando Crossing store off U.S. Highway 17. Diamonds Direct opened its first South Carolina location near Mount Pleasant Towne Centre. Lowes Foods looks to open a nearly 50,000-square-foot store at S.C. Highway 41 and Woodpark Drive near the gates to Dunes West subdivision.
BJ’s Wholesale Club is planning an 87,000-square-foot store at the end of Jockey Court in Summerville. A Walmart Neighborhood Market will open on Dorchester Road, while an Earth Fare and Petco anchor a new center in town. Aldi, a 15,000-square-foot “low cost” European-owned grocer, will open its first local store at Dorchester Road.
• Charleston peninsula
The $80 million mixed-use Midtown development on upper King Street completed construction. The nine-story, 433,000-square-foot structure includes Hyatt dual-branded hotels adding 304 rooms, a 405-space parking deck and buildings for shops, restaurants and offices. The iconic Morris Sokol site on King Street sold for $22.5 million with plans for an undisclosed mixed-use development. Handmade jeweler Peyton William Inc. leased the 1,668-square-foot space at 241 King that formerly housed cookware store Le Creuset. Lovely Bride, with shops in New York, Los Angeles, Washington, D.C., Philadelphia and Rochester, N.Y., leased a 2,850-square-foot space at 127 King St. beside the Tellis Pharmacy building. Hughes Lumber may demolish part of its site on Mary Street just off King Street to make way for future development. The structure at 292 King St. that formerly housed Stella Nova Spa Salon building sold for nearly $2.3 million, a record for the area. The space at 359 King St., where Williams-Sonoma’s outlet sells upscale home goods, was unloaded for $6,275,000. A parking lot measuring less than one acre on East Bay Street was recently purchased for $2.4 million.
• Goose Creek
The first Charleston Neighborhood Walmart on Red Bank Road traded in a $12.8 million sale.
NAI Avant, founded in 1966, is headquartered in Columbia. Contact Rumsey at 843-518-5315 or Mills at 843-518-5314 or go to www.naiavant.com.
Reach Jim Parker at 843-937-5542 or firstname.lastname@example.org.