1) What do you feel is the biggest impact of Boeing’s recent announcement concerning the exclusive construction of the 787-10 Dreamliner at their Charleston, South Carolina location?
Thank you, Steve. This announcement from The Boeing Company is a very significant and positive announcement for the greater Charleston area and the state of South Carolina. We’ve been conducting final assembly for the Boeing 787-8 model for the better part of two and a half years. This most recent announcement clearly signifies that Boeing’s investment has paid off and as a corporation they have determined that Charleston is the best place for the future of the Dreamliner program.
2) How do you feel this decision will affect the commercial/industrial market in the local area?
Boeing is already having a very profound effect on the Charleston commercial real estate market. There’s clearly an appreciation of pricing whether it’s lease rates for existing buildings or asking prices for land sales. Locally, we call this the impact “The Boeing Effect”. There’s a general optimism, as the economy continues to improve and Boeing’s footprint continues to expand, that sellers and landlords have and that’s clearly been imputed into asking rates. We’ve seen an increase in the last two years of almost 15% across the board in Charleston commercial real estate for both land prices and asking rates for leases.
3) With this announcement, more Boeing suppliers will be establishing or expanding their footprint in Charleston. Talk about some of the companies currently in the area and others that you expect to locate here.
Over time, Boeing is going to need parts for the 787-10 models in 4 hours, not in 4 days. That means the sub-components, the sub-assemblies, and the manufacturers that produce all of complicated parts will have to be either located here or locate warehouses here where they can produce parts offsite and have them staged and ready for just-in-time delivery to Boeing. As the 787 program matures, a number of airlines will upgrade their previous orders from a 787-8 model to a 787-10 model instead. This means that the 787-8 will phase out faster, and the 787-10 will phase in more quickly, meaning more production for the Charleston area and ultimately the exclusive final assembly of the 787 Dreamliner. So if you’re a parts supplier, engineering company, real estate investor or play any role in the 787 supply chain, you’re going to have to locate a new facility in close proximity to Charleston.
4) If you could describe the Charleston industrial market in one word, what would that word be?
Robust. This means both strong and healthy.
5) What makes the Charleston industrial market so attractive to companies like Boeing?
Not only do we offer proximity to Boeing, there is a wonderful quality of life here. We are a “right to work” state and it’s easy to attract top talent. If the jobs are available, the talented people will come here. Boeing has proven this time and time again as they add to their work force. Every year that goes by, that workforce becomes higher skilled, better-trained and new employees adapt more easily to the Boeing family because of the increased level of experience. Walking through the Boeing South Carolina production facility always amazes me, everyone is wearing a Boeing t-shirt and displaying great pride in being a part of this special family. I’m sorry to admit, but you just don’t see this same level in pride in the Seattle area.
People just love living in Charleston. Whether it’s the beaches, the weather, the outdoor life, the restaurants, the friendly people, or perhaps a combination of all those factors, people who live here feel very fortunate to do so. I often tell people I meet in planes or at conference that I’m from Charleston and they all say the same thing: “You are so lucky, oh, I just love it there!”
6) What are some of the aspects of the commercial real estate market in the Charleston area that need to be addressed heading into the next decade in order to properly handle the increased growth?
We clearly have an imbalance in supply vs. demand. There is a much greater demand than we have current product for. Our market continues to lease one building a month, a rate that has been steady for the last 24 months in this market. We clearly need new construction on a speculative basis as well as a build-to-suit basis. I think we’re in the early stages of attracting more development dollars to Charleston, I also think that the existing developers who have land here are ready to put up vertical product. A perfect example of this is the success at Crosspoint.
Crosspoint is the premiere aerospace supplier location in the Charleston industrial market. The development team of Childress Klein Properties and Jamestown just broke ground on their second building, at 273,000 square feet, which will ready at the end of December 2014. We’re already talking to several very strong performers interested in renting space at that location.
7) What services does Charleston Industrial supply that meets the growing need for more industrial, warehouse and office space in the Charleston area?
We provide our clients and prospective clients with highly accurate and intuitive market intelligence regarding commercial real estate locations in Charleston. Our website has become the go-to location for current and accurate commercial real estate data needed by decision-makers who are contemplating entering or expanding within the Charleston industrial market.
Our industry is expanding and clients today are able to do far more from their own current location, without ever leaving their desk or town, than they have been able to do before. I have found that providing this market intelligence upfront, which has become more and more of a commodity, empowers our clients and streamlines their decision process.
8) What sets Charleston Industrial apart from its competitors?
Charleston Industrial helps people regardless of the size of their requirement or need. I’ve built my business and career by supporting the expansion needs of companies in the markets where I work. I’ve never had the opinion that I have to make a dollar on every single transaction. The most valuable intangible asset I have is my reputation and my time. I highly value the many referrals that my existing and past clients have provided to my future business.
9) Finally, look into your crystal ball and forecast the status of industrial real estate market in the Charleston area for the next 10 years and beyond.
The market is clearly going to grow at a very rapid rate, a rate that will exceed the national average. The primary driver, of course, will be Boeing and the aerospace industry. There is so much diversity in the Charleston commercial real estate space. Investors and owners should expect to see a broad expansion of all property types as our population continues to grow. We attract a high level of household income. Healthcare, technology, defense, software and the automotive industries will all be sources of industrial expansion in Charleston, accelerating the growth of commercial real estate and office/industrial properties.