The ebb and flow of the tides has long been a part of Charleston’s storied history. One tide that has changed in the Charleston commercial real estate market is the increase in speculative industrial building. Charleston is in tight demand and speculative construction is starting to catch up. After a somewhat sluggish post-recession period, the demand for Class “A” buildings designed for manufacturing, warehousing and distribution is growing rapidly and private investors are heeding the call for new speculative development.
Crosspoint, a 335-acre industrial location within the Palmetto Commerce Park in North Charleston, has a fully leased, brand new 182,000 square foot building and a second spec building is currently under construction. Tenants in Building #1 include JAS Forwarding and the new Boeing Research & Technology Center.
The newest Crosspoint building will total 273,000 square feet and is expected to be delivered at the end of this year. Future plans at Crosspoint will include up to 10 speculative or build-to-suit industrial facilities totaling 3 million square feet. The Crosspoint owners, developer Childress Klein Properties and Jamestown, have also cleared and permitted over 75 acres to be ready for the next major build-to-suit to come ashore at Charleston. Obviously, the Charleston industrial market is booming and developers are adding supply to meet the ready demand for more Class A space.
Contributing factors to this demand are the aerospace manufacturers and their supply base. A number of other players have also entered the market. South Carolina is rapidly becoming known as “The Tire State” as many tire companies are located in the Upstate of South Carolina. As the port prepares to deepen the pathway in order to accommodate the larger Post-Panamax ships, the logistics market is also expected to grow substantially.
What makes the speculative industrial building especially attractive to investors is the diversity of companies that are locating in Charleston. This provides a sense of security that “all the eggs are not in one basket” and is evidenced by companies committing to longer leases at increasing lease rates. Charleston Industrial believes in the strength of the local market and many speculative investors are equally bullish. The demand for large industrial buildings is here and we see little in the future to diminish this demand.