By: Mike White, SIOR, CCIM, Broker-in-Charge
The grapes have been pulled from the vines and now the winemaking has begun! Having returned from two trips to Napa and Sonoma, I can assure you it’s a sprint to the finish. Wineries are coping with a limited crop due to the drought conditions out west and the better-know labels must be careful in balancing price and yield for their 2015 vintage.
Our Charleston Industrial market poses similarly significant challenges to potential tenants and to suppliers drawn to our region for the first time. For the past decade, users of industrial space enjoyed up to a dozen site options at any one time, meaning tenants could delay making space commitments until they actually needed to move in. Not any more!
I can sense the frustration many clients face when they learn they only have one or two options for space sizes greater than 60,000 SF. Many of those remaining options also have competing prospects! The spec buildings going up all have pre-commitments for a portion of their total footprint.
We’ve reach a first-ever moment in the history of the Charleston Industrial market. Tenants now need to make “early commitments” for industrial space that hasn’t even been constructed yet. This sea change in thinking will ripple through the local economy, forcing business leaders to plan production growth over a longer time frame. It’s an enviable position for Landlords to be in, but I don’t think it’s necessarily healthy for our overall competitiveness as a region. I don’t see demand slowing down next year, for either buildings or wine.
I’ll be heading to Dusseldorf in a couple of weeks, trying to lure more German manufacturing companies to the Low Country. I’m embarrassed to admit we don’t have more readily available buildings to offer them. With any luck, they are better long-range planners than we’ve become!
Next Month: “How to Prepare for 2016”