Industrial Insights V1 2024 5.30.24 - Flipbook - Page 8
IMBALANCE LOOMS
SUPPLY/DEMAND MISMATCH CLOUDS INDUSTRIAL MARKET
The Charleston industrial market is grappling with an imbalance between supply and demand
dynamics, leading to a signi昀椀cant cooling in market conditions. Despite a record-breaking
delivery of 7.6M SF of new industrial space in 2023, followed by an additional 5.1M SF in the early
months of 2024, leasing activity hasn’t matched that pace. The average lease size in the current
year is less than 20,000 SF, a signi昀椀cant decline from the 2023 average of 40,000 SF. This trend
poses a challenge, as a signi昀椀cant portion of the newly constructed industrial inventory is tailored
to accommodate tenants seeking larger blocks of space.
5M
12%
4M
10%
3M
8%
2M
6%
1M
4%
0
2%
(1M)
0%
Net Absorption
8
Net Deliveries
Vacancy Rate
Vacancy Rate
Absorption & Deliveries (SF)
The con昀氀uence of slowing demand, smaller lease sizes, and elevated levels of vacant supply is
anticipated to exert downward pressure on the Charleston market through the remainder of 2024.
The graph below shows a stark correlation between Vacancy Rate, Net Deliveries, and overall Net
Absorption in the market.