Industrial Insights V2 2023 FINAL - Flipbook - Page 3
Now in Q3 2023, we don’t have all the answers,
but we do have some context.
In the face of this, consumer spending has
actually been resilient. But the target of that
spending has shifted from what we witnessed
during the pandemic. During COVID times, the
industrial sector skyrocketed when consumers,
stuck at home, embarked on online shopping
sprees partly fueled by stimulus checks. Then,
as restrictions lifted, some of that former
e-commerce spending redirected toward
brick-and-mortar retail along with F&B and
experiential retail.
As for the economy, there is no other way
around it: it’s been better. We’ve all read the
headlines and have likely experienced effects
of the slowdown in our daily lives, evidenced
by months of in昀氀ation-昀椀ghting and interest rate
hikes which have yet to peak.
This has led to a natural softening in our
industrial market. SC Ports, the main driver
for warehouse demand, has predictably
slowed. The overall vacancy rate is creeping
up. Sublease availability is high. But if we look
deeper, there are silver linings.
At the beginning of 2023, in the 昀椀rst edition of
this report, we asked the following questions:
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What will the economy look like the rest of
the year?
When are interest rates going to peak?
Will SC Ports continue its stellar performance?
Will tenant demand keep pace?
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Total Market Stats: Page 04
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Stats By Submarket: Page 06
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Market Challenge #1: Page 08
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Market Challenge #2: Page 10
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Market Challenge #3: Page 12
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Charleston’s Resilience: Page 14
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Under Construction Pipeline: Page 16
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Proposed Pipeline: Page 28
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Lee & Associates Team: Page 36
So far in 2023, we’ve seen 3.33M SF in new
leases, and are still in the positive column in
Net Absorption. New construction hasn’t fallen
off much, and deliveries of pristine big box
space are happening almost weekly. And even
though tenants are taking a bit more time to
evaluate deals, our agents have witnessed high
activity in leasing.
No market has emerged unscathed from the
recent economic conditions. But Charleston
has fared better than most. We can look to
things like consistent leasing activity and
continued economic investment in our region
as indicators that Charleston is still valuable in
the eyes of investors and occupiers of industrial
real estate.
We’ll continue to ride this wave, and because
of a variety of factors that have propelled our
market into the global conversation (Top10 national port, automotive/electric vehicle
emergence, and business-friendly climate), the
Charleston area will undoubtedly re-emerge
favorably when the economic tide turns.
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