Industrial Market Report | 2014 Charleston Commercial Market Forecast

Commercial Real Estate Market Forecast

October 8, 2014 | Daniel Island Club

www.CharlestonCommercialMarketForecast.com

DEMAND POPULATION GROWTH RENTAL RATES VACANCY AEROSPACE DATA CONSOLIDATION SALES ACTIVITY SUBMARKETS LEASE TERMS EXPANSION SPEC CONSTRUCTION DEMAND POPULATION GROWTH DISTRIBUTION VACANCY INTERSTATE ACCESS TECHNOLOGY SALES ACTIVITY SUBMARKETS LEASE TERMS EXPANSION NEW CONSTRUCTION JEDBURG DEMAND POPULATION GROWTH RENTAL RATES VACANCY AEROSPACE DATA CONSOLIDATION SALES ACTIVITY SUBMARKETS LEASE TERMS EXPANSION SPEC CONSTRUCTION DEMAND POPULATION GROWTH DISTRIBUTION VACANCY INTERSTATE ACCESS TECHNOLOGY SALES ACTIVITY SUBMARKETS LEASE TERMS EXPANSION NEW CONSTRUCTION JEDBURG DEMAND POPULATION GROWTH RENTAL RATES VACANCY AEROSPACE DATA CONSOLIDATION SALES ACTIVITY SUBMARKETS LEASE TERMS EXPANSION SPEC CONSTRUCTION DEMAND POPULATION GROWTH DISTRIBUTION VACANCY INTERSTATE ACCESS TECHNOLOGY SALES ACTIVITY SUBMARKETS LEASE TERMS EXPANSION NEW CONSTRUCTION JEDBURG DEMAND POPULATION GROWTH RENTAL RATES VACANCY AEROSPACE DATA CONSOLIDATION SALES ACTIVITY SUBMARKETS LEASE TERMS EXPANSION SPEC CONSTRUCTION DEMAND POPULATION GROWTH DISTRIBUTION VACANCY INTERSTATE ACCESS TECHNOLOGY SALES ACTIVITY SUBMARKETS LEASE TERMS EXPANSION NEW CONSTRUCTION JEDBURG DEMAND POPULATION GROWTH RENTAL RATES VACANCY AEROSPACE DATA CONSOLIDATION SALES ACTIVITY SUBMARKETS LEASE TERMS EXPANSION SPEC CONSTRUCTION DEMAND POPULATION GROWTH DISTRIBUTION VACANCY INTERSTATE ACCESS TECHNOLOGY SALES ACTIVITY SUBMARKETS LEASE TERMS EXPANSION NEW CONSTRUCTION JEDBURG DEMAND POPULATION GROWTH RENTAL RATES VACANCY AEROSPACE DATA CONSOLIDATION SALES ACTIVITY SUBMARKETS LEASE TERMS EXPANSION SPEC CONSTRUCTION DEMAND POPULATION GROWTH DISTRIBUTION VACANCY INTERSTATE ACCESS TECHNOLOGY SALES ACTIVITY SUBMARKETS LEASE TERMS EXPANSION NEW CONSTRUCTION JEDBURG DEMAND POPULATION GROWTH

INDUSTRIALREPORT

www.CharlestonCommercialMarketForecast.com

Tri-County Industrial Market

The Tipping Point: “Are We There Yet?”

Alan A. Bolduc, CCIM, SIORSenior Vice PresidentIndustrial & Investment Services

alan.Bolduc@avisonyoung.comT 843.860.9566

www.CharlestonCommercialMarketForecast.com

Local Industrial Brokerage firms

and CoStar unifying the market,

submarket and market data

reporting.

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www.CharlestonCommercialMarketForecast.com

Sales

Graphs on market data and trending

National Cycle

Lease

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South Carolina?

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2012 YE

2013 YE

2014 YTD

2015 F0

10,000,000

20,000,000

30,000,000

40,000,000

50,000,000

60,000,000

2012 YE 2013 YE 2014 YTD

2015 F4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

2012 YE 2013 YE 2014 YTD

2015 F$3.50

$4.00

$4.50

$5.00

$5.50

$6.00

$6.50

$7.00

2012 YE

2013 YE

2014 YTD

1030507090

110130150170

RBA SF

Vacancy Rate Average Asking Rent (NNN)

Lease Transactions (Original & Sublet)

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2012 YE 2013 YE 2014 YTD 2015 F$30.00

$40.00

$50.00

$60.00

$70.00

2012 YE 2013 YE 2014 YTD0

10

20

30

40

50Sold Transactions Median $/SF

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Aerospace 466 Companies 74% 5 employees or less

Rail/Transloading Demand is Escalating

Refrigerated/Frozen Pent up Demand (expanding from 50k SF to 550k SF in 2015)

Tipping Points

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Reducing the Impediments to the Market

Roads (In Process)

• Clements Ferry Rd widening 4 lanes to Jack Primus Rd

• Sheeps Island Interchange and Frontage Rds

• Palmetto Commerce Pky Phase 3 Extension

• Palmetto Commerce Pky, new 1-26 Interchange

• New Airport Entrance and I-526/Montague redesign

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Clements Ferry Rd widening 4 lanes

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Sheeps Island Interchange

and Frontage Roads

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Palmetto Commerce PkyPhase 3 Extension

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Palmetto Commerce PkyI-26 Interchange

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New Airport Entrance

1-526/Montague

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Reducing the Impediments to the Market

New Construction

350k SF

Class A Flex?

274k SF

140k SF

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Crosspoint

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Pattillo

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MWV

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Flex

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Next Year: Still BETTER?

More Port expansion investment and increased activity

More Boeing and Aerospace expansions in the market

New Class A buildings delivered

More activity further west on 1-26 to Jedburg and beyond

Increasing rents and longer leases

Renovations of Class C properties?