Charleston-area industrial construction weathers economic pressures

Original Article found in The Post and Courier

The Charleston-area industrial real estate market proved resilient in the first quarter despite rising interest rates and a cooling economy, with tenants absorbing 2.2 million square feet, according to a new report.

All told, according to Colliers, 3.7 million square feet of new space came online in the first three months of the year. Vacancy rates ticked up as well, but they remained near historic lows at 3.74 percent despite all the new construction.

“Since the beginning of 2021, the market has absorbed an average of 1.6 million square feet per quarter,” the commercial real estate firm said in its analysis. “This was largely driven by warehousing to support the advanced manufacturing sector, particularly internal combustion and electric vehicle manufacturing, and expansion of third-party logistics activity.”

Over the coming months, those business sectors will continue to drive demand for additional real estate, according to the report. About 11.8 million square feet of industrial space is under construction in the three-county region.


Charleston-based FlexCold announced plans to build a 151,600-square-foot cold-storage warehouse along Patriot Boulevard in Dorchester County. The 151,600-square-foot building on roughly 51 acres is expected to create 59 jobs.

The Port of Charleston is still the main driver, even though cargo levels have fallen in recent months as post-pandemic consumers spend more money on services and experiences than on imported goods. Inflation has also tamed what had been a frenetic spending spree last year on items like furniture and electronics.

A plan by ZEB Metals to build an aluminum recycling plant on 32 acres along U.S. Highway 52 in the Goose Creek area was the largest industrial announcement dollar-wise during the quarter, Colliers said. The $80 million project is expected to create 28 jobs.

Second to that project was a $49.9 million cold-storage warehouse that Charleston-based FlexCold plans to build along Patriot Boulevard in Dorchester County. The 151,600-square-foot building on roughly 51 acres is expected to create 59 jobs.

A separate report by Avison Young shows average annual base rents for Charleston-area industrial properties hit $8.89 per square foot in the first quarter and are expected to continue rising on the back of strong demand.

“As larger tenants relocate to the Charleston market, demand has increased for industrial space,” the firm’s local office said. “The projected average building size for deliveries in 2023 is 346,000 square feet. Based on construction activity, this number is expected to rise to 540,000 square feet in 2024.”

The Palmetto Commerce Park area in North Charleston and the Summerville region along Interstate 26 continue to be the hottest spots for industrial construction, with a combined 42.7 million square feet of space — nearly two-thirds of the market’s total.

Up a notch

An economic development trade publication reports South Carolina is the nation’s seventh-best state for attracting industrial investment.

The ranking is included in Site Selection‘s annual Prosperity Cup list, which measures the effectiveness of each state’s economic development efforts.

The Palmetto State moved up one spot in the magazine’s 2023 rankings. Neighboring states Georgia and North Carolina placed first and second, respectively.

A focus on electric vehicles and the batteries that power them helped the S.C. Department of Commerce recruit 120 businesses and expansions representing investments topping $10.27 billion in 2022 — a record year for economic development in South Carolina and an 80 percent increase over the previous mark set in 2021.

The new deals promise to create 14,083 jobs over time, with most of the activity centered around plants in the Charleston region and the Upstate.

Bottled up

South Atlantic Canners is spending $28.7 million on a multiyear expansion at its Lee County site that will create 15 jobs over the next five years.

The company is managed by Coca-Cola Consolidated Inc., the largest independent Coca-Cola bottler in the United States with production of more than 300 beverage brands and distribution to 14 states and Washington, D.C.

South Atlantic Canners plans to renovate its existing Bishopville facility and add new, state-of-the-art equipment. The expansion is expected to be completed by the end of 2027

Original Article found in The Post and Courier

By David Wren | May 14, 2023