Mar
27

Charleston Retail Market Overview

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CHARLESTON, S.C. RETAIL MARKET

Charleston’s active port has laid a strong foundation for the city’s future economic growth. “Charleston is becoming one of the premier ports on the Eastern Seaboard,” says Mark Taylor, director of commercial real estate for Charleston-based The Beach Company. “In the next few years, port activity is expected to more than double.” Charleston’s port is known for its geology, which allows for larger ships to dock than many other well-known eastern ports, such as Jacksonville. The Goose Creek area, in particular, has benefited from the busy port with increased job growth, which impacts residential needs and inevitably the retail that follows. Colliers Keenan reported at mid-quarter approximately 500,000 square feet of retail space was proposed for Goose Creek and job growth was on track to make its highest gain in 7 years.

Several retailers have taken advantage of Goose Creek’s burgeoning popularity. Lowe’s opened a store on St. James Avenue during the first quarter of last year, and the approximately 400,000-square-foot Red Bank Shopping Center opened on Red Bank Rd. in the fourth quarter. Near downtown Goose Creek, the Carnes Crossroads master-planned community by The Daniel Island Company is proposing more than 300 acres of dedicated commercial and office space. “There is a lot of activity within the commercial brokerage marketplace,” says Brian Aiken, a principal of Coldwell Banker Commercial in Charleston. “Most people have clients who are interested in the area.”

As mentioned last year, Avtex’s The Market at Oakland continues to make a big impact on the greater Charleston area. The property features 415,000 square feet of retail space, anchored by an 89,111-square-foot Kohl’s and an 184,000-square-foot Wal-Mart Supercenter. Developers are flocking to the burgeoning corridor. “Within a 3 or 4 mile radius, the Mount Pleasant, Highway 17 corridor is the most active region,” Taylor says. A new Mercedes-Benz dealership and a shopping center featuring Dick’s Sporting Goods, Staples and Harris Teeter are planned for the area. Also in Mount Pleasant, Watermark, a mixed-use development by The Beach Company will feature 8,000 square feet of first floor retail and 10 acres of land on which the Mediterranean Shipping Company will build its headquarters. The project is located in the Bowman, Rifle Range corridor at the intersection of Watermark Boulevard and Appling Drive.

Fairfax, Va.-based Republic Land is planning Carolina Park, an ambitious master-planned mixed-use community located in the busy Mount Pleasant corridor. The development is situated on 1,708 acres, adjacent to the East Cooper Airport, and will feature 1.35 million square feet of regional and service-oriented retail surrounded by natural greenways and screened parking. The development will also include a new hospital set to break ground in July, a 3.4 million-square-foot business park and 977 acres of residential land. Negotiations are underway for a department store, home improvement store and pharmacy. The project is valued at $1 billion and scheduled for completion in 2025.

Near the Charleston historic district, Daniel Island has been under development for the past 10 years. Hill Partners is planning The Town Center at Daniel Island, a $200 million mixed-use, open-air lifestyle center geared toward the growing Charleston population and its multi-billion dollar tourism industry. Town Center will feature 420,000 square feet of destination, specialty and lifestyle retail, restaurants and cafes in a pedestrian-friendly setting. There will also be a 480-unit residential component and mid-level hotel. Currently in the predevelopment and leasing phase, the project is proposed for a spring 2010 open.

Centre Pointe Developers are building The Shoppes at Centre Pointe, which will be adjacent to their Tanger Factory Outlet in the mega-successful Centre Pointe development at the intersection of International Dr. and Tanger Outlet Blvd. Phase 1 includes 139,300 square feet of retail and restaurants, with Ashley Furniture and Staples as anchors. Chick-fil-A and IHOP are on freestanding parcels. Phase 2 is projected to have 160,000 square feet of retail with a 10,000-square-foot outparcel building under construction. Hardee’s, First Federal Bank and Jim N’ Nick’s Bar-B-Q will be outparcel users. Currently, phase 2 is preleasing.

According to Mark Taylor, the future of Charleston retail will be greatly impacted by the looming subprime mortgage crisis, “I think [development] is going to slow down,” he says, “and the primary reason is because the debt capital that is available for development is going to slow down.” Charleston previously experienced an explosive amount of growth, and Taylor forecasts that economic growth will slow as real estate liquidity continues to tighten. Conversely, Aiken concedes that Charleston has been on an aggressive pace, but says, “Trends are fairly steady, but I do see developers trying to find a balance between the cost of land, the cost to construct and the rental rates that retailers are trying to absorb in the market. I think land costs will loosen up, which will be a welcome change.”

Like its Carolina neighbors, Charleston has enjoyed unbridled economic growth as people are drawn to the temperate climate of the Carolinas, the quality of life and job availability. At present, most new developments are moving forward and the port continues to keep a steady flow of new business streaming into the city.

— Jia Gayles

http://www.southeastrebusiness.com/articles/MAR08/cover1.html

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