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Second Quarter | July 2015 Newsletter

PREPARED BY:Coldwell Banker Commercial

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3506 W. Montague Ave. Suite 200

Charleston, SC 29418

(843) 744-9877 www.cbcatlantic.com

CHARLESTON | SOUTH CAROLINA

The LooP

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• Marlena Franklin, CCIM of Coldwell Banker Commer-cial Atlantic, represented the Buyer, Anthony Pope Properties, LLC, in the Sale of a 5,800-square-foot of-fice building at 3044 Hwy 17 North for $1,167,500.

• Kristen Krause of Coldwell Banker Commercial Atlan-tic, represented the Seller, CharlesTowne, LLC, in the Sale of a 3,490-square-foot four-plex investment prop-erty at 121 Spring Street in Downtown Charleston for $655,000.

• James Warrington of Cold-well Banker Commercial At-lantic, represented the Seller, Buffalo Creek Land Compa-ny, LLC, in the Sale of a 0.98 acre carwash at 105 Midland Raceway in Summerville for $350,000.

• David Mantek of Coldwell Banker Commercial Atlan-tic represented the Tenant, Paper Chemical Supply Company Inc, in the Lease of a 10,500-square-foot Indus-trial Building at 2568 Oscar Johnson Drive in North Charleston.

RECENTTRANSACTIONS

A WORD FROM OUR PRESIDENT, BRENT CASEThe Charleston, South Carolina commercial real es-tate market continues to charm the world as people and businesses flock here. The economy is thriving, Downtown in particular is bursting at the seams due to the tourism industry accompanied by new hotel devel-opments and a larger daytime-workforce population. According to The Bureau of Labor Statistics data, the total non-farm employment is up 3.6% from 12 months ago. Over the next two quarters we will see real estate vacancy rates lower, while rental rates increase.

We experienced many business events over the last quarter such as The Charleston Regional Business Journal’s Power Break Series, Chamber gatherings, and the North Charleston Business Expo. In April the North Charleston Business Expo debuted and brought 175 busi-nesses together to network and generate leads. Mark April 21, 2016 on your calendar, it has been announced as next year’s Business Expo date.

During the last quarter several monumental announcements were made. One being Mercedes-Benz and Volvo collectively are investing $1 billion dollars in South Carolina. Volvo has selected South Carolina as home to its first ever U.S. plant. Boeing also made headlines when they an-nounced that South Carolina will be responsible for building more parts for Boeing jets as aerospace supplier GKN Aerospace plans an expansion in Orangeburg County. We look forward the third quarter and continuing this upward economical trend.

For more information on the commercial real estate market or available properties, you can reach Brent Case at bcase@cbcatlantic.com or by phone at 843-725-6255.

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MARKET WATCH:

MULTI FAMILY BY JOHN TRUE

90-3 Society StreetRetail/Residental

Lease Rate: $2,500MLS: 1500953

Kristen Krause 843-518-6674

4515 Spruill AvenueMedical Office

Lease Rate: $22.00/SFMLS: 1500221

Kathleen Boswell 843-725-6895

1256 Old Gillard RoadRetail/Land

Sale Price: $600,000MLS: 1500916

Mike Rose, CCIM 843-725-6391

With the influx of new jobs and an expanding retiree sector, the Charleston metro multifamily market contin-ues its strong demand and for new development. Al-though the demand is at its peak in the past few years, the short-term absorption rate may dip due to the units that under construction and deliveries of these units.

With the major announcements in the job sector, in-cluding the addition of Volvo and Mercedes-Benz who

Photo Credit: Post & Courier

will be collectively investing $1 billion in their new plants and creating approximately 3,500 news jobs. Demand for housing will remain strong for the foreseeable future.

Today’s new developments are a far cry of what the current inventory has to offer. Developers are maximizing common space to appeal to a new type of renter and their wants and needs. Resort style pools, theatres, WiFi, bike storage stations, car wash/pet wash and some even incorpo-rate concierge services for its tenants.

So far in 2015 we have seen six multifamily communities totaling 1,242 units trade for collectively $156,900,000. Several other communities are under contract and poised to be traded before the end of the year. The Charleston Metro multifamily market continues to be on the radar of many national developers and asset managers.

For more information on the Charleston market or available properties, please contact John True at jwtrue@cbcatlantic.com or by phone at 843-568-3140.

AccolAdes

“2014 Best American Cities for FoodiesCharleston ranked #4 by Conde Nast Traveler”

by Conde Nast Traveler

“Charleston ranked #11 as Top Per-forming Cities in the U.S.”

by Business Insider

“Charleston voted #13 in the 2014 as Best Destinations in the U.S.”

by Trip Advisor

“Charleston listed as Best Places to Retire”by Forbes

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OFFICE BY TRADD VARNERCharleston continues to be an attractive option for Technology, Biomedical, Manufac-turing, Tourism and Trade related industries. Tech related jobs are estimated to ac-count for 3.2% of Charleston work force and anticipated to climb to 5.6% over the next few years. I anticipate a continue demand for live-work communities to house many of these businesses and employees. Charleston’s real estate market is very much in the expansion phase of the cycle, we are seeing decreasing vacancy rates, moderate new construction, and moderate rental rate growth.

By the numbers, the Charleston office market has taken a step back from the previous 3 quarters, posting surprisingly low data. Through the first two quarter of 2015 we have seen a steep decrease in both the number of transactions and square foot

age absorbed. I believe this not to be a sign of a weakening market but rather an indication of the short supply of suitable Class A & B Inventory. According to CMLS Data office sales totaled $6,613,500 (14 transactions), representing 43,627 square feet at an average of $153.00 per foot. During the same period a total of 199,729 square feet of office (78 transactions) were leased, down 7% from the previous quarter transactions and down 18% in square footage leased.

For more information on the Charleston market or information on available property, you can reach Tradd Varner at tvarner@cbcatlantic.com or by phone at 843-725-6897.

LAND BY JAMES DINGLEUnder All Is LAND As real estate is to “location, location, location” Land is, too. Especially when there is a limited supply that does not meet the high demand taking place in the Low Coun-try. The scramble is on and developers, investors, builders and average speculators alike are making multiple offers on the little left overs on smaller parcels near the desirable areas in town, while bigger tracts, say over 10+ acres in the not so called desirable areas are moving just as quick without listing agreements being discussed. Last year this time, most areas witnessed a steady increase of active listings of 15.4%. New listings YTD is also experiencing a surge with two quarters of the year left to go.

Wadmalaw Island increased a whopping 90% sold YTD and Summerville increased well into the triple digits percentage growth margins. North Charleston/Summerville outside Highway 526 is exploding with record sale volumes from a nominal standpoint.

While this solid growth pattern continues, my recommendations to the average land owner with 10+ acres, is to get an up to date land appraisal from someone certified and familiar with your area, also know the development and zoning changes within a ten mile radius of your property. If they build on it they will eventually come, but under all that is still Land.

For more information on the Charleston market or available properties, you can reach James Dingle at jdingle@cbcatlantic.com or by phone at 843-822-4311.

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RETAIL BY KRISTEN KRAUSEAs the Retail market continues to expand in the Downtown Peninsula area, it is imperative for clients to have a business plan that matches the trends for a successful business model. As retail lease rates con-tinue to soar on many of the most significant and well-traveled streets of Downtown, it’s important to work with an expert Realtor who under-stands not only the real estate mar-ket, but can also consult individual businesses on where a business location based on strategy and trends, will be most successful.

Cap rates for mix–use properties are also becoming increasingly popular and many demands are com-ing from both local and out of state investors to the Charleston peninsula.

Recent retail trends show congregation on the Upper Peninsula and around town. Below are several new shops that opened this last quarter:

• Revelry Craft Brewery10 Conroy Street Great gathering spot for sport fans, local and travel-ers

• Smoke BBQ & Bar 487 King Street Locals, Chefs and tourist are lining up down the street for the unique flavors of one of the best BBQ spots on King Street.

• Candlefish 71 Wentworth Street It is a place for scent exploration, finding inspira-tion, and learning the art of candle-making.

• Garcia’s Tortilla House 100 Spring Street

As of yet, there’s no listed website or phone number but by far… the best tortillas and breakfast burritos in town.

For more information on strategy and trends in Downtown Charleston market, you can reach Kristen Krause at kkrause@cbcatltantic.com or by phone at 843-518-6674.

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By: Liz Segrist

Boeing South Carolina has been prep-ping its 787 Dreamliner campus in North Charleston for 787-10 Dreamliner production, according to Larry Loftis, vice president and general manager of the 787 program.

In the aftbody building, tools are being developed and automated fiber place-ment machines are being set up for the production of the newest and longest Dreamliner derivative. The 787-10 aftbody section will be about eight feet longer than the 787-9 aftbody.

Tools are also being revised for 787-10 midbody work. The stretched Dream-liners’ midbody section is about 10 feet longer than the 787-9.Loftis said Boeing South Carolina’s

final assembly operations are equipped to handle the 787-10 work beginning in 2017. The final assembly building in North Charleston was initially designed with additional capacity in mind. There are no plans to expand it or change it from a single, U-shaped assembly line to two assembly lines, Loftis said.

“Frankly, the commonality between the dash-9 and dash-10 is really going to set up final assembly well from the stand-point of wing to body joint. ... All the major joints are the same,” Loftis said during a recent media event at Boeing offices in Seattle.

“All we’re really doing is 18 more feet of interior, more bins and seats, but the same type of process.”

The 787-9 and 787-10 mostly share the same supply chain. Loftis said a few changes occurred between the models but declined to name the percentage of suppliers shared.

Boeing South Carolina will be the sole producer of the 787-10 since its mid-body section will be too long to be transported efficiently on the Dreamlift-er from Charleston to Everett, Wash., for final assembly. Design of the 787-10 is currently underway in Everett.

Loftis said the 787 program will apply some lessons learned from the 787-8 Dreamliner work to the continued production of the 787-9 and the future work on the 787-10.

When the 787-8 Dreamliner was intro-duced, Boeing South Carolina workers were building planes for the first time, while the 787 program was ramping up to 10 airplanes a month within three years. Loftis said it was the highest pro-duction rate increase for any widebody airplane in aviation history. By compari-son, the 777 program ramped up to 8.3 airplanes a month in 18 years.

To read more click here.

Reach writer Liz Segrist at 843-849-3119

Boeing South Carolina Preps North Charleston Plant for 787-10 Production

Employee Spotlight:

Name: Kip Bowman

Title: Commercial Broker

Specialty: Investment & Land Proper-ties

Experience: Over 12 years in the biz

Favorite News Publica-tion: Wall Street Journal

“Outside of work, you’re most likely to find me...”:“...recreating in the out-doors!”

Let’s Connect:kbowman@cbcatlantic.comLinkedIn