2Q16: Charleston Named "Best City In The World," Retail a Large Factor
CHARLESTON NAMED “BEST CITY IN THE WORLD,” RETAIL A LARGE FACTOR
CHARLESTON, SC (August 10, 2016) Tourism, job creation and sizzling residential growth continue to drive development and strengthen the region’s already booming retail market. Travel + Leisure magazine recently recognized Charleston as 2016’s “Best City In The World” based on six categories, one of which is “shopping and value”. The area has seen job growth, industry development, record tourism and an average of roughly 300 new residents per week. National retailers are continuing to follow suit, investing in the market and leading to an increase in rental rates and decrease in available space.
Q2 vacancy rates showed a decline, evidencing Charleston’s growth and the need for new retail space in the market. We are beginning to see pre-leased retail buildings being delivered to the market with low vacancy rates. The second quarter came to a close with a total vacancy rate of 5.1%, down from 5.2% at the close of the first quarter, and we expect that number to continue to drop. New construction and redevelopment projects are currently underway to meet the demand.
The region’s key industrial drivers played into the retail market this quarter as well, specifically in the aerospace, automotive, and port industries. Recent announcements of manufacturing facilities from both Volvo and Mercedes are expected to drive the area’s economy. Growth will subsequently be seen in the residential, commercial and retail markets. Highlights of the quarter include:
- The ±244,000 SF Cigar Factory on East Bay Street is now more than 95% occupied. Clemson Architecture Center, Rappahannock Oyster Co. and Trunk Club will join dozens of retailers, restaurants and businesses that have moved into the renovated building.
- The founder of Lagunitas Brewing Co., one of the nation’s largest producers of craft beers, announced the company is acquiring an equity stake in what is now Southend Brewery & Smokehouse in the city’s Historic District. It plans to convert the longtime brewpub and restaurant at East Bay and Queen streets into Lagunitas Taproom and Beer Sanctuary.
- 10 WestEdge, a 9 story building, is coming to the corner of Spring Street and Lockwood Boulevard. It will have a ±45,800 SF Publix grocery store on the ground floor with a parking garage and 350 apartments, along with restaurant and retail space. The overall WestEdge development, once completed, will include 580 living units, more than 100,000 square feet of street-front retail and dining space, 135,000 square feet of office and research space and a 2,000-space parking deck.
- The $30 million mixed use plans for the Hughes Lumber site in downtown Charleston were granted conceptual approval to erect a seven-story parking garage bookended by apartments and retail shops on Mary and Reid streets.
- Halls Chophouse owner Bill Hall recently bought two buildings on Upper King Street that house the chophouse at 434 King St. Hall paid $7 million for the two buildings adjacent to one another.
- High-end bridal shop, Betty Bridal Atelier, will open downtown at 463 King Street. The retail shop will bring upscale designer names such as Oscar de la Renta, Peter Langner, Mira Zwillinger and more.
- After nearly 30 years, the former Carolina’s restaurant on the Lower Peninsula will now be occupied by Cirque Salon Studios, a salon and spa. The salon, at 10 Exchange Street, will open in the fall of 2016.
- Café Felix announced it is opening its second location in Charleston at 550 King Street. The French bistro should be serving guests by the beginning of 2017.
- The proposed $1 billion Lorelei project off Charleston’s Upper Peninsula plans are beginning to take shape including retail, restaurants with waterfront patios, locally curated food hall, hotel, offices, upscale apartments, homes, an entertainment venue, and many amenities.
- According to newly released census estimates during the 2nd quarter, Mount Pleasant was the 10th fastest-growing town in the nation among cities with at least 50,000 residents.
- A new retail center proposed for Mount Pleasant is under review. This phase of Indigo Square, between Olive Branch AME Church and Cactus Car wash on U.S. Highway 17, calls for a ±21,535 SF unspecified-brand grocery store and five other buildings ranging from ±3,350 SF to ±9,800 SF around a landscaped parking lot.
- Gwynn’s marks nearly 50 years in business with a nearly $1 million, ±2,000 SF addition to the department store. Owner Marshall Simon aimed for a top-notch shopping experience to match the upscale merchandise in the ±20,000 SF showroom.
- The East Cooper area’s only bowling alley and arcade will soon be replaced by Aldi, a grocery store chain with stores across the globe. It will be the sixth grocery store to open in roughly a two-mile stretch between Houston Northcutt and Anna Knapp Boulevards.
- Specialty culinary retailer Southern Season filed for bankruptcy protection to restructure its debt, days after announcing it would shutter its big-box Mount Pleasant store. The company launched an aggressive expansion in 2012 after successfully running its flagship ±60,000 SF Chapel Hill site for years. Its ±44,000 SF East Cooper store opened in 2013 and closed in July.
- The Charleston area will have its fourth Chipotle, planning to open this fall in front of the Wando Crossing Shopping Center in Mt. Pleasant.
- Women’s plus-sized clothing retailer, Lane Bryant, opened its third Charleston store at the Wando Crossing Shopping Center in Mount Pleasant.
- Whole Foods is planning to open their second location in the Charleston region at the former Doscher’s IGA supermarket.
- The long-anticipated redevelopment of Westwood Plaza Shopping Center will also be the site of a new Harris Teeter. Construction commenced this quarter and the N.C. based grocer is slated to open in fall 2017.
- Revised plans for a new mixed-use development near Tanger Outlets calls for several hundred apartments, a hotel, restaurants, office space and possible sky bridge over International Boulevard as part of a planned entertainment district. The long-envisioned projected is called Uptown.
- Save-A-Lot added its fourth grocery store in the region in the North Charleston space where Piggly Wiggly once operated.
- Pet Supplies Plus has signed a lease for a new store in Goose Creek. The ±11,000 SF retailer will operate at 208 St. James Avenue and should open by this fall in the Publix-anchored shopping center.
- The world’s largest retailer will soon add a fourth store in Goose Creek. Wal-Mart plans to build its smaller-format Neighborhood Market store in the new Carnes Crossroad mixed-use community at U.S. Highway 17A and Highway 176 in Berkeley County.
- BJ’s Wholesale Club will open a new store in Summerville next year, its first in South Carolina.
- Harris Teeter is planning another new grocery store in the Lowcountry, but shoppers will have to wait a few years for it. The Kroger Co. subsidiary said it will build a ±76,000 SF supermarket in the ±4,500-acre Nexton community near Summerville.
- “Nexton Square,” planned for development as a joint venture between WestRock and Hill Partners, has experienced a steady increase in pre-leasing activity as five of the region’s most popular restaurants and boutique shops desire to locate at this thriving population base off of exit 199 in Summerville.
- Arizona-based PetSmart plans to open in the Super Bi-Lo anchored shopping center at 860 Folly Road on James Island by the fall.
- Five new shops are headed to Kiawah Island. Freshfields Village Shopping Center, the main shopping center on the island, will now house Scout & Molly’s, Tres Carmen, Kiawah Nail Studio, Dolittle’s and Fuji Sushi Bar.
- Plans for an upgraded property on James Island show Publix occupying the site at 1411 Folly Road.
- One of the Lowcountry’s largest grocery chains until three years ago has sold off its last remaining corporate owned store in the Charleston area. Piggly Wiggly Carolina Co. Inc sold the supermarket at 6251 Highway 162 in Hollywood to an individual operator. The buyers also have upgraded the store and are marking its reopening this summer. The parent of Piggly Wiggly Carolina sold 13 shopping centers in South Carolina and one in Georgia in a $71 million deal. The closing occurred in the first quarter, a key step in its liquidation plan.
For more information, please contact David Grubbs at email@example.com or (843) 518-5310.
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Contact: David Grubbs, Managing Principal and Broker-In-Charge, Charleston Office, 843-518-5310, or firstname.lastname@example.org