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CHARLESTON OFFICE MARKET REPORT

Q1 MARKET SNAPSHOT

15,670,537 SF

Deliveries $31.73 SF 65,000 SF 0 SF

Rents

Q1 HIGHLIGHTS & TRENDS

• CHARLESTON’S OFFICE MARKET ENTERED 2026 WITH SOLID MOMENTUM, AS LIMITED NEW SUPPLY AND STEADY DEMAND CONTINUE TO SUPPORT MARKET FUNDAMENTALS.

• THE “FLIGHT TO QUALITY” REMAINS A DEFINING TREND, AS TENANTS CONTINUE TO PRIORITIZE NEWER, AMENITY-RICH PRODUCT WHILE OLDER BUILDINGS FACE LONGER LEASE-UP PERIODS.

• SUPPLY OF QUALITY OFFICE OPPORTUNITIES REMAINS LIMITED, HELPING SPUR BOTH NEW DEVELOPMENT AND THE REDEVELOPMENT OF OLDER ASSETS.

• CHARLESTON’S LONG-TERM OFFICE OUTLOOK REMAINS POSITIVE, SUPPORTED BY CONTINUED POPULATION AND JOB GROWTH, A DIVERSE ECONOMIC BASE, AND A DEVELOPMENT PIPELINE THAT REMAINS LIMITED RELATIVE TO DEMAND.

• OFFICE SALES ACTIVITY HAS REGAINED MOMENTUM, WITH OWNER-USER DEMAND CONTINUING AS LARGER OCCUPIERS LOOK TO CONTROL OCCUPANCY COSTS.

FLIGHT TO QUALITY CONTINUES TO RESHAPE CHARLESTON’S OFFICE MARKET

Q1 2026 RECAP

• Overall vacancy compressed to 8.9%, while market-wide asking rents increased to $31.73 per SF. Newer Class A and highly amenitized space continues to command premium pricing, with select full-service asking rates ranging from the $50’s to $60’s per SF.

• Absorption is expected to remain steady as tenants continue to seek higher-quality, more efficient workplace environments.

• Leasing activity remains selective but stable, with demand concentrated among users seeking highly amenitized space. Notable lease transactions include:

- RMF Engineering at 115 Central Island Street for 18,600 SF;

- KBR expansion at 2155 Eagle Drive, for 20,800 SF;

- Taylor Law Group sublease at 100 Calhoun Street for 10,500 SF.

• South Carolina announced $9.12 billion in capital investment and more than 8,100 new jobs in 2025 reinforcing the state’s growing population and workforce growth, which will drive future office demand.

NEW CONSTRUCTION & REDEVELOPMENT IS UNDERWAY

• Construction is underway at Magnolia Landing, a 192-acre mixed-use development along the Ashley River. Phase I will bring approximately 100,000 SF of office space and is anticipated to deliver Q1 2028.

• The final phase of Courier Square has been approved, continuing the project’s mixed-use expansion on the peninsula and reinforcing confidence in downtown office and retail demand.

• Plans for Flagship 2, located at the corner of Morrison and Romney, are underway driven by the leasing success at Charleston Tech Center.

• With quality office opportunities limited, owners and developers are increasingly evaluating repositioning opportunities within existing office assets, including prominent downtown buildings such as 200 Meeting Street.

• Three Sisters buildings, an adaptive reuse development within the Navy Yard, is scheduled to deliver Q1 2028.

• Charleston’s population, household, and labor force growth continue to outpace many markets and support long-term occupier demand.

MEDICAL OFFICE DEVELOPMENT ON THE RISE

• Medical office development continues to accelerate across the region, driven by new hospital projects, health system expansion, and the ongoing realignment of medical practice groups.

• The current pipeline for non-healthcare institution backed MOB’s totals approximately 90,000 SF.

• The Hub Building 2 recently delivered adding 20,000 SF with Roper St. Francis occupying 3,500 SF. Building 1 is currently under construction and will add 30,000 SF. The two-story, mixed-use building is anticipated to deliver Q1 2027.

• Towne @ Cooper is well positioned to capture demand generated by continued growth along the Clements Ferry / Point Hope corridor.