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INDUSTRIAL MARKET REPORT

Q4 MARKET SNAPSHOT

Q4 CONSTRUCTION & DELIVERIES

Q4 TRENDS & HIGHLIGHTS

• CHARLESTON’S INDUSTRIAL MARKET IS POISED FOR CONTINUED GROWTH IN 2026.

• VACANCY FINALLY IS ON THE DOWNWARD TREND WITH LEASING DEMAND STRONGEST IN FUNCTIONAL MID-SIZE SPACE RATHER THAN BIG BOX.

• THE INDUSTRIAL SERVICES SECTOR CONTINUES TO DEMONSTRATE STRONG RESILIENCE AND REMAINS AN ATTRACTIVE ASSET CLASS FOR BOTH INSTITUTIONAL INVESTORS AND USERS.

• THE IOS MARKET IS STABLE AND SUFFICIENTLY SUPPLIED.

• SC PORTS AUTHORITY APPOINTED MICAH MALLACE AS THE NEW PRESIDENT AND CEO, BRINGING A NEW PERSPECTIVE AND LEADERSHIP TO CHARLESTON’S FUTURE.

THE TIDE HAS TURNED FOR CHARLESTON’S INDUSTRIAL MARKET GOING INTO 2026

Q4 RECAP

• Vacancy declines to 16%, after three consecutive quarters of hovering above 17%, thanks to a renewed economic confidence in domestic markets, global tariffs that stimulated offshoring and reshoring.

• Leasing activity picks up in Q4 with new requirements and previously on-hold prospects reactivating their search in the market.

• Rental rates flattened as landlords leaned on concessions to secure transactions, specifically for bulk warehouse product.

• Rushmark delivered the first phase of Berkeley Commerce Park in Summerville in Q4 and Portman’s new development, Summerville Logistics Center, is nearing completion of a two-building speculative development. After these projects fully deliver, we will see limited speculative construction throughout 2026.

• Charleston continues to see capital investment from the aerospace and defense sector. Major 2025 announcements and transactions include Keel and Eaton.

• Sales transaction activity in the owner operator buyer category showed higher velocity over the course of the year, especially in sizes 50,000 SF and below.

IOS MARKET HOLDS STEADY

• Demand for industrial outdoor storage in the Charleston region during 2025 was driven primarily by construction materials, infrastructure contractors, and equipment rental users.

• Charleston’s IOS market is appropriately supplied, as barriers to entry including entitlement complexity, infrastructure requirements, and limited well-located industrial land continue to prevent overdevelopment.

• IOS land values in Charleston largely held steady or experienced only modest compression on lease rates, outperforming other Southeast logistics markets due to geographic constraints, higher development costs, and zoning limitations that restrict new competitive supply.

2026 OUTLOOK IS OPTIMISTIC

• Charleston has long maintained a balanced ecosystem of manufacturing, distribution, and defense-related industries, and 2026 is poised to accelerate demand across all three sectors.

• Infrastructure investment is key, with proposed funding initiatives and active highway, port, airport, and data center projects acting as catalysts for industrial demand.

• New leadership at the port, along with ongoing infrastructure investments, positions Charleston for continued long-term growth.