The current commercial real estate market continues to stay steady on Daniel Island, as indicated by a high occupancy rate, according to local brokers, bucking the down-market trend in many areas around South Carolina and the country.
Pete Harper, an agent and broker at Lee & Associates with over 10 years of experience in the Daniel Island market, agrees and he estimates that the growth process will continue for another four to five years. The agent conducted independent research on the absorption rates of retail and office commercial space leased on Daniel Island.
Harper said that 95% of retail space and 89% of office space was occupied at the end of the second quarter in 2020.
“The occupancy rate has remained flat. Very little has changed in the past year,” he said.
COVID-19 did not directly impact the commercial real estate industry on Daniel Island, said Harper, but it limited many of his regular face-to-face interactions with customers for buying, selling, and leasing properties.
“We continue to see very low vacancies in commercial space on Daniel Island. At Charleston Industrial, we’ve collected 100 percent of rents on our properties. That’s a sign of a very good commercial market,” said Mike White, the broker-in-charge at Charleston Industrial, an industrial real estate and manufacturing-based consulting firm located at 225 Seven Farms Dr. on Daniel Island.
However, not much building space is still available on Daniel Island.
“There’s clearly a constrained land supply, and most of the commercial property space has been built out,” said White.
While Daniel Island doesn’t have much room to grow, the existing commercial real estate industry remains strong.
One built-in advantage of Daniel Island is its excellent location. It is 10 minutes away from Mount Pleasant and the Charleston International Airport, and downtown is only a 15- to 20-minute drive.
Harper said the coronavirus caused many seasonal residents to stick around, which resulted in more disposable income for the community.
Construction on the 873 and 877 Island Park Drive buildings broke ground on July 8, where 20,000 square feet of leasable commercial space will be made available.
On 877 Island Park Drive, there is 9,920 square feet of office space available on the building’s No. 2 floor. The first floor will be reserved for retails, with the space totaling 20,000 square feet overall. Lat Purser & Associates from Charlotte, North Carolina, is the developer for the project.
With direct access to I-526, Mike Palmer at Bridge Commercial is leasing 900 Island Park Drive at the intersection of Island Park Drive and River Landing Drive. It is within walking distance of retail and restaurants. Suite 200 has spaces available between 3,600 square feet and 9,000 square feet.
“Daniel Island was one of the best places to be during COVID-19. You didn’t have to leave the bubble of Daniel Island,” White said.
White expects a continued influx from crowded, high-tax cities in the northeast.
“There will be a massive migration from the northeast to the southeast, and Daniel Island will most likely be a beneficiary of that,” he said.
White said that he expects the commercial real estate market to shift due to an influx of residents moving to the Cainhoy area.
“It’s a submarket in transition, which creates opportunities,” he said.
White anticipates an increased number of services geared towards residential home developments off of Clements Ferry Road, such as food services, consumer goods, and banks.
“People will continue to move here and demand services,” he said.
Harper said that Clements Ferry Road is especially advantageous because of its convenient location within the Charleston area.
“It is an in-town location that isn’t really far from anything, including downtown,” he said.
One of Harper’s properties is 2256 Clements Ferry Road, which is home to the Beresford Creek Executive Center.
“Thousands of homes are out at Cainhoy, and they want to be able to get to work quickly. People like to work near where they live,” he said.
An office development located on the Cainhoy peninsula, the Beresford Creek Executive Center has two available buildings with available space ranging between 4,254 square feet to 15,673 square feet in building No. 300 and 1,600 square feet to 21,754 square feet in building No. 400.
Both suites (No. 309 and No. 310) in building No. 300 include a reception room, two conference rooms, training rooms, 13 offices, men’s and women’s restrooms, and a break room/kitchen.
The center is located about 1.5 miles north of I-526 on Clements Ferry Road.
“I’m very bullish. It’s a 20-30 year growth run that’s going to be pretty fun to watch,” Harper said.