Keep a close watch on retail and residential development in Charleston, S.C. But don't blink — it may spurt ahead even faster.
Charleston is ranked among the top 10 U.S. retail markets to watch, according to a 2007 Sperry Van Ness report, which predicts the city will be a magnet for upscale retailers due to new residents from the East Coast who bought primary or secondary homes here.
In the coming year, the report noted, average household income in Charleston will rise 5.4 percent, and the population should grow 1.6 percent. Retail completions will surpass anticipated absorption for the year, pushing vacancy down to 8.9 percent from 9.3 percent in 2005. Rents will continue to increase and should rise 3.2 percent over 2006 to an average of $12.22 a square foot, SVN reported.
"The retail demand here is tremendous," asserted Clint Kelly, sales manager of a new condo and retail development in Charleston called the Cigar Factory. "Everything has been completely revitalized downtown."
Charleston's thriving tourist industry also is driving the economy, observed Jonna Palmer, communications and marketing director of the Charleston Metro Chamber of Commerce. "One of the top reasons people come into Charleston is for the shopping," she said. "Out in the county, there is more of a traditional mall mind-set — they're more department-store minded. Downtown is more boutique-ish."
The city of Charleston sprawls into three counties — Berkeley, Dorchester and Charleston. The metro area includes more than 500,000 people.
The city's downtown sits on the Charleston peninsula, claiming more than 100,000 people. Traffic into downtown Charleston has increased 18 percent since 1997, and more people has meant a swelling of retail sales. Even though the growth rate slowed somewhat last year, two out of three counties saw increases. Berkeley County had an 11 percent gain last year and Dorchester County sales expanded 4.3 percent. Charleston County's gross sales totaled $13 billion in 2007, unchanged from 2006, according to the Charleston Metro Chamber of Commerce.
The peninsula is being revitalized as a new generation moves in and renovates historic houses. That residential rebirth is the engine behind the upper King Street retail revitalization. A 2003 commercial market analysis by the Gibbs Planning Group of Birmingham, Mich., estimates there is room for another 745,000 square feet of retail and restaurants along the King Street corridor. The region has about 15 million square feet of retail shopping center space, including the outer suburbs.While traffic in the busy port, the fourth-largest in the U.S., fell more than 10 percent in 2007 due to the nation's housing slowdown and capacity constraints, an expansion is planned. Job growth in the region also defied national trends, with 10,045 new jobs created in 2007, according to the Charleston Chamber. Job growth was in the business and professional services sector, along with education and health, government and retail.
Charleston real estate was hurt by the national economic downturn, with residential building permits dropping 25.6 percent last year from 2006. However, the average selling price of homes sold last year increased 3.2 percent, to $300,446 from $291,056.
A burgeoning retail center along upper King Street — blocks north of Charleston's historical retail base — was spiffed up with a $13 million streetscape project including bluestone sidewalks, buried utilities, new lamp posts, trees and brick crosswalks. The new look paves the way for retailers being courted by the city.
Another project will begin next year on Spring and Cannon Streets, which are key commuter routes. As more people move downtown two-way traffic will be instituted to promote further retail development.
"There is lots of interest in that area," said Stephanie Yarborough, director of economic development for the city. "It's more like a Soho district."
Home to retailers such as Felice Designs, a jewelry shop; Wonderland, a baby boutique, and apparel store Ellington, the city is trying to bring national retailers like Restoration Hardware and Crate and Barrel, Yarborough said.
A $150 million hotel, condo and retail project by Atlanta-based Regent Partners on upper King and Meeting Streets also is expected to be a catalyst for renewal. The 4.3-acre project, expected to begin this year, will include 35,000 square feet of retail space.
Further west on East Bay Street, a former cotton mill and cigar factory on the National Register of Historic Places is being converted into condos, office space and 40,000 square feet of retail by the Simpson Organization of Atlanta. Almost half the condos, ranging in price from $380,000 to $1.4 million, have been sold, primarily to people from the Northeast looking for second homes, said Cigar Factory's Kelly.A 29-unit residential and retail development, dubbed Midtown, is half sold out, said developer George Reavis. Prices range from $459,000 to $750,000, and the modern take on traditional Charleston houses is "appealing to a hipper sort of crowd," he said. "As more people move into our neighborhood, there will be more of a demand for mom-and-pop boutiquey-type shops."
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