Charleston Commercial Office Space for Rent

Q4 2025

Charleston Commercial Real Estate Market Report

Focus: Q4 2025 Market Trends

Executive Summary

The Charleston commercial real estate (CRE) market in late 2025 is characterized by a "normalization" across key sectors after years of rapid acceleration. The Multifamily sector is entering a more balanced phase, with solid occupancy and moderate rent performance, particularly in Class B and C properties [1, 6]. Industrial activity remains robust due to port drivers, though vacancy has risen to approximately 14.9% as a wave of new supply outpaces absorption [7]. Retail is a standout performer, with vacancy rates tight at roughly 3.3% and high demand for second-generation space [5]. Office fundamentals are recovering, with positive net absorption and rent growth in premier downtown assets [2, 3].

TenantBase Proprietary Data [8] highlights the distribution of active tenant demand over the last 90 days:

  • Retail/Storefront led market activity with 60.27% of all searches [8].
  • Warehouse was the second most active sector at 26.03% [8].
  • Office accounted for 13.70% of total search volume [8].

Office Market

Market Overview Charleston's office market is bucking national trends of distress, driven by a flight to quality and steady demand in suburban submarkets.

  • Vacancy & Availability: The market is stabilizing, with Class A assets in the Downtown submarket seeing vacancies compress as tenants compete for limited high-quality inventory [3].
  • Net Absorption: The market posted positive absorption of 247,000 SF year-to-date in 2025, a massive rebound from the previous year, fueled by larger lease commitments [2].
  • Rental Rates: Class A asking rents are climbing, averaging $34.05 per SF, with top-tier downtown spaces commanding rates near $50.00 per SF full-service [3].
  • Tenant Preferences: TenantBase data reflects a cautious but active tenant base, with 40.00% of inquiries seeking leases of Less than one year [8].

TenantBase Activity [8]

  • Demand Share: Office accounted for 13.70% of total search volume [8].
  • Lease Term Preference: Tenants are prioritizing flexibility:
    • Less than one year: 40.00% of deals [8].
    • 2-3 Years: 30.00% of deals [8].
    • 3-5 Years: 20.00% of deals [8].
  • Size Requirements: The average lower size requirement for office space is 500 SF for short-term leases, increasing to 2,500 SF for 2-3 year terms [8].

Industrial & Warehouse Market

Market Overview The Charleston industrial market is at an inflection point. While long-term drivers like the Port of Charleston remain strong, a wave of speculative delivery has pushed vacancy rates higher.

  • Vacancy & Rent: Vacancy rose to 14.9% in Q3 2025, an increase of 50 basis points quarter-over-quarter due to a lack of pre-leasing in new developments [7]. Despite this, asking rents have remained stable, averaging roughly $7.97 per SF (NNN) [7].
  • Demand & Supply: Net absorption remained positive at 222,000 SF in Q3, but new deliveries (790,000 SF) outpaced tenant expansion [7].
  • Construction: The pipeline has tightened significantly to just over 1.1 million SF remaining underway, which will push tenants toward absorbing existing vacancy [7].
  • Leasing Highlights: TenantBase data indicates strong demand for mid-term leases, with 46.15% of warehouse inquiries for 3-5 Year terms [8].

TenantBase Activity [8]

  • Demand Share: Warehouse accounted for 26.03% of total search volume [8].
  • Lease Term Preference: Demand is concentrated in the 3-5 year range:
    • 3-5 Years: 46.15% of deals [8].
    • 2-3 Years: 23.08% of deals [8].
    • Less than one year: 23.08% of deals [8].
  • Size Requirements: The average lower size requirement for warehouse space is 10,000 SF for both 2-3 and 3-5 year terms, reflecting steady demand for mid-sized distribution space [8].

Retail Market

Market Overview Charleston's retail sector is thriving, buoyed by tourism and population growth. Vacancy is extremely low, giving landlords significant leverage.

  • Vacancy & Availability: Retail vacancy sits at a healthy 3.26%, with strong backfilling activity for any larger spaces that become available [5].
  • Market Trends: Second-generation restaurant space is in particularly high demand. National retailers remain active, but a shortage of quality space is a primary constraint [5].
  • Tenant Interest: Retail dominated search activity in Q4, confirming the region's vibrant consumer economy [8].

TenantBase Activity [8]

  • Demand Share: Retail/Storefront activity dominated with 60.27% of all search volume [8].
  • Lease Term Preference: Retail tenants show a strong commitment to the market:
    • 3-5 Years: 52.63% of deals [8].
    • Less than one year: 15.79% of deals [8].
    • 1-2 Years: 10.53% of deals [8].
  • Top Locations: Tenant interest is highest in North Charleston (7 deals), followed by Summerville (4 deals) and Charleston (City) (3 deals) [8].

Multifamily Market

Market Overview The multifamily market is stabilizing after a period of volatility. While new supply has softened rent growth in the luxury segment, overall fundamentals are sound.

  • Vacancy & Occupancy: Vacancy stabilized in the 9%–11% range, with stabilized occupancy forecast to be 91.9% by year-end 2025 [1, 6].
  • Rents: Rent growth is projected to accelerate to 2.2% by Q4 2025, bringing average monthly rents to $1,790 [1].
  • Construction: Starts have dropped significantly, down 72% year-over-year, which will help rebalance supply and demand heading into 2026 [1].
  • Submarket Performance: Downtown Charleston maintains the highest rents at $2,684/unit, while Johns Island and West Charleston offer more affordable options around $2,042/unit [1].

2026 Outlook

Looking ahead to 2026, the Charleston market is positioned for steady, sustainable growth.

  • Multifamily Tightening: With new deliveries dropping by over 70% in 2025, the multifamily market is expected to see occupancy gains and stronger rent growth in 2026 [1].
  • Industrial Absorption: As the pace of speculative construction slows, the industrial market will focus on absorbing recent deliveries, with vacancy likely peaking in early 2026 before compressing [7].
  • Office Resilience: The lack of new office construction will keep the market tight, supporting continued rent growth for Class A assets as tenants compete for limited space [3].

Sources

  1. MMG Real Estate Advisors: 2025 Charleston Forecast
  2. Avison Young: Charleston Office Market Q3 2025
  3. Colliers: Charleston Office Market Q3 2025
  4. CBRE: Charleston Industrial Figures Q3 2025
  5. Lee & Associates: Charleston Retail Market Report Q2 2025
  6. CBC Atlantic: Q3 2025 Multi-Family Market Report
  7. Cushman & Wakefield: Charleston Industrial MarketBeat Q3 2025
  8. TenantBase Proprietary Market Data (Charleston - Last 90 Days)

Information in this report is aggregated from various third-party sources and synthesized using artificial intelligence and other research tools. While we believe these sources to be reliable, we cannot guarantee the absolute accuracy or completeness of the data. This report is intended for informational purposes to provide market insight and should be independently verified prior to any use in a real estate transaction or legal commitment.