Daniel Island's 'Robust' Marketplace - Commercial sector continues to evolve

ORIGINALLY PUBLISHED IN THE DANIEL ISLAND NEWS. WRITTEN BY: ELIZABETH BUSH

Island Park Drive on Daniel Island continues to be a site of development. Lat Purser & Associates is planning two commercial buildings (873-877 Island Park Drive), right across from Central Island Square, to house office and retail establishments.

The evolution of Daniel Island’s downtown area is nearly complete – with just a few buildings yet to be constructed. In August, Pete Harper, a commercial real estate broker with Lee & Associates, told The Daniel Island News that the island currently has a 90 percent occupancy rate for office space and 98 percent for retail. Those numbers have remained relatively the same, he noted this month.

All in all – approximately 1.7 million square feet of commercial space has been completed since the island’s inception, according to Harper’s calculations, with another 620,000 square feet yet to be built. Ultimately, the island will be home to about 2.3 million square feet of office and retail property.

Commercial projects in the pipeline include 873-877 Island Park Drive, which will add 33,000 square feet of new retail and office space to the Publix shopping center area. Look for construction to begin on those buildings before the end of the year. A second Blackbaud office building is coming to its headquarters campus on Fairchild Street. A construction timeline for that 175,000 square foot project, which will also include an associated parking deck, has yet to be announced. According to Harper, other projects likely to commence in 2020 include the expansion of the Benefitfocus campus with an additional 165,000 square feet in office space, a possible Publix enlargement, and a new mixed-used, performance venue at 890 Island Park Drive. Also look for the future development of a new retail/office/residential complex at the site of the MUSC Health Stadium complex, which was purchased by Holder Properties this year. And lastly, the East West Partners project known as The Waterfront, to be located at the end of River Landing Drive along the Wando River, is already underway.

Harper believes the island’s “town center concept” is on the cusp of coming to fruition.

“It’s realized now, but give it five years and it will be off the charts growth in terms of the quality of the retailers, the quality of the office tenants, the price appreciation of residential - it’s all coming.”

Mike White, broker-in-charge of Charleston Industrial LLC, and owner of several commercial properties on Daniel Island, describes the current business climate on the island with enthusiasm.

“It’s an extremely robust market,” he said. “And a great success story on so many levels. All of our buildings remain full.”

White owns multiple commercial spaces at 225 Seven Farms Drive. A tenant that vacated the building recently was quickly replaced, he said.

“That’s been something we’ve owned for the last six years or so and we’ve kept it right at 100 percent for a very long time,” continued White. “Essentially since the time we bought it.”

His newest building, 146 Fairchild Street (next to the Hampton Inn), is the oldest commercial office building on the island and has recently been rebranded by White and his team as “The Headquarters Building.”

“We’re down to just two suites left after buying it at about 40 percent occupied. We’re at 90 percent in the space of five months. And we have a couple of strong prospects to take the balance.”

All in all, the island remains an attractive location for business prospects, continued White, especially people looking for smaller spaces.

“They can’t really always work from home and that means the need for smaller space, executive space, start up space, incubator space, any moniker you want to give it, there’s just a very strong base of demand for the smaller office suites on Daniel Island. And that’s really an indication of a very healthy marketplace.”

While most residential and commercial properties are expected to be at full build-out in three to five years, White thinks it might take just a bit longer for all to be complete – due to the multi-phase construction on the East West Partners project, as well as the new Holder Properties development on space now occupied by the MUSC Health Stadium complex and the former Blackbaud building on Daniel Island Drive.

“I will tell you there is probably a five to 10 year horizon for Daniel Island and continued growth and then there will also be some repurposing,” he continued. “We still have a few office buildings that are owned by out of town corporations and I think they will eventually change hands to be owned by locals, which is what we like to do and I think is very, very healthy for the island – to have commercial properties owned and operated by the same people who live, invest and care most about Daniel Island.”

“I think Daniel Island is just starting to come together,” added Harper. “It’s 22 or 23 years old...Give it another 10 years and this is going to truly be a town where people want to live and work…I think the whole vision of what Daniel Island was meant to be is finally happening.”