The turn is here: vibrant commercial real estate development abounds in Downtown Charleston By Dan T. Henderson, Jr.

The Charleston Mercury

Published: Wednesday, May 2, 2012 1:00 PM EDT

On Saturday, I started my day with an early spin class downtown. The only available street parking was more than a half a block down King Street past Wentworth Street, where I parked in front of the old Abercrombie & Fitch, which is now the new Anthropologie Store. To the left at Charleston Place, the new Kate Spade store will be opening soon. I walked King Street to Marion Square to the Farmers Market. The walkways between the vendor’s booths were full of shoppers of all ages. In the scheme of things, the Farmers Market is a small but an important part of the vibrant retail activity in Downtown Charleston. The Farmers Market brings all ages together creating a genuine sense of community.

As Susan Lucas often reminds readers, there are so many positive changes on King Street, especially the upper side past Calhoun Street. It seems to be a nice mix of national and local retail stores and restaurants. Charleston has come so far in the last 30 years that it is now an international shopping destination, and King Street is the epicenter.

John Tecklenberg is a commercial real estate broker with Clement, Crawford and Thornhill. Previously, he was the city of Charleston’s director of economic development, and he believes the revitalization of King Street is the result of the streetscape improvements — a movement led by the city of Charleston and the result of foresight on the part of Mayor Joseph P. Riley, Jr. The results have taken more than ten years to become apparent.

“The mayor always pushed the idea: If we could bring vitality to the streets and have pedestrian traffic, it would bring an overall increase in economic benefit and increase the quality of life,” Tecklenberg added.

Mr. Tecklenberg has a special appreciation for Downtown Charleston’s commercial real estate. He grew up hearing tales of his own family’s grocery store, which was in operation on the corner of St. Philip and Wentworth streets from 1867 to 1940 — from the end of the War Between the States to the early days of World War II.

“2012 will be the turning point; the main reason is the new commercial development that is occurring.”

“The new office, apartments and the hotels, no projects of this scope were occurring over the past five years, and all of a sudden they are happening.” “We have not had the vitality and life in the market that we are now starting to see,” Tecklenberg said.

The commercial real estate sales market in Downtown Charleston came to a halt in mid 2008. The only activity was small shop retail and office leasing. By the end of 2009, only 12 commercial units real estate sales closed, down from 26-units in 2008. Also, in 2009 there were 128 months of available commercial inventory in the downtown market for sale.

From 2005 to 2007 there were many new projects proposed for development, but the plans were quickly abandoned due to the economic downturn. Today, many of the projects have been reinvented for today’s market; some have new owners and new plans.

Many hotels are being added to the downtown market. At Spring and King streets, Atlanta’s Regent Partners are building a 200-plus room hotel with approximately 20,000 square feet of retail space. At 425 Meeting St., a new Holiday Inn is underway with approximately 120-rooms. The hotel planned on the former Charleston Library site is currently tied up in litigation over zoning changes. The newly renovated Courtyard by Marriott at Meeting and Calhoun streets has added 50-new rooms.

Atlanta’s Dewberry Capital owns the former L. Mendel Rivers Federal Building on Meeting St. According to their Web site, they will open their first hotel under the Dewberry flag in the fall of 2013. A 161-room, four-star-plus hotel will feature restaurants, bars and extensive banquet and meeting facilities. It will also feature a rooftop spa, pool and fitness center with views of the Ashley and Cooper rivers.

Another new addition is 7 Calhoun St., a hybrid “condotel”; it includes 75-room luxury hotel and 47-residential units. The residential units can include all of the luxuries of fine hotels, including spa services, housekeeping and room service. Wally Seinsheimer and his partners launched with a “revolutionary” theme, further emphasizing how unique their hybrid facility will be.

In a multidimensional old-meets-new fashion, the former Maison du Pré Inn at 317 East Bay St. sold to Dean and Lynn Andrews. Recall that Dean was the first managing director of the Charleston Place Hotel. The Andrews plan to open the grand buildings as a boutique hotel. The circa-1804 property includes three houses and two carriage houses. The properties sold for $3.2 million. The listing agent was Jane Smith Smith of Carriage Properties and the Andrews were represented by Mona Kalinsky of William Means Real Estate.

Locally based Greystar Real Estate Partners has started construction on a 200-unit mid-rise luxury apartment community with an additional 6,887 square feet of ground level retail space located at Meeting and Spring Streets.

In September 2011, Durlach Associates and Holder Properties opened 25 Calhoun St., a 63,000-square-foot class “A” office building; as of today only 7 percent remains vacant. At 466 King St., 55,000 square feet of commercial office space are under construction for the future home of PeopleMatter.

This new commercial real estate development activity proves that Downtown Charleston commercial real estate market is moving forward from the economic downturn of the past. The demand is here for new hotels, office and retail spaces, and the private sector is stepping up to deliver inventory into the market.

Dan Tompkins Henderson, Jr., CCIM, is the broker/principal of CCBG Real Estate Group, LLC located in Mt. Pleasant. He is a board of director member of the Charleston Trident Association of Realtors; he has served the association in numerous committee and board positions and currently is the president-elect of the commercial industrial division of the association; he may be reached at danh@ccbgrealestate.com.

Photo caption: Tecklenberg’s Grocery store on St. Philip and Wentworth streets. Photo courtesy of John Tecklenberg.

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