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Distribution & Logistics

Warehouse project helps fill demand for distribution space

Distribution & Logistics
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The largest single industrial building in the Charleston market is in the works on a plot of land near the Port of Charleston’s Leatherman Terminal. This development could help alleviate backup at the ports as it handles an unprecedented volume of traffic, prompting continued demand for warehouses and distribution centers.

Dalfen Industrial, a Dallas-based developer of industrial real estate focusing on last-mile property, has purchased 104 acres of land at Palmetto Commerce Parkway and Collins Road. The plan is to build a 1.3 million-square-foot industrial space for a manufacturing or distribution tenant.

Dalfen said it will begin construction on the building in the third quarter of 2022 and complete it sometime next yer. Located 2.5 miles from the airport and roughly 14 miles from the port, the building will include 471 trailer spaces and 986 parking spots. 

Tyler McElroy, director of development for the Southeast at Dalfen, said potential tenants have enquired about the site. He expects a Fortune 500 company that needs to be near the port to be the best fit. 

Given the strength of the Charleston industrial real estate market, Dalfen is confident it can lease the building, even while it runs into construction cost and interest rate headwinds. It fits Dalfen’s model of building last-mile infill industrial in business-friendly markets near ports and rail service.

“The uniqueness of the site, proximity to the port in a business-friendly state are all the factors we need to succeed right now,” he said.

This is the second record-breaking, speculative industrial project near the port in the last few weeks. Citimark Realty and Pure Development announced just a few days earlier that they were building a 1.1 million-square-foot industrial development on 131 acres near the Jedburg Road exit of I-26 in Summerville. 

That project, known as Crossroads Logistics Center, is scheduled for completion later this year. High demand for industrial space from retailers moving goods through the ports and a lack of supply of cross dock facilities are driving these speculative projects. 

Ports spokeswoman Liz Crumley said developments like these are desperately needed for importers and exporters with supply chain issues. Imports through the ports are up 16% this year, and cargo volume has increased for 13 consecutive months.

“Modern warehouses with ample capacity and access to infrastructure (highways, rail and locations near the port) support customers’ needs as record cargo flows through the Port of Charleston,” she said.

Other major warehouse developments include Walmart’s new 3-million-square-foot import distribution center in Ridgeville, which officially opens April 22. That currently stands as the single largest industrial property in the region.

McElroy says Dalfen has consulted with Charleston County, the city of North Charleston and the State Department of Commerce about the investment, the type and size of building for the location and the kind of tenant that would be the best fit. 

“Everyone sees this as having the possibility of bringing significant jobs,” he said

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