Spartanburg developer looking to capitalize on Charleston area industrial boom

An Upstate firm wants to build one of the Charleston region's largest distribution centers to capitalize on the industrial growth spreading along the Interstate 26 corridor in Berkeley County.

Johnson Development Associates would build the 829,000-square-foot building on a nearly 91-acre site along Old Dairy Road in Jedburg, on the eastbound side of I-26 near the Charleston Trade Center and a former Piggy Wiggly distribution hub. The building's size would be eclipsed only by the 1.1 million-square-foot TBC Tire distribution site across the interstate.

Spartanburg-based Johnson Development has filed a permit application with the Army Corps of Engineers to fill about 8.2 acres of wetlands at the site. In exchange, the developer has agreed to buy credits in a wetlands mitigation bank. A spokesman for the developer could not be reached for comment last week.

The speculative project — meaning the developer has not lined up a tenant for the building — is part of a boom in such development in the Charleston region, particularly along I-26 near Volvo's $1.1 billion manufacturing campus in Ridgeville.

The Swedish automaker plans to begin production of a remodeled S60 sedan this summer.

Also driving speculative development of industrial space is increased cargo volumes at the Port of Charleston, where a record 1.23 million containers moved through its terminals in 2017. Bigger ships traveling to the port through an expanded Panama Canal and increasing cargo shifts from West Coast to East Coast ports are among the trends driving the increase.

It's all led to the biggest surge in speculative development in the region's history, said Lee Allen of the commercial real estate firm Jones Lang Lasalle.

"The jury is still out, but we are optimistic that East Coast prosperity will translate to Charleston absorption and an overall healthy industrial market," Allen said.

In the last two years, more than 3 million square feet of speculative development have been completed in the Charleston region, with about 60 percent of it now leased. More than 700,000 square feet of speculative space was completed during the 2017 fourth quarter alone.

"The construction and now subsequent announced expansion of Volvo's first North American manufacturing facility has increased speculative development activity in the I-26 North sub-market," Bob Barrineau, Charleston-based senior vice president at the commercial real estate firm CBRE Inc., said in a report.

CBRE says large buildings like the Johnson Development center and a 580,000-square-foot project at the Omni Industrial Campus in Summerville, completed last year by Chicago-based developer Clarius, "may serve as a litmus test for the market's ability to accommodate additional development at that scale."

Johnson Development is familiar with large-scale developments, with projects similar to the Berkeley County building under way in Mississippi, Texas and North Carolina. The privately held company specializes in industrial projects, apartments, self-storage and commercial buildings.