Chris Fraser, Principal & Regional Managing Director, South Region & South Carolina, Avison Young

In an interview with Invest:, Chris Fraser, principal and regional managing director for the South Region and South Carolina at Avison Young, discussed the state’s commercial real estate market and the challenge of balancing expansion with infrastructure and quality of life. “Our problem is managing the growth and managing the people,” Fraser said.

How would you characterize South Carolina’s commercial real estate market today?

The South Carolina market is generally solid. We have not experienced the same headlines coming out of major markets such as Chicago, Los Angeles, or San Francisco. We are not immune to national trends. There are issues around financing office buildings, and we have too many industrial buildings because somebody said we needed a million-square-foot building, and 10 people decided to build one. Uncertainty surrounding world events has also caused people to pause.

However, we did not become terribly overbuilt, particularly in the office markets. Nobody is going to build much new product, while businesses continue to grow and expand. That growth is filling vacancies created when additional product entered the market.

South Carolina is also an inbound residential market. Residential growth means we need more dentists, attorneys, places to eat, grocery stores, and other services, so retail continues to perform well. Our problem is managing the growth and managing the people. We are not facing the opposite problem of nobody coming, everybody leaving, and trying to save what we have.

When I recently chaired the Charleston Regional Development Alliance, we discussed focusing on jobs and businesses that deliver high financial impact with a lower impact on infrastructure. That allows us to continue growing the economy without diminishing quality of life.

How is Avison Young evolving its capabilities alongside the market?

We are a data-driven organization and have invested heavily in technology. We focus on helping people make good decisions based on a broad range of information.

On the healthcare side, for example, we have a platform that allows us to analyze needs down to the census-tract level. We can examine how many children and neighborhoods are in an area, determine whether more pediatricians are needed, and identify gaps that providers can fill.

Avison Young is a global organization operating in 20 countries. That gives us visibility into the national narrative surrounding office buildings, conversions, and other issues. However, every market is local.

One challenge is that lending decisions for building investments are often not made locally. A local banker may understand that Charleston is not San Francisco, does not have the vacancy rates found in some larger cities, and has a healthy market. Yet, if the company’s policy is to avoid lending on office buildings, the banker may not have the authority to make that loan.

Even with a vibrant and growing economy, we still have to work through a national narrative operating on a much larger scale. Construction costs also remain high and are not coming down.

What is shaping demand for industrial real estate across the state?

Industrial real estate is not only about logistics. It also includes manufacturing, and South Carolina has a manufacturing history. In Charleston, companies such as Boeing, Daimler, and Volvo are part of an advanced manufacturing base. Their suppliers and subcontractors need to be nearby, so they occupy industrial space even though they are not logistics providers. That segment continues to perform well.

Logistics and transportation are heavily affected by port volumes and global trade. Uncertainty surrounding trade has caused challenges. One of the port facilities in Charleston was recently mothballed because volumes were not sufficient to justify keeping it open.

As trade is rebalanced, the changes will affect the marketplace. There is plenty of industrial inventory available, but it will take time for conditions to sort themselves out.

What distinguishes the office properties that continue to perform well?

Our markets are not different from others across the country. The best office buildings—those offering the highest quality and strongest amenities—are successful and remain well occupied.

As companies expand, the lack of capital for new construction is causing businesses and investors to reconsider an earlier generation of Class A office buildings. Investors are reinvesting in well-located, well-built properties that may have some age on them.

By upgrading those buildings, owners can make them competitive and suitable for high-end businesses. That reinvestment is occurring, and I expect we will see more of it over the coming years.

What trends are shaping retail and mixed-use development?

Retail will continue to grow because of South Carolina’s inbound population. Suburban retail typically includes grocery-anchored shopping centers and related businesses serving nearby residents.

During COVID, many people said retail was dead, everyone would shop online, and consumers would never return to shopping centers. However, people still need to go somewhere to get a haircut or take their dog to a veterinarian. Personal services must be delivered physically, particularly when the population is growing.

Mixed-use development is especially relevant to office properties. Well-amenitized office buildings can include street-level retail that benefits from tenants working upstairs. Someone in the building may also have access to a gym, restaurant, or coffee shop. Those uses activate the street, create more vibrancy, and help support an 18-hour environment.

This approach can bring office, multifamily, retail, and services together in a cohesive setting. Technology companies and businesses with younger workforces often want to be somewhere people can access everything they need within a short distance, preferably without getting into a car.

What challenges should communities consider as development expands?

The answer varies by market. Data centers are one example of the choices communities face. People worry that these facilities will consume power and water or increase utility rates. The counterargument is that data centers employ relatively few people and place less traffic on the roads.

If a community recruits a business with 1,000 employees, it must determine where those employees will come from, where they will live, whether schools can accommodate them, and whether roads can handle the traffic. Communities across South Carolina are trying to address those interconnected issues.

Charleston now has a reverse commute that did not exist many years ago, with businesses located in Summerville and beyond and residents traveling outward for work. That helps, but Charleston is geographically constrained. Unlike Greenville, it cannot expand in every direction because the ocean occupies half of the surrounding area. Rivers, bridges, and wetlands further divide the remaining land.

Communities that integrate the services people need so residents do not have to leave for everyday activities are performing well. Mount Pleasant is an example. Twenty-five years ago, residents had to leave for many services. Today, children can be born there, attend school there, earn a degree from Trident Technical College, and access shopping and healthcare within the community.

Affordability remains a challenge because Mount Pleasant is expensive. These problems cannot be solved in isolation. Pushing on one side of the balloon causes the other side to expand and creates another issue. We are managing growth and success, which is better than managing our way out of a problem, but it is still challenging.

How are infrastructure and affordability influencing development decisions?

Land availability and construction costs are only part of the equation. Communities also need sufficient sewer capacity and power generation to accommodate businesses that want to locate here. These factors are interconnected and contribute to the rising cost of living.

Historically, wages have not kept pace with inflationary increases in living costs. That creates another consideration as communities pursue investment and economic growth.

What gives South Carolina an advantage when competing for investment?

Communities use scorecards to compare themselves with competing cities. They assess how the cost of living and housing compare with national averages, whether wages are above or below those averages, and whether an adequate workforce is available.

Once a job opportunity exists, quality of life becomes important. South Carolina offers outdoor activities, historic communities, water access, and mountains. It is a diverse state in terms of its outdoor environment.

Companies can build successful businesses here, find good employees, and recruit people who want to live in this environment. The growth recorded over the past 25 or 30 years demonstrates that the story resonates. People often visit South Carolina on vacation, look around, and decide it would also be a good place for their business.

What are your priorities for Avison Young over the next three to five years?

We will continue investing in our people and growing with the market. Commercial real estate has not historically done a good job of educating people. The industry often throws newcomers into the business and expects them to figure it out. We are investing heavily in corporate learning capabilities and the younger generation so they have an opportunity to succeed.

I believe strongly in giving back to the community that benefits you. I have chaired the chamber and the Charleston Regional Development Alliance, served on the Trident Technical College Foundation board, and participated in other organizations. We are working to encourage the next generation to become involved and help shape solutions as South Carolina grows.