The Richmond industrial market has been undergoing a dramatic transformation that reads like a case study in strategic positioning and timing. Over the past decade, this “regional market” has become a U.S. powerhouse, boasting all the ingredients to attract, maintain and organically grow supply-chain focused global occupiers and institutional capital investment.
Richmond’s strategic advantages include its prime location on I-95 — equidistant to both metropolitan D.C. and the Port of Virginia — attractive labor demographics, disciplined development and strong demand from Fortune 100 occupiers. Additionally, the surging data center hyperscalers and their suppliers have further catalyzed growth in the market.
The result? Richmond now features one of the lowest U.S. vacancy rates, sustained year-over-year rent growth, a feeding frenzy of institutional capital routinely producing 10 to 15 bids and lender quotes per property that have fundamentally reshaped who owns, develops and finances industrial real estate in the market.
From regional player to national stage
Over the past decade, Richmond experienced a 68 percent increase in institutional investors and lenders, growing from 47 participants in 2015 to nearly 80 unique institutions that have invested in and loaned on Richmond industrial assets, with 50 cents of every dollar invested in Richmond coming from institutional capital.
The roster of institutional capital participants now includes major global investors such as ARES, KKR and Morgan Stanley, as well as international sources including Japan‘s SCOA and Singapore‘s Mapletree Investments. A significant amount of credit for Richmond‘s success should be attributed to strong regional developers like Lingerfelt and Marchetti, and national developers including Panattoni, Hillwood and Scannell, whose foresight and conviction catapulted Richmond into the national spotlight.
Location pays dividends
Richmond‘s appeal lies in its strategic positioning at the convergence of two critical infrastructure networks. The market sits roughly 90 minutes from the Port of Virginia, creating an optimal balance between port proximity and operational cost efficiency for cargo flowing through one of the busiest and most efficient U.S. container facilities. Simultaneously, Richmond’s position along the I-95 corridor provides seamless access to major population centers from the Carolinas to the Northeast.
North Carolina‘s recent adoption of a phased elimination of corporate income tax by 2029 will likely generate additional long-term benefits for Virginia‘s ports. As this tax advantage spurs corporate expansion in markets like the Research Triangle (Raleigh-Durham-Chapel Hill), Virginia‘s ports are well-positioned to capture increased cargo volumes, given their established role as the primary maritime gateway serving North Carolina‘s major inland markets over Southeastern port alternatives.
The strategic location story extends beyond traditional logistics to the expanding technology sector. With 80 percent of land sites under contract earmarked for data center development, Richmond benefits from fiber infrastructure that flows directly from the Port of Virginia through Richmond’s Mid-Atlantic Network Access Point to Northern Virginia‘s Ashburn hub. The market has become the natural path of growth for hyperscalers in Northern Virginia needing connectivity and scale coupled with power availability.
Numbers don‘t lie
Market fundamentals continue to demonstrate Richmond‘s strength relative to regional competitors. According to JLL’s “Q3 2025 Richmond Industrial Dynamics” report, the market maintains a 4.8 percent overall vacancy rate, with Richmond notably appearing among the few markets nationally experiencing declining vacancy rates, balanced supply/demand and boasting 12.6 million square feet of tenants-in-the-market.
Institutional interest is validated by occupier behavior. Major corporate users, including Eli Lilly, Target, The LEGO Group, Trader Joe‘s, AutoZone, Carvana and Wegman’s have established significant presences through user purchases rather than leasing, demonstrating long-term supply chain commitments. In many cases, these ownership decisions reflect Richmond‘s alignment with their three main objectives: strong labor, transportation and supply-chain network optimization and site availability. This alignment reinforces the long-term stability that investors require.
Manufacturing requirements have gained particular momentum, now accounting for 2.1 million square feet or 15.2 percent of total active requirements in the market. This trend aligns with broader onshoring initiatives as companies seek to diversify supply chains and reduce dependence on overseas production.
Perhaps most importantly for investors, Richmond avoided the speculative overbuilding that has been challenging other markets post-pandemic. Strategic and measured development by market-savvy local developers, currently led by Lingerfelt, Richmond‘s most active owner-developer, and others, has contributed to the area‘s robust real estate fundamentals.
Capital keeps coming
As year-end 2025 approaches, Richmond industrial sales volume are currently up 40 percent over the whole of 2024, with that number to increase by additional closings this month. This increase has been driven by both large portfolio transactions and individual asset sales. The intensity of this demand is evident in the bidding activity: JLL‘s Mid-Atlantic Industrial team has seen more than twice the number of initial bids on Richmond core deals versus deals in more traditional metro D.C. submarkets over the past 12 months.
This bidding frenzy has driven the pace of transactions to such robust levels that the market is already working through available investment inventory. While this rapid absorption of tradeable assets suggests some moderation in sales volume may occur in 2026, which will only increase the number of bids per future offering.
What‘s next
The question isn‘t whether Richmond will continue attracting institutional interest. The current development pipeline of 5 million square feet under construction appears strategically calibrated by building size and specifications to meet demand without creating oversupply conditions. JLL would not rule out the return of the “forward” sales market as existing investors seek to grow their Richmond portfolios, runner-up bidders get more comfortable with the future of stabilizing assets under construction and the imbalance of supply and demand of investment offerings favors sellers in driving record pricing.
Richmond has been an overnight success a decade in the making, finally stepping into its own spotlight. Institutional capital has clearly taken notice of the transformation of this once regional market into a nationally recognized Tier 1 industrial investment destination.
— By Bill Prutting, senior managing director in the Mid-Atlantic office of JLL Capital Markets