Market Reports

How Will the Richmond MSA Fare as Multifamily Buyer-Seller Price Gap Takes Shape?

by John Nelson August 23, 2022

Similar to the early stages of the COVID-19 pandemic in 2020, a gap has started forming with price expectations between apartment owners and investors. The price disparity at the start of the pandemic was driven namely by market uncertainty, adjustments to underwriting assumptions and increases to lender and insurance escrow requirements. As the pandemic played out, we saw a mass exodus from denser gateway cities, an influx of government stimulus money and a phasing out of state-specific stay-at-home orders that allowed the economy to open back up. Capital moved away from the retail and hospitality industries hit the hardest, with the multifamily sector reaping the benefit. The second half of 2020 saw a dramatic rise in rents, occupancy and new lease and renewal signings. These trends led to a calming of the debt and capital markets, paving the way for the price gap between buyers and sellers to evaporate as an unprecedented wave of investment flooded into the multifamily space, with 2021 hitting a new high of $213 billion of investment volume, well above the previous peak of $129 billion in 2019, according to Yardi Matrix data. Now midway through 2022, we’re seeing a buyer-seller price gap begin to take …

August 23, 2022

Industrial Market Reports Southeast Southeast Market Reports Virginia

Richmond’s Industrial Market Development Pipeline Shows No Signs of Slowing

by John Nelson August 16, 2022

At the mid-year mark, industrial occupancy in the greater Richmond area remains strong, closing with an overall occupancy rate of 98.5 percent in the categories being tracked (Class A, B, select C vacant and investor-owned product with a minimum of 40,000 square feet total RBA). Class A occupancy remained steady at 97 percent at the end of the second quarter. Class B occupancy also remained steady at 94 percent at the end of the first quarter. CoStar Group reports overall industrial occupancy at 96.8 percent for product of all sizes, including investor-owned facilities, but excluding flex space (minimum 50 percent office). There remains a shortage of space in the 25,000- to 50,000-square-foot range as most spec buildings being built are larger single-tenant buildings. Richmond’s strategic Mid-Atlantic location along Interstate 95 provides access to 55 percent of the nation’s consumers within two days’ delivery by truck, and in addition to being the northernmost right to work state on the Eastern seaboard, Virginia has once again been named as the No. 1 state for business by CNBC. Metro Richmond has a civilian labor force of almost 700,000 (1.03 million population) with unemployment rates at 3.7 percent as of June. With 12 Fortune …

August 16, 2022

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Grocery Chains and Other Retail Categories are Making Hay in Mid-Atlantic Region

by John Nelson January 11, 2022

The Washington, D.C., and Baltimore markets, when combined, represent the fourth-largest metropolitan region in the nation by population, and retailers are taking notice again. Grocery-anchored projects are the most prevalent in the headlines. For example, the first of nearly 20 Amazon Fresh locations has opened in the area. Additionally, Wegmans’ smaller format rollout plan is active with its first location in Stonebridge’s Carlyle Crossing in Alexandria opening spring 2022, along with Roadside Development’s City Ridge Project at the former Fanny Mae Headquarters in Northwest D.C. Former Shoppers Food Warehouse boxes also continue to get absorbed by new grocers. A less-covered sector of the grocery market is the international markets category, which remains very active in the region. There are 29 different banners across the region that exceed 10,000 square feet in size, with the newest entrant being Oh! Markets in Northern Virginia. Other international market newcomers, including 99Ranch and Enson Market, are also searching for space. With the immense ethnic diversity of the region, we expect investors to start taking notice of this sector with their acquisition appetite, just as they have in other regions like Texas and Florida. Publix, a customer favorite, is in the early stages of identifying …

January 11, 2022

Industrial Office Southeast Southeast Market Reports Virginia

Richmond’s Trajectory is Still in the Early Innings

by John Nelson December 20, 2021

Richmond continues to solidify its position as a high growth Mid-Atlantic market and one of the top secondary markets in the country for inbound corporate and real estate investment. The Richmond MSA, totaling nearly 1.4 million people, has been one of the true beneficiaries of the COVID-19 pandemic due to its historical performance during economic distress, in-bound millennial and corporate migration from larger peer markets, quality of life and affordability, diversified economy, educated workforce, pro-business environment and the city’s central East Coast location. With such broad and fundamentally important characteristics, Richmond will continue to attract both domestic and global corporations and capital alike. The continued growth of Richmond’s diverse economy and workforce, fueled by its core industries including healthcare, manufacturing, industrial and technology, and further supported by its federal (Federal Reserve Branch and 4th Circuit Court) and state capital underpinnings, has generated a bullish sentiment on the economic growth prospects for 2022. As of fourth-quarter 2021, Richmond’s unemployment currently sits at 4 percent, representing a consistent decrease since the start of 2021 and well below the national average of 5 percent. City’s Industrial Sector is Taking Off Richmond’s highly coveted Interstate 95 corridor location and $300 million Port of Richmond …

December 20, 2021

Market Reports Multifamily Southeast Southeast Market Reports Virginia

Richmond’s Multifamily Sector is the Best-Kept Secret in the Southeast

by John Nelson November 8, 2021

Mention “rising secondary multifamily markets in the Southeast” and what might come to mind are markets such as Charlotte, Raleigh, Nashville or Orlando. A less discussed candidate is Richmond, which has a case to be considered the multifamily sector’s best-kept secret. It’s a secondary market that’s moving forward full steam ahead for two primary reasons: supply and demand. More people = demand According to the 2020 Census, the population of the city of Richmond stood at 232,226, a 12.7 percent increase from the 204,375 reported in 2010. Richmond is the county seat of Henrico County, which had a population of 333,766 as of 2020. This is an 8.6 percent increase over the 2010 population count of 307,201. More residents are moving to Richmond, mainly for one reason: jobs. But the metro has other appealing factors as well, incuding its geographic location and low costs of living and doing business. In addition to being the site of growing employment centers, Richmond is proximate to major East Coast cities. New York City, Philadelphia and Washington, D.C., are easily accessible via train or airplane. But Richmond is relatively affordable, especially compared to other Mid-Atlantic markets and gateway cities on the East Coast. With …

November 8, 2021

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Redevelopments and Backfills Drive New Retail Activity All Around Richmond

by John Nelson November 1, 2021

“Infill, redevelopment and reuse” are the mantras in the city of Richmond and even in some suburbs, where new construction continues to follow residential growth in nearly all the surrounding counties, with Chesterfield and Henrico being the most active. The municipalities themselves play key roles as well. Costs for land and construction continue to escalate, so creativity is key no matter what avenue pursued in the retail world. And like most of the United States, Richmond’s developers and property owners are getting creative to keep their centers relevant. Short Pump Town Center, Richmond’s darling mall that is owned by a partnership of Brookfield Properties, QIC and local developer Pruitt Cos., is not immune to closures and felt the pain when Nordstrom announced it was not reopening after shuttering the store during the height of the COVID-19 pandemic. However, with the strength of the retail market in Short Pump, the mall and the surrounding market continue to perform. The Container Store and an expanded Arhaus backfilled a vacant hhgregg, and the mall has recently announced deals with Fabletics and Warby Parker. ShopCore Properties, which owns West Broad Village anchored by Whole Foods Market, REI and HomeGoods, struggled for years with vacancy …

November 1, 2021

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Richmond Industrial Pipeline Shows No Sign of Slowing Development, Leasing

by John Nelson October 25, 2021

At the mid-year mark, industrial occupancy in the greater Richmond area remains strong, closing with an overall occupancy rate of 93 percent in the categories we track (Class A, B select C vacant and investor-owned product with a minimum of 40,000 square feet total). Class A occupancy increased to 96 percent at the end of the second quarter, up from 93 percent at the end of the first quarter. Class B occupancy experienced a slight decrease to 91 percent, down from 92 percent at the end of the first quarter. CoStar Group reports overall industrial occupancy at 95 percent for product of all sizes, including investor-owned facilities, but excluding flex space (minimum 50 percent office). Richmond’s strategic Mid-Atlantic location along Interstate 95 provides access to 55 percent of the nation’s consumers within two days’ delivery by truck, and in addition to being the northernmost right to work state on the Eastern seaboard, Virginia has once again been named as the top state for business by CNBC. Business Facilities also ranked Richmond as one of the top locations for corporate headquarters. With 12 Fortune 1000 companies located in the region, Richmond is home to the most Fortune 1000 headquarters compared to …

October 25, 2021

Industrial Market Reports Southeast Southeast Market Reports Virginia

Richmond Industrial Market Maintains Strong Momentum Through Mid-Year

by Alex Tostado October 26, 2020

At the mid-year mark, industrial occupancy in the greater Richmond area remains strong, closing with an overall occupancy rate of 92 percent in the categories being tracked (Classes A and B, as well as select Class C vacant and investor-owned product with a minimum of 40,000 square feet). Class A occupancy decreased slightly to 95 percent at the end of the second quarter, down 100 basis points from 96 percent at the end of the first quarter. The largest addition to the vacant Class A inventory is a 226,000-square-foot former GSA facility in Chesterfield County. Class B occupancy experienced an increase to 92 percent, up from 90 percent at the end of the first quarter. CoStar Group reports overall industrial occupancy at 95 percent for product of all sizes, including investor-owned facilities but excluding flex space (minimum 50 percent office). Richmond’s strategic Mid-Atlantic location along Interstate 95 provides access to 55 percent of the nation’s consumers within two days’ delivery by truck. In addition to being the northernmost right to work state on the Eastern seaboard, Virginia has been ranked as the top state for business by CNBC. Richmond is located approximately 90 miles from the Port of Virginia in …

October 26, 2020

Market Reports Office Southeast Southeast Market Reports Virginia

Is it Time to Start Investing in Richmond’s Office Market? All Signs Point to ‘Yes’

by John Nelson September 14, 2020

Richmond has been considered a secondary market in the eyes of many national investors, and for good reason. Rental rates don’t compare to Washington D.C., New York City or other major primary markets. But a strong leasing market mixed with a large-scale population shift leads to one question: is now the time to start investing in the Richmond office market? Home to seven Fortune 500 companies, as well as fast-growing companies such as CoStar Group and Capital One, Richmond has made its mark as one of the top cities in the country when it comes to attracting recent college graduates. Offering affordable and diverse housing, amazing food and entertainment, close proximity to beaches and the nation’s capital with a high demand for skilled workers, Richmond is the perfect city for just about anyone. Hence, Richmond has seen a massive boom in its working-class population, which has led to lower vacancy rates, increased rents and a rise in new office developments. The revitalization of two major submarkets is also impacting the growth in millennial population. Scotts Addition and Manchester have both seen significant interest and investment from local and national developers. These submarkets are bringing the live-work-play feel to Richmond’s downtown …

September 14, 2020

Washington and North Virginia Rent Occupancy Graph

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Washington’s Tech Boom Changes the Multifamily Investment Calculus

by Sarah Daniels March 3, 2020

Washington and Northern Virginia are among the nation’s most expensive places to rent an apartment, which in part explains the billions of dollars being spent on apartment construction there. But Capital Area asset returns in the post-recession era haven’t clearly supported these decisions. From 2013 to 2018, rents in Washington and NoVA increased at respective compound annual rates of 3.2 percent and 2.6 percent, tabulating Reis data, materially slower than the 4.7 percent average growth recorded by the 50 largest U.S. apartment markets. Likewise, occupancy trends were no better than average, muted by heavy supply, suggesting that Washington NOI growth in most cases was measurably slower than in alternative markets. But everything changed last year. Although Washington has been a technology player for decades, the region’s strengths fell primarily in telecom and defense, markets in which proximity to government was a competitive advantage. But the region’s growing prowess in private applications of digital technology reached critical mass in 2019 with Amazon’s decision to site its East Coast headquarters in Northern Virginia, specifically with a view toward tapping its deep reservoir of high-tech talent. The impact on economic growth in the capital is only beginning and seems likely to fundamentally alter …

March 3, 2020

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