Market Reports

More Affordable Housing Options Needed in Greater D.C. Region, Says Fossi of Enterprise Community Development

by John Nelson February 1, 2023

WASHINGTON, D.C. — In 2019, the Metropolitan Washington Council of Governments issued a report stating that the D.C. region — comprising the city, Northern Virginia and suburban Maryland — needed to add 320,000 more housing units between 2020 and 2030, and that at least 75 percent of this new housing should be affordable to low- and medium-income households. Rob Fossi, senior vice president of real estate development at Enterprise Community Development, says the figure has only climbed in recent years due to macroeconomic and local challenges. “In the three years since that report was issued, this demand has only intensified while supply chain interruptions, interest rate spikes and competing resource challenges precipitated by the COVID-19 pandemic have all been challenges to maintain pace,” says Fossi. Enterprise Community Development, an affiliate of Enterprise Community Partners, is the top nonprofit owner and developer of affordable homes in the Mid-Atlantic with a portfolio spanning about 13,000 apartments that house more than 22,000 residents. The firm is actively developing and preserving affordable housing across the region in order to address the demand, which Fossi says shows no signs of abating anytime soon. “There is little doubt that the demand for quality affordable housing will …

February 1, 2023

District of Columbia Industrial Market Reports Southeast Southeast Market Reports Virginia

Industrial, Warehouse Product Remains Tight Throughout Northern Virginia

by John Nelson January 9, 2023

Sustained leasing velocity for industrial/warehouse space in the Northern Virginia market, combined with the nearly insatiable demand for data center product, is contributing to developers repurposing existing business communities with this asset class to support demand, as well as companies expanding their geographic footprints into suburban Maryland and Central Virginia to secure space. This trend could be pivoting slightly due to the recent slowdown in leasing activity both locally and nationally as it relates to rising interest rates, the prospects for a looming recession and the possible end of a prolonged real estate cycle. The vacancy rate for industrial/warehouse space in the region currently stands at just over 2 percent. In the last quarter, the Northern Virginia industrial market experienced the largest pipeline in its history with more than 1 million square feet of space delivered, with nearly 5 million square feet of space in the development pipeline. The largest projects are contained within Stafford County as land in Loudoun and Fairfax counties has become unaffordable, or simply unattainable. Triple-net asking rents reached another all-time high of $12.45 per square foot in the third quarter, aided in part by these new deliveries. New space remains scarce and commands a premium, …

January 9, 2023

Market Reports Office Southeast Southeast Market Reports Virginia

Smart Office Development Poises Richmond for Further Investment and Growth

by John Nelson September 6, 2022

The high quality of life and relatively low cost of living in Richmond, coupled with sustained investment in live-work-play infrastructure, has led to population growth and a surge in investor interest in the city. The job market is showing strong signs of recovery with an unemployment rate of 3.2 percent, which is 40 basis points below the national average. Although office-using employment remains elevated at 3 percent from pre-pandemic levels, office vacancy rates remain relatively stable at 11.2 percent. Live-work-play rules the day Richmond has become a hot spot for millennials, boasting a low cost of living, high quality of life and amenity-rich neighborhoods. While the broader Richmond market has recorded 10 percent population growth since 2010, key submarkets in the urban core are growing at a faster pace, with Scott’s Addition recording 23 percent population growth during the same period. Developers have capitalized on this increased demand for city living, building out the urban core with multifamily and mixed-use developments in trendy submarkets. Scott’s Addition and Manchester — which have more breweries per capita than any other neighborhood — have added a combined 3,000 apartment units in the last five years, with an additional 1,300 units currently under construction. …

September 6, 2022

Market Reports Retail Southeast Southeast Market Reports Virginia

Residential Growth in Scott’s Addition, Manchester Drive Richmond’s Retail Market

by John Nelson August 30, 2022

With a 20 percent increase in population in the City of Richmond over the past half decade, and more to come, the city still struggles to attract national retail tenants such as The TJX Cos., Williams-Sonoma and Ann Taylor LOFT, as well as other soft and hard goods users. What Richmond does not struggle attracting are breweries, distilleries, regional and local restaurant operators and many start-up retailers dipping their toes into the growing 22 to 35 demographic calling Scott’s Addition and Manchester home. The food-and-beverage scene in Greater Scott’s Addition is blowing up with the addition of restaurant operations such as ZZQ (rated the best BBQ in Richmond), Lucky AF (from EAT Restaurant Partners), Wood & Iron, Tazza Kitchen and the James Beard Award-winning Peter Chang’s. When coupled more than 15 breweries, distilleries and the city’s only meadery, this energy is attracting ‘retailtainment’ such as River City Roll, Bingo Beer, The Circuit, Tang & Biscuit, Movieland by Bow Tie Cinema and Brambly Park. TRP (Thalhimer Realty Partners), Historic Housing (Louis Salomonsky’s firm) and Capital Square 1031 are local companies leading the developments, and Greystar and Bonaventure have come in from out of town to plant their flag as well. The …

August 30, 2022

Market Reports Multifamily Southeast Southeast Market Reports Virginia

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

District of Columbia Market Reports Maryland Restaurant Retail Southeast Southeast Market Reports Virginia

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

Market Reports Restaurant Retail Southeast Southeast Market Reports Virginia

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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