Virginia

Hilton to Spin Off Real Estate into 70-Property Hotel REIT

by Nellie Day February 29, 2016

MCLEAN, VA — Hilton Worldwide (NYSE: HLT) has announced plans to spin off the majority of its real estate business into a publicly traded REIT. The company also plans a second spinoff, putting its Hilton Grand Vacations timeshare business into a third publicly traded company. The company hopes the spinoffs will help focus Hilton Worldwide’s model on its core business. “The transactions we announced today will result in three pure-play companies, enabling dedicated management teams to fully activate their respective businesses,” says Christopher Nassetta, president and CEO of Hilton Worldwide. “We intend to have the appropriate leadership, strategies and capital structures in place to set up all three companies for further success.” If approved by the Securities and Exchange Commission (SEC), Hilton’s new REIT will include about 70 properties and 35,000 rooms, comprising one of the largest and most geographically diversified publicly traded lodging REITs. The REIT’s portfolio will contain luxury and upper-upscale assets in high-barrier-to-entry urban and convention markets, top resort destinations, select international regions and strategic airport locations. The new timeshare company will contain nearly 50 club resorts in the United States and Europe. The company will have a long-term license agreement with Hilton Worldwide to market, sell …

February 29, 2016

Industrial Market Reports Southeast Southeast Market Reports Virginia

Richmond’s Industrial Market Fires on Most Cylinders, Save for Large Spec Projects

by John Nelson December 7, 2015

Greater Richmond’s industrial market is as strong as it has been in a generation. Given the overall growth of the economy, including industrial employment and investment, it appears that the engines driving industrial economic growth will remain steady and the need for industrial real estate will continue to be steady. Greater Richmond’s industrial market is moving fast and on most cylinders, with the only laggard being pure speculative development of high-bay large block industrial and small incubation flex product. All other cylinders are pumping, including industrial and flex leasing, design build-to-suits, land sales, freestanding occupier building sales and investment sales. Absorption and general growth activity is coming not only from local existing companies and start-ups, but also by companies outside of the area looking to relocate or open additional facilities here. The flavor of the demand has been relatively diverse reflecting the Greater Richmond area’s stable economy and Mid-Atlantic location with its superior logistic opportunities. Economic Trends Greater Richmond’s population is nearly 1.3 million people, and total employment is more than 650,000 in the Richmond metro area. The diverse economy includes 10 Fortune 1000 headquarters; pharmaceutical, chemical, biotech and other 21st century manufacturers; financial and information technology services; Fifth District …

December 7, 2015

Market Reports Retail Southeast Southeast Market Reports Virginia

Grocery Stores, Restaurants, Fitness Are Driving Richmond’s Retail Market

by John Nelson November 30, 2015

This year is shaping up to be very exciting and productive for the Richmond retail market. The Richmond retail market has started at a brisk pace for the first half of 2015, similar to the end of 2014 as it absorbed 111,889 square feet. The vacancy rate has continued to decline over the past 12 months as well. The overall retail vacancy rate in Richmond tightened to 6.6 percent, a 50 basis point improvement over last year. The main drivers of retail activity throughout the Richmond MSA continue to be grocery stores, fitness centers and restaurants. Early this year we saw the commencement of construction at two Wegmans-anchored developments in Richmond, one in Short Pump and another in Midlothian. The Midlothian Wegmans will anchor the new Stonehenge Village and is on pace to open in early 2016. The Short Pump Wegmans will join Cabela’s in the new West Broad Marketplace, a 400,000-square-foot development on the western edge of Short Pump. There has also been solid activity in the market from several other grocers, including Walmart Neighborhood Market and Aldi. Each of these concepts has opened four new stores in the market. Another grocer poised to enter the market is LIDL, …

November 30, 2015

Market Reports Multifamily Southeast Southeast Market Reports Virginia

Richmond’s Multifamily Market Couldn’t Look More Attractive to Investors

by John Nelson November 23, 2015

The Richmond metropolitan area, with a population of 1.3 million, is bursting with multifamily development. The growing MSA contains more than 72,000 apartments units (45 percent Class A) and has 2,018 units under construction with another 5,826 in various stages of pre-development. On top of all this activity, the overall market occupancy remains at 96 percent. The fuel for these conditions comes from the many amenities in the market, from the University of Richmond and a robust sports scene to the proximity to Atlanta, the Atlantic coast and Washington, D.C., as well as the encouraging employment picture. The city’s unemployment stands at 5 percent compared to the U.S. average of 6.3 percent; since 2000 the city’s population has grown by nearly 15 percent. These conditions allow property owners to leverage this diverse and sustainable market for multifamily investments. Richmond development also benefits from the attractive interest rates, which remain low despite having climbed 80 basis points since late January. Along with monitoring this upward trend, news earlier this month from the Federal Reserve of a rate hike will serve as a caution sign for investors. Whether we see this hike in the next couple of months, or not until 2016, …

November 23, 2015

Market Reports Multifamily Southeast Southeast Market Reports Virginia

Apartment Supply in Richmond’S CBD Attracts Young, Economically Powerful Residents

by John Nelson November 16, 2015

Richmond has become a multifamily safe haven with unemployment rates below the national average and the second-best annual rental returns in the nation at 20.42 percent. Richmond’s high annual returns are due in large part to its population. The city has become a mecca for young adults as 32.2 percent of the population is in its 20s and 30s — well above the national average of 22 percent. This population’s drive for an urban, walkable lifestyle is generating a great deal of development in the CBD, as well as the Manchester submarket where Virginia Commonwealth University’s (VCU) Institute for Contemporary Art is located. VCU’s art institute is the No. 1 art and design school in the country, and continues to draw in Millennials looking to take advantage of the open and historic downtown district surrounding the James River. Richmond’s flourishing, younger population is demanding adaptive re-use and new development and developers in Richmond are answering the call. Areas such as Scott’s Addition, Shockoe Bottom and Manchester have all seen new mid and high-rise developments in recent months that are attracting a plethora of new tenants. Highlights of Richmond’s apartment market include: • 1,000 units are currently under construction with an …

November 16, 2015

Market Reports Southeast Southeast Market Reports Virginia

Expansion of Grocery Stores Sets Tone for Richmond Retail Market

by admin September 8, 2014

The first half of 2014 has produced a tremendous amount of activity in the Richmond retail market. The vacancy and unemployment rates have both seen a reduction within the past 12 months. The overall vacancy rate for retail in Richmond is 8.3 percent, down from 8.6 percent this time last year, and unemployment is down 70 basis points to 5.6 percent for the same period. The main drivers of activity throughout the Richmond MSA are grocery stores. The most impactful announcement is Wegmans committing to open two stores in the market, one in Short Pump and one in Midlothian. Another newcomer to the market is A Southern Season, a gourmet food emporium based in Chapel Hill, North Carolina. A Southern Season will open a 53,000-square-foot gourmet food emporium in the new Libbie Mill at MidTown development. The grocer’s offerings include cooking classes, a restaurant, gift baskets, accessories, cookware, and a large selection of specialty food items. Libbie Mill is a mixed-use project that Gumenick Properties LLC is developing on Staples Mill Road near Willow Lawn. Kroger has also been active in Richmond with two new Marketplace format stores in the last 12 months and a third to-be-built in Colonial Heights. …

September 8, 2014

Market Reports Southeast Southeast Market Reports Virginia

New Apartment Developments Reflect Richmond's Cool Atmosphere

by admin August 18, 2014

Did Richmond get hip while you weren’t looking? If you missed all of the skinny jeans, slim-fit plaid, tattoos, beards and craft breweries, then you were not paying attention. Is there a correlation between the amount of breweries, luxury apartments and historic rehabs? Maybe, but something is happening here and it has little to do with Richmond’s former designation as the Capital of the Confederacy and more to do with a vibrant and diverse culture, native-brick buildings, the James River, Virginia Commonwealth University (VCU) and a great quality of life. Millennials are flocking here and Richmond has gotten cooler (i.e. better) every year, albeit somewhat slowly. In terms of apartments, there are several hotspots in the area that continue to be, or are becoming, destinations to live, work, shop and play, and multifamily developments are leading the way. Shockoe Bottom is booming, Manchester is coming to life, Scott’s Addition & Boulevard could become Richmond’s SOHO, Short Pump is moving into Goochland County and does not seem to be stopping anytime soon, and Chesterfield County, once you get around the cash proffers, continues to surprise. Richmond has just over 70,000 units and a very stable vacancy rate of 4.5 percent. Class …

August 18, 2014

Market Reports Southeast Market Reports Virginia

Solid Job Growth Brings New Multifamily Development

by admin October 28, 2013

Hampton Roads, the grouping of cities clustered around the meeting of the Atlantic Ocean, the Chesapeake Bay and the Intracoastal Waterway, is long known for its huge and vital military installations, and its tremendous maritime/shipping industries. The Port of Virginia is one of the busiest ports on the Eastern Seaboard, and is about to become even busier. At the end of the second quarter of 2012, the port posted a 7.2 percent year-over-year increase in cargo. Furthermore, with the widening of the Panama Canal, there will be a new breed of container ships carrying vastly more cargo than conventional ships. Only a few ports will be able to handle those ships, and Hampton Roads is the first to be ready. This increase in container shipments through our 55-foot, ice-free harbor will be an economic boon for Hampton Roads. The military has had, and will continue to have, a major impact on the local economy. However, there has been a concerted effort among all the cities of Hampton Roads to diversify the economic base. Technology-driven industries, including healthcare, modeling and simulation and research and development are all growing industries in the region. Seven of the world’s 10 largest aerospace and defense …

October 28, 2013

Market Reports Southeast Market Reports Virginia

Retail Leasing Activity, Development Are on the Upswing

by admin September 16, 2013

Retail is looking up in Richmond. Following a recession characterized by a dearth of new retail development, the Richmond retail market is once again poised for growth. Decreases in the overall vacancy rate, positive employment growth, increases in retail rents and an upswing in overall retail construction suggest that the market is amidst a retail recovery. Historically, these economic factors have driven robust expansions. While “robust” might be a bit dramatic for 2013, several retail projects are in the pre-development and development phases, coupled with a number of significant retail transactions. Those are encouraging signs that point to recovery. Several noteworthy retail developments fill the pipeline. Walmart recently acquired a 10-acre site at Reynolds Crossing, a 90-acre, mixed-use development in Richmond’s established “near west end” suburb, with plans to build a 90,000-square-foot store with a garden center. Expected to open in spring 2014, Walmart is set to anchor the development that includes small shop and restaurant space in addition to outparcels. Likewise, Kroger is under construction with its third Kroger Marketplace in the Richmond MSA. This 124,000-square-foot grocery concept anchors Staples Mill Marketplace, which will also include outparcels and small shop and restaurant space. After 10 years of planning, Gumenick …

September 16, 2013

Market Reports Southeast Market Reports Virginia

Richmond Industrial Fundamentals Improve; Market Still Favors Buyers

by admin September 3, 2013

At the mid-year mark, CoStar reported industrial occupancy in Richmond was approaching 90 percent for industrial product of all sizes, excluding flex space. Buyers looking to purchase single-user Class A facilities of 40,000 square foot or greater are experiencing an acute shortage of said product. These larger free-standing, single-occupant facilities are now in shorter supply in the suburban areas of all four quadrants, though multiple opportunities remain in the city of Richmond, both north and south of the river, generally class B/C type product, but functional and reasonably priced. There are also several free-standing purchase opportunities under 40,000 square feet available in the suburban sector of the northwest quadrant. The second quarter ended with four large facilities (two in the city of Richmond and two in Henrico County) going under contract to users, which further impacted the availability of freestanding facilities for owner/users looking to relocate into facilities with a minimum of 40,000 square feet. Local expansion has comprised approximately 78 percent of large industrial sales since the third quarter of 2012, with 14 of the last 18 major transfers (totaling approximately 1 million square feet). The majority of these acquisitions involved end users purchasing Class B facilities for manufacturing/warehousing …

September 3, 2013

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