Richmond Office Market
The Richmond office market experienced 112,000 square feet of negative net absorption during Q2 2025 and ended the quarter at a 15.3% vacancy rate, an increase of 30 bps quarter-over-quarter. The Northwest region was the main driver of the market’s negative net absorption, experiencing 180,000 SF of negative net absorption during the quarter. Overall, however, the Richmond market continues to perform impressively relative to other major markets. Rents remained stable to begin 2025, ending the second quarter at $22.71 PSF, relatively flat quarter-over-quarter but an increase of 1.7% year-over-year. There are two properties totaling 101,000 SF under construction in the market. One property, totaling 51,000 SF, is under construction in the Northwest region, while the second property, totaling 50,000 SF, is under construction in the Southwest region.
Richmond Industrial Market
During the first half of 2025, Richmond experienced over 1.3 MSF of positive net absorption. This positive net absorption was largely due to the Northeast quadrant, which saw over 900,000 of positive net absorption due to the delivery of an 800,000-square-foot AutoZone Distribution Center. Also contributing to the positive net absorption was Amazon occupying 188,000 SF of space at 1701 Bermuda Hundred Road within the Southeast region. The market remained tight, ending Q2 2025 at a 5.1% vacancy rate, tighter than the historical average of 5.7% and the national average of 7.5%. Although vacancy expanded 10 bps during Q2 2025, this expansion was solely due to deliveries outpacing absorption. Average asking rents ended Q2 2025 at $9.38 PSF, an increase of 1.2% year-over-year. Overall, the market has seen a 55.0% increase in rents since the beginning of 2020. The market’s development remains strong, ending 2024 with almost 3.1 MSF of deliveries, higher than the decade’s annual average of 2.6 MSF. Development continued strong to begin 2025, ending the first half of 2025 with 1.3 MSF of deliveries. User demand is keeping the pipeline steady looking forward into 2025 and 2026.