Richmond Office Market
The Richmond office market experienced 94,000 square feet of negative net absorption during Q1 2024 and ended the quarter at a 15.0% vacancy rate. Despite this, the market continues to perform impressively relative to other major office markets. The Richmond market has shown resilience during the recent economic downturn, as leasing activity hovered close to historical averages from 2020-2023. This positive activity continued during Q1 2024, with the market seeing 0.4 MSF of leasing activity during the quarter, in line with the market’s first-quarter average of 0.5 MSF. New leases drove the leasing market in Q1 2024, evidenced by four of the top five transactions being new leases. Furthermore, four of the top five transactions were located in the Innsbrook submarket, which remains a premier submarket in the region.
Richmond Industrial Market
The market continues to see large amounts of positive absorption, experiencing 2.5 MSF of positive net absorption during Q1 2024. All of this positive absorption has created a tight market, with a vacancy rate of only 3.6% to end the quarter. Average asking rents ended Q1 2024 at $8.88 PSF, an increase of 8.6% year-over-year. Overall, the market has seen an impressive 48.5% increase in rents since the beginning of 2020. The market’s development remains strong, experiencing almost 10.0 MSF of deliveries in 2022 and over 5.0 MSF of deliveries in 2023, much higher than the decade’s annual average of 2.7 MSF. Development remained impressive during Q1 2024, ending the quarter with over 3.0 MSF of deliveries and 6.0 MSF under construction