Richmond Office Market
The Richmond office market experienced 64,000 square feet of negative net absorption during Q1 2025 and ended the quarter at a 15.0% vacancy rate, an increase of 60 bps quarter-over-quarter. The Northwest and Downtown regions were the drivers of the market’s negative net absorption, experiencing 115,000 SF and 65,000 SF of negative net absorption, respectively. Overall, however, the Richmond market continues to perform impressively relative to other major markets. Rents remained stable to begin 2025, ending the first quarter at $22.62 PSF, flat quarter-over-quarter and an increase of 0.8% year-over-year. There was one delivery totaling 150,000 SF during the quarter. This delivery, located at 7053 Celebration Park Avenue, brought 150,000 square feet of fully occupied space to the Southwest region. The development was a build-to-suit for Chesterfield County and Timmons Engineering. There remains one property, totaling 51,000 SF, under construction to end the quarter.
Richmond Industrial Market
During Q1 2025, Richmond experienced over 800,000 SF of positive net absorption. This positive net absorption was largely due to the Northeast quadrant, which saw over 800,000 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 the quarter at a 5.0% vacancy rate, tighter than the historical average of 5.9% and the national average of 6.7%. Although vacancy expanded 10 bps during Q1 2025, this expansion was solely due to deliveries outpacing absorption. Average asking rents ended Q1 2025 at $9.52 PSF, an increase of 3.5% year-over-year. Overall, the market has seen a 56.3% increase in rents since the beginning of 2020. The market’s development remains strong, ending 2024 with almost 4.7 MSF of deliveries, much higher than the decade’s annual average of 3.0 MSF. Development continued strong to begin 2025, ending Q1 2025 with 1.0 MSF of deliveries. User demand is keeping the pipeline steady looking forward into 2025 and 2026.