Hampton Roads November 2021 – Key Take-Aways
• Cathie Vick with the Port of Virginia provided a presentation on the Portsmouth Marine Terminal, the new wind energy hub of the future.
o Dominion Energy currently has the largest wind energy project underway on the east coast aimed to produce 2,640 megawatts of energy. It can power 660,000 homes.
o Aside from the clean energy these projects bring opportunity to the area. The offshore wind industry has never invested in North America.
o There are several international companies involved in manufacturing the required materials to get this project underway, and they are looking to attract all of them here. They want them to come to VA, not just for the Dominion Energy project, but all the offshore wind energy projects happening off of the East Coast.
• Richard Crouch with Vandeventer Black
o Things continue to be very busy and expect to continue to be very busy through the end of the first quarter 2022.
o Properties are selling in mass right now. Even properties that have been held for almost 7 years are selling in mass.
• Chris Ambrosio with Vandeventer Black
o Cap rates are still ridiculously low compared to what the market norm is.
o There is plenty of money available and deal flow is happening.
o In regard to ground up construction, they are heavily active and building everywhere.
o In doing business internationally there is a very different culture of negotiation from one country to the next. This definitely comes into play when pursuing deals and making big dollar decisions with companies bringing business here to the US.
• Ashton Williamson with Colliers
o The demand they are seeing for space is constant and strong, but the challenges deal with demand vs supply.
o Because of the imbalance in supply and demand they are seeing an unprecedented rent growth of almost 50% over the last few years.
• Dan Shelton with Whiting-Tuner
o They are still seeing steady healthcare work.
o There is some interest in the wind and solar field, however as a local office they are slowly stepping into that.
o From a supply chain standpoint nothing is getting better and lead times are getting longer and longer.
o “The days of walking into a meeting and feeling confident about what a job will exactly cost are over.” It is getting harder and harder to get customers to understand that their overall number needs to have a very heavy contingency figured into it.
o Roofing materials are still a problem to acquire, and steel although attainable, have prices are all over the place.
• Greg Schmitt with Kimley-Horn
o Still working on the Portsmouth Casino.
o There is still a lot of focus on quick serve retail, car washes, etc.
o They learned from the last recession that they cannot allow there to be gaps in our staff mix. They have been able to establish a really healthy staff mix from senior folks to mid-levels to college hires.
• Josh Gerloff with RRMM Architects
o Dollar Tree, 7-11, and Total Wine are all companies they do work with across the country, and they are still going “gang busters”.
o Grocery stores are still doing very well.
• Keith Slattum with Dollar Bank
o Banks are going to continue to be big purchasers in the bond market for about the next three years. Banks have actually doubled their bond purchases over the past year.
o A good portion of the PPP loans have been forgiven, and because the borrowers of these loans waited to spend the funds, they received due to uncertainty in the repayment process, there is an abundance of cash available sitting in the banks and accessible to these businesses. This equals out to low interest rates.
o Have even seen fixed rates on a construction loan which is unheard of. It is a good time to borrow money.
o All of this is eventually going to come back around, and the end result is possible foreclosures.
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