12/17/20 Hampton Roads Mastermind Group Meeting

Hampton Roads December 2021 – Key Take-Aways

• • Richard Crouch with Vandeventer Black is seeing what he believes is an anomaly in the retail market. He has one client who is aggressively expanding in the Mid-Atlantic region, since mid-December he has seen 12 new leases and probably another 18 or so coming before year end along with 400 new employees. This is not indicative of the market. He also said that he is seeing more reception to force majeure clauses specifically with respect to payment deferment due to pandemic and COVID conditions.

• • Don Crigger provided and update on an international survey Colliers conducted in October, results are showing that work from home a day or two a week is likely here to stay and is essential as an offering on the menu for companies to be competitive in the ‘war for talent.’ However, the social and cultural aspect of being together is important and not going away either.

• • Patrick Gill with Colliers reported that investment sales started off the year very active primarily in the industrial sector and somewhat in the net lease sector. He has 4 industrial properties, and in each case the final price is at or above their ask. The Norfolk area ended 2020 with a 1.6% vacancy rate in the industrial market, in the 4th quarter 400,000SF of space was absorbed.

• • Hank Hankins said that multi-family did over 700M last year and believes that is at least 50% higher than the 3-year average. Low interest rates are goo but can be a detriment to some in the sales market, a lot of groups that purchased or refinanced in the last 5 – 6 years cannot sell right now because prepayments are a hinderance. Victoria Pickett added that 2021 is starting out slow, there is a lack of product and most deals the come to market are loan assumptions.

• • On the retail side of things, Jeff Parker is starting to see a little uptick on the leasing front. Publix is ‘dipping their toe’ in the market. Quick serve restaurants, dollar trees and stand-alone auto parts are selling like crazy. Interest rates are low and cap rates are compressed, there is a lot of money out there in the 1M to 3M range.

• • Mike Moore with London Norfolk state that the market continues to be touch for insurance, premiums are higher and terms are tighter. There was a ruling in the UK Supreme court that a lot of insurance companies should be paying business interruption claims due to COVID. Not certain if this is something that will carry over to the United States, but, interesting to see.

• • John Berotti with Whiting-Turner reported that the company sold more in 2020 than in 2019. He feels optimistic about where they are currently. The have a new national group called ‘Retail Reimagined’ that is starting a program following some of their national clients around to better understand what they need and how they can tackle .

• • Dave France with Kimley-Horn is busier than he has ever been. The casino project in Portsmith is kicking off. The industrial market had a ‘banger’ of a year last year and he does not expect that to slow down any. Seeing new developers coming into the market with an appetite to do speculative development. Kimley-Horn is planning to have all of their employees back in the office by March, with Partners and senior level staff returning at the beginning of February and the remainder of the staff returning by March, however, work from home will still be available as necessary.

• Chris Crouch with RRMM Architects is seeing a lot of repurposing of malls with 2 under contract now and in talks with 2 others. Also seeing a lot of re-doing of drive thrus. Also seeing people wanting very aggressive schedules to make up for lost time over the last 10 months.