Richmond December 2021 – Key Take Aways
- Mike Cobb with CoStar Group provided a ‘State of the Richmond Market’ Overview:
- Multi-Family Market:
The vacancy rates over the past 18 months have decreased and are below 5%.
There are 6,000 new units under construction and the city is attracting new investors to Richmond for the first time.
The rent index had a growth rate of 11.5% this year.
Richmond’s multi-family market growth is ranked high in the top 50 cities around the county.
CoStar is able to assess what Richmond renters are looking for and it is studio and one-bedroom apartments. Last year, due to COVID and the need to work from home, renters were looking for larger three or four bedrooms because they needed more space. - Office Market:
The vacancy rate is at 7% which is healthy.
Richmond leasing activity is exceeding 300K sq ft in 2021 and subleasing is at a 15 year high.
The area of Innsbrook has the most office sublease space – at 38%.
Office development is limited and not a lot under construction in Richmond.
Over a 15 year period, office rent growth is at 4% - Industrial Market – involves logistics and manufacturing:
Only a 3% vacancy – industrial development is soaring in Richmond –passing 10 million a sq ft in construction – 1/3 of it due to Amazon.
Industrial development under construction as its share of inventory is 2nd in the country.
Industrial rent growth is off the charts at 7.5% - Retail Market
Vacancy is at 5% and everybody assumed it would be a lot higher due to COVID – but not in Richmond.
The malls and big box stores were closing over 2021 and rents declined.
The leasing activity in Richmond has been more towards grocery stores and fitness centers.
Leases for retails stores have been getting smaller or shorter at 15 year lows and that is across the board nationally.
Development is limited in Richmond but new construction developers have been looking at properties that would be more open air areas.
- Multi-Family Market:
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