Hampton Roads February 2022 – Key Take-Aways
Richard Crouch – Vandeventer Black
• Not too much has changed in terms of areas to strike; industrial, multi family, and self-storage.
• A trend that has emerged, specifically in one client, is converting existing hotels into multifamily or into senior housing.
o Some localities are cooperative as it seems to solve a shortage problem.
• Another trend we are seeing by virtue of it being a seller’s market at the moment is a lot of deposits that are completely hard from day one.
• The offshore wind initiative is making some changes in the market when it comes to the manufacturing sector.
Chris Ambrosio – Vandeventer Black
• For the first time we have recently witnessed a partially refundable earnest money deposit, which seems to be a good compromise.
o Depending on the size of the deal, if the earnest money deposit is $100k, maybe $25k or $50k of it is not refundable immediately but the buyer can get the remaining portion back for any reason or no reason or for specified reasons as well.
• It is very much still a seller’s market.
Drew Ott – Colliers International
• Seeing an uptick in activity when it comes to the office world.
• Companies are in need of space and larger chunks of space are going to become available soon
o The hope is landlords will be a bit more receptive when it comes to their asking rates.
• There will be more opportunities for companies to come into central business districts that didn’t have the opportunity before.
• Lots of behavioral health and in home health care companies looking to expand.
Jeff Parker – Colliers International
• Retail wise there have been a handful of shopping center sales recently.
• Large mixed entertainment users are filling these large vacant big box spaces.
• Retail has gotten a lot more active.
• Cap rates on retail centers low to mid 6s if they have some national credit. Still historically low.
• In regard to motel conversions, the city of Norfolk recently converted a budget lodge to get people off of the street and out of tents before the cold hit.
Victoria Pickett – Colliers International
• Overall market rent growth last year finished out in excess of 13%, with some markets seeing 17% or 18%.
• Occupancy is still very high at about 97% plus. Some are a little lower, but none less than 95%.
• Slight concern with the RPP program expiring in June. Not expecting a mass eviction wave, but there will be evictions once RPP plan runs out.
• Investment Sales are as aggressive as ever. Cap rates are right around a flat 4 sometimes 3.
Hank Hankins – Colliers International
• It’s a good thing that the RPP is coming to an end. With occupancy being so tight, it will allow for those who can afford to rent the opportunity to do so.
• Interest rates have gone up, but it hasn’t really affected pricing yet.
Dawn Best – Vansant Gusler
• The COPN (certificate of public need) process has been significantly increased.
• In regard to the healthcare space, the trend that has been seen is the operating rooms, stand alones, the “doc in a box” are increasing versus the mega facilities that do all in one.
• Industrial is coming along nicely; and have a ton of multifamily projects in work.
• Healthcare is on an upward trend.
Dan Shelton – Whiting-Turner
• Materials are still a challenge to get to the site.
• It seems people are still stretched thin on employees.
• Industrial is still going strong.
• Pricing could hopefully level out here in the second quarter.
Keith Slattum – Dollar Bank
• Several people are relocating to the area from New York or the DC area.
• Deals are requiring more cash up front to project and cover for fluctuations in rates throughout the completion of projects.
• Highly encourage to have conversations with customers on what the deal could look like towards the end.
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