The Hampton Roads Industrial market ended the fourth quarter 2017 with a vacancy rate of 4.2% up from the previous quarter from 4.0%. The net absorption total for the fourth quarter was down for the first time in 2017 totaling negative 43,319 square feet. Vacant sublease space increased in the quarter, ending the quarter at 84,729 square feet. Rental rates ended the fourth quarter at $6.12, reflecting an increase of over 6% from the third quarter.
Despite the latest delivery of 200,000 square feet of speculative space at 2175 Elmhurst Lane in Portsmouth, the market continues to lack product, particularly new Class A high bay space which is extremely hard to find. A total of two buildings delivered to the market in the quarter totaling 224,000 square feet, with 256,282 square feet still under construction at the end of the quarter. Because of the lack of large product, some tenants are having to renew in place.
The delivery of 150,000 square feet at 137 Industrial Blvd on the peninsula is expected in the 1st quarter of 2018 and is the next large block of space coming on the market. Many tenants are now considering properties outside of the market to find space; only four leases in 2017 were over 100,000 square feet.
Hampton Roads Industrial Snapshot 2017 Q4
Author: Statia Gibson
Date Published: 01/15/2018