The Hampton Roads Industrial market ended the first quarter 2018 with a vacancy rate of 4.1%, down from the previous quarter. Net absorption was positive at 208,382 square feet. Triple net rental rates ended the fourth quarter at $5.50, an increase from $5.34 in the previous quarter.
With industrial product remaining scare, the market continues to remain tight, without much momentum. Obsolete buildings continue to pose a challenge to users, who are looking for more state of the art facilities. Industrial Class A investment sales are also seeing little velocity.
Increased investments in speculative warehouse development demonstrates the industry's confidence in the direction and future of the Port of Virginia.
Suffolk is seeing plenty of action, with developer Panattoni recently completing a 284,580 SF Class A warehouse. This was the first pure speculative development in Hampton Roads in over 10 years. The building has already signed a 200K SF user. The Suffolk area is beginning to see increased industrial interest as trucks from the Port of Virginia choose to take route 58 to avoid traffic on the Peninsula.
In Portsmouth, InterChange Group's expansion to their Portsmouth Logistics Center is almost complete. The completion of the nearly 200,000-square-foot facility comes amid the expansion of the Panama Canal and the Port's increased activity and newfound ability to handle larger cargo ships.
Hampton Roads Industrial Snapshot 2018 Q1
Author: Statia Gibson
Date Published: 04/15/2018