The Hampton Roads retail market did not experience much change in market conditions in the fourth quarter 2017. The vacancy rate went from 4.9% in the previous quarter to 4.8% in the current quarter. Net absorption was positive 112,388 square feet, and vacant sublease space decreased by 25,447 square feet. Quoted rental rates increased from third quarter 2017 levels, ending at $13.91 per square foot per year.

Big boxes continue to face a challenge as stores shift their focus to online sales, and downsize or reduce their footprints. Landlords will need to creatively backfill the spaces left behind, some of which have included trampoline parks, self-storage, hotels as well as full teardowns for multifamily uses.

Food continues its massive presence in the market and there has been a fair amount of local and national restaurant activity. New QSRs have emerged across the market, and we will begin to see specialized food exclusions in shopping centers, leading to more diverse food opportunities throughout the market.