Hampton Roads Office Snapshot 2018 Q2

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The Hampton Roads office market experienced a steady quarter, with vacancy at 9.1%, down from 9.6% last quarter, and average asking rents increased from last quarter, averaging $17.95 per square foot per year. Office rents have finally started to rise, but the slow rebound has fallen behind the national average by a wide margin. Net absorption in the first quarter for the Hampton Roads office market was positive 182,649 square feet. Office building sales in Hampton Roads fell during the first quarter 2018, also down compared to Q2 2017. During the second quarter 2018, one building totaling
7,000 square feet was completed in the Hampton Roads market area and 643,943 square feet of office space under construction at the end of the second quarter 2018.

The market remains slow and steady, with a slight uptick in rental rates and a shift in activity from downtown Norfolk to southside. The Greenbrier submarket had a 3.87% vacancy rate as of the end of the second quarter, well below the submarket's 10 year average of 8.48%. The office market on the peninsula remains soft with little to no rent growth and steady sales volumes. 

Steady job growth of more than 5% in the professional and business services sector has benefited demand, with annual net absorption topping 700,000 SF as of June thanks to large move-ins from ADP and Movement Mortgage. 

Offices relocating fueled by lease expirations are moving to upgraded office premises with better amenities. This quarter, Trader Publishing moved its corporate offices into Dominion Tower from 150 Granby Street. Although the space is only slightly larger, the new space is more efficient and facilitates more collaborative work flows.  


Hampton Roads Office Snapshot 2018 Q2

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