Suburban office development is ramping up in the Norfolk market, as two large, long-term office projects are underway. On the Southside, the first phase of speculative (spec) office space at Summit Pointe began construction in February, which will bring 150,003 sq. ft. of Class A office space to the Greenbrier submarket. On the Peninsula, Building One at Tech Center of Oyster Point is expected to be delivered to market by May, which will bring 80,000 sq. ft. of Class A office space to the Oyster Point submarket.
This is the most construction the Norfolk office market has seen since 2016.
Norfolk’s vacancy remains historically low at 10.7%, 195 basis points (bps) lower than a year ago, as the trailing 12-month net absorption sits at 449,073 sq. ft. of positive absorption. There were also no deliveries throughout 2018, which makes the aforementioned development projects that much more important to the region. Throughout the quarter the market remained stable, with only 4,587 sq. ft. of positive absorption and average asking rents slightly increasing by $0.19, ending Q1 2019 at $19.65. Most experts expect office vacancies and rents to remain stable throughout 2019.