The Richmond VA retail market experienced a slight decline in market conditions in the first quarter 2018. The vacancy rate increased to 5.2%, up slightly from the fourth quarter. Net absorption was negative 129,120 square feet, and can be expected to remain negative through the rest of 2018 because of the large amounts of big box vacancies. Rental rates decreased slightly this quarter, ending at $14.76 per square foot per year. We can expect rents to remain flat or see a decrease over the next twelve months. 

The biggest retail announcement of the fourth quarter was the closure of Toys 'R' Us stores across the nation. Richmond will see a challenge with these big box vacancies because of existing clauses and co-tenancy requirements. The market is continuing to face the challenge of backfilling other vacant big-box stores. Locally, moderately priced retailers like Kirklands and Duluth have been filling these spaces, as well as experiential retail uses like trampoline parks, golf, bowling and climbing gyms. 

Food also continues to be a huge retail trend in Richmond with continued openings of local, chef-driven restaurants as well as new food delivery concepts through grocery programs (like Kroger's ClickList), third party apps (like Instacart), Amazon's acquisition of Whole Foods, as well as local farm delivery programs and CSA memberships. 

Retailers that are thriving offer an omni-channel retail strategy-shoppers check prices, compare products, research reviews, and consult social media before buying in a brick & mortar store. As the retail landscape evolves, the retailers that adopt this new strategy will be the ones that continue to thrive.