The Richmond office market experienced a solid quarter, with vacancy at 6.4%, down from the previous quarter at 7.1%. Average asking rents also decreased from last quarter, averaging $18.85 per square foot per year. Net absorption in the first quarter for the Richmond office market was negative 64,860 square feet.

The Glenside & Broad submarket saw a lot of activity this quarter, with a fair amount of midsize users (6-11k SF) as well as the sale of the Commonwealth Building to Red Starr Investments, and the Koger & Nelson Buildings to Equitable Real Estate Partners. In Q4 2016, Equitable purchased a portfolio of five buildings in Forest Office Park; this latest transaction brings their grand total to seven. 

Downtown remains sluggish and James Center is currently the only CBD Class A building with large blocks of space. With little inventory available, some tenants are exploring expansion options through "blends & extends" to their current lease.

Unemployment is at 3% - an all time low and a sign that the job market has become even more competitive - and is creating a struggle for some organizations looking to hire. According to a study by the ManpowerGroup, forty-six percent of U.S. employers report difficulty filling jobs. 

Activity in Scott's Addition continues to remain hot, with lots of tenants circling the area, although there is little to purchase. We can expect to see new office spaces in this submarket pop up throughout the rest of the year. We can expect that the 200,000-square-foot Sauer Center development further down Broad Street - which includes a new Whole Foods market - shouldn't have any trouble leasing their office space.