The Richmond, VA retail market experienced a slight improvement in market conditions in the second quarter 2018. The vacancy rate went from 5.8% in the previous quarter to 5.5% in the current quarter. Net absorption was positive 114,607 square feet, and quoted rental rates increased from first quarter 2018 levels, ending at $15.37 per square foot per year. A total of 4 retail buildings with 34,412 square feet of retail space were delivered to the market in the quarter, with 542,984 square feet still under construction at the end of the quarter.
Big box spaces continue to present themselves as challenges, and creative uses continue to be the top lease types. This quarter we have also begun to see self-storage, medical and hotel users repurposing these big spaces. Teardowns may become a trend, three of which are currently underway - Publix has two teardowns at the Village Shopping Center and Carytown, and Spring Rock Green has begun demolition for a future Conn's.
Food & restaurants continue to thrive. A handful of local concepts including Cobra Cabana, Nate's Bagel's, Grisette and Hot Diggity Donuts all signed new leases for restaurants downtown, where there is limited second generation space. The suburbs on the other hand remain a tenant's market, saw the continuing addition of established downtown food concepts - this quarter, both The Pit and the Peel and Chocolates by Kelly signed leases at Short Pump Town Center.
Shopping centers are continuing to change hands. In Mechanicsville, Hanover Square North Shopping Center sold for $12.173 million to an affiliate of Medalist Diversified, REIT, a Richmond-based investment firm. In Scott's Addition, a group made up of Spy Rock Real Estate and principals with the Stanley Shield Partnership purchased the Interbake Foods warehouse property, an adjoining parcel at Terminal Place, and neighboring River City Roll. The group is eyeing the properties for a mixed-use development that would include residential units above commercial space.