Overall, the Richmond office market has remained steady throughout the fourth quarter, with rents decreasing slightly to $18.50 PSF from their third quarter peak of $18.90. The vacancy rate decreased to 7.3%, down over the previous quarter. Net absorption was positive totaling 219,682 square feet.
The flight to downtown continued through the fourth quarter, where 1,600 new jobs were created in 2017. This trend will be one to watch in 2018 as The Pulse nears completion, parking becomes more scarce and more incubator spaces are established. The popularity of Scott's Addition especially holds steady as the demand for creative office space remains high and rents reach an average of $20.00 PSF NNN.
In the suburbs, amenities such as fitness centers, shared conference rooms, and walking trails are becoming necessary incentives to attract tenants. A handful of companies have also exercised early renewals with "blend and extend transactions" in the suburban office market.
Healthcare product remains solid and a few spec MOB's broke ground in the fourth quarter. A great deal of activity in the market has been smaller practices looking for ownership equity opportunities or small private practice suites off of hospital campuses.