Vacancy in Richmond continued to tighten to post-recession lows with a 12-month vacancy rate of 9.6%. Lack of supply continued to favor owners, with low concessions and average asking rent rising by nearly a percent over the year to $19.78 per square foot. Three urban buildings delivered during the year totaling 90,000 square feet at year’s end with nearly 250,000* square feet of proposed space pre-leasing in Midtown, Manchester, and Short Pump.
Downtown, Owen’s and Minor occupied in 84,853 square feet in Riverfront Plaza, and Wells Fargo renewed in 100,782 square feet in Two James Center. In Midtown, Lumber Liquidators leased 53,000 square feet at Libbie Mill for its new HQ and call center. The suburbs saw Union Bank (soon Atlantic Union Bank) expand by 43,794 square feet in Innslake Center. The year finished with 269,853 square feet of net absorption, two and a half times its decade average.
Helping to accommodate new demand in 2019, a total of 200,000 square feet of Class A space was vacated in Innsbrook in Q4 2018. Downtown, the James Center continued to see major renovations and re-tenanting as owner, Riverstone Properties, continued to modernize the million square-foot complex. With owners throughout Richmond modernizing much of the 1.2 million square feet of vacant Class A space, Richmond enters 2019 with anticipation of meeting stronger demand.
*Noticeably impacting construction volume, exclusively-medical office buildings have been removed from the Richmond inventory. See the Colliers International Richmond medical office report expected later in 2019.