Large blocks of office space in the Innsbrook and Short Pump submarkets are going fast. That’s the word from Jones Lang LaSalle, a financial and professional services firm that specializes in real estate. In a recent report, it noted that new, renewing or expanding tenants recently leased nearly 420,000 square feet of office space in these submarkets.
The deals have dropped the vacancy rate from 26 percent in the first quarter of 2010 to 19.2 percent. While large spaces are scarce, there are numerous options available for 5,000 to 20,000 square feet, the report says.
“Large office tenants are strategically positioning themselves to take advantage of the market before landlords regain control,” Jimmy Appich of Jones Lang LaSalle’s Richmond office said in a statement. “As a result, large blocks of office space in the Innsbrook and Short Pump submarkets are filling up, and it is only a matter of time until the last few remaining large blocks of contiguous office space are taken.”
Larger than Richmond’s downtown Central Business District, the Innsbrook and Short Pump corridor offers retail, a concentrated office market with many large employers, residential neighborhoods and access to the area’s major thoroughfares. In the last year, major corporations such as SnagAJob.com, Capital One Financial Corp., Elephant Insurance, Ironworks, General Cigar and SunTrust bank have moved into buildings in the area.
According to Jones Lang LaSalle:
• 36.9 percent of all suburban Richmond leasing activity during 2010 took place in these submarkets.
• Vacancy in the Innsbrook and Short Pump submarkets has decreased by 6.8 percent in less than a year — primarily as a result of large blocks of office space being absorbed.
• There are only five Class A contiguous blocks of more than 50,000 square feet in the entire Richmond market.
• There are only three Class A contiguous blocks of more than 100,000 square feet in the Richmond market, and all of them are located in the Innsbrook area.
• There are only two Class A contiguous blocks of more than 150,000 square feet in the Richmond market, and both are located in the Innsbrook area.
• There are six large- block office tenants currently in the market for more than 700,000 square feet, a demand that exceeds the existing supply.
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