2010 commercial real estate forecast for Hampton Roads: cautious optimism
- March 11, 2010
Nearly 600 Hampton Roads real estate professionals turned out yesterday for a market review that provided a rehash of a tough 2009 and a more optimistic tone for 2010.
The general consensus by speakers at the 15th annual Hampton Roads Real Estate and Market Review sponsored by the E. V. Williams Center for Real Estate and Economic Development at Old Dominion University is that the worst is probably over. They look for 2010 to be a time when the industry can begin moving up from the bottom.
Bill Throne, a commercial sales and leasing associate with Thalhimer, said he knows of four major deals in the works now. One of them, a bid by an Atlanta developer to convert the former Ford assembly plant in Norfolk into site for alternative energy manufacturing, would take 2.3 million square feet of empty industrial space off the market. Closing just that single deal would make a dent in the region’s overall industrial vacancy rate of 12.9 percent. “In 2010, I look at commercial real estate as an Easter egg hunt,” said Throne. “You have to search for those hard-to-find eggs and get your equity piece secure.”
In the office sector, the region’s vacancy rate stood at 14.5 percent at the end of 2009, below a national rate of 16 percent. The only new major project going up is the Wells Fargo high-rise tower in downtown Norfolk. With little else in the construction pipeline, Craig Cope, a vice president with Liberty Property Trust, noted that Hampton Roads experienced positive absorption of its office space for the fifth straight year, a trend that’s chipping away at the overall office vacancy rate.
Retail had the lowest overall vacancy rate for 2009 at 9.8 percent. There was good news in this sector. Grocer Harris Teeter opened three stores in the region last year, new players such as hhgregg and the Restaurant Depot entered the market, and the Peninsula Town Center in Hampton continues to open new space. David Machupa with the retail services group of Thalhimer, said the center — site of the old Coliseum Mall — will open an additional 250,000 square feet today as part of an ongoing renovation that is bringing new tenants to the market.