CBRE reports dramatic improvement in Richmond office market in 2011
- January 30, 2012
Fourth quarter was strongest in years with 491,893 square feet of positive absorption.
The Richmond office market improved dramatically during 2011, according to a market report by CBRE. Despite lingering economic concerns, the fourth quarter proved to be the strongest quarter in years for the Richmond region with 491,893 square feet of positive net absorption. This figure compares to 40,000 square feet of positive absorption during an average quarter for the past five years. (Net absorption refers to the change in occupied space in a commercial market and is used to measure change in demand).
Other good signs: Office vacancy fell to 15.3 percent in the fourth quarter, down from 17.2 percent in the previous quarter. In addition, lease rates rose to their highest level since the third quarter of 2009, with the average rate at $18.42 per square foot.
Driving the stronger performance in 2011 was limited new construction — which helped the leasing market improve — and several major deals including Henrico County’s decision to buy the 285,000-square-foot former Best Products Building on Parham Road in Henrico County. Plus, Capital One Financial Corp. continues to be a major player in the Innsbrook submarket, leasing more than 100,000 square feet during the fourth quarter at multiple locations.