Commercial realty: Demand remains high
Trends are also pointing in a mostly positive direction for the region’s industrial, commercial and retail real estate markets, according to Ed Kimple, a senior vice president with Cushman & Wakefield | Thalhimer.
Office vacancy rates were at 9.2% for the second quarter, an increase over the 8.5% recorded in 2021’s first quarter. But Kimple and his cohorts see a silver lining due to increases in Department of Defense spending in the region, as well as Dominion Energy Inc.’s $7.8 billion offshore wind farm moving forward.
Demand for industrial space also remains high, with an overall 2.4% vacancy rate. Frito Lay recently leased a 228,000-square-foot former food processing plant and distribution center in Portsmouth, while smaller spaces in the Cavalier Industrial Park in Chesapeake received multiple offers less than a month after going on the market.
Though the pandemic caused fears for retail, Kimple notes that a 5.2% vacancy rate means “the market is really very healthy.” Box stores and casual restaurants that closed during the pandemic were already faltering beforehand, he says. In some cases, vacant big-box stores are being backfilled; a grocery store in Norfolk, for example, has been replaced by an AutoZone.
Although a full return to business was hampered late this summer by the highly contagious delta variant of COVID-19, Kimple says retailers remain optimistic. “You know, the only thing we’re really seeing is just the mask coming back.”