Richmond Office Market
The Richmond office market experienced 91,000 square feet of positive net absorption during 2024 and ended the year at a 14.1% vacancy rate. Although this is a slight expansion of the vacancy by 20 bps year-over-year, that is solely due to a delivery in lease-up. The Northwest and Southwest regions were the drivers of the market’s positive net absorption, with each experiencing over 100,000 SF of annual positive net absorption, while Downtown was the worst performing region, experiencing almost 50,000 SF of negative net absorption throughout the year. Overall, the Richmond market continues to perform impressively relative to other major markets. There were four deliveries totaling almost 200,000 SF during the year, with the majority of the development in the Northwest and Southwest regions. There remain two properties, totaling 200,000 SF, under construction to end the year, one property in the Northwest and one property in the Southwest.
Richmond Industrial Market
During 2024, Richmond experienced 2.4 MSF of positive net absorption. This positive net absorption was due to the Southeast quadrant, which saw almost 2.6 MSF of positive net absorption due to multiple large occupancies during the year. The market remained historically tight, ending 2024 at a 4.6% vacancy rate, much tighter than the historical average of 5.8% and tighter than the national average of 6.6%. For further context, the expansion in vacancy during 2024 was solely due to deliveries outpacing absorption. Average asking rents ended 2024 at $9.39 PSF, an increase of 6.2% year-over-year. Overall, the market has seen an impressive 55.2% increase in rents since the beginning of 2020.The market’s development remains strong, experiencing almost 10.0 MSF of deliveries in 2022 and over 5.2 MSF of deliveries in 2023, much higher than the decade’s annual average of 3.0 MSF. Development continued strong in 2024, ending the year with almost 4.7 MSF of deliveries. User demand is keeping the pipeline steady looking forward into 2025 and 2026.