Richmond Office Market
The Richmond office market experienced 187,000 square feet of positive net absorption during Q3 2024 and ended the quarter at a 15.1% vacancy rate. Although this is a contraction of 20 bps quarter-over-quarter, it is an expansion of 90 bps year-over-year. This positive net absorption was spread throughout the market, with the Downtown, Northwest, and Southwest submarkets all experiencing positive net absorption. Although market fundamentals have been softening since the beginning of the pandemic, the Richmond market continues to perform impressively relative to other major markets. There were two deliveries totaling 130,000 SF during the quarter. A 53,000-square-foot office building was delivered at 2230 West Broad Street within the Near West End submarket and a 77,000-square-foot medical office building was delivered at 15200 East West Road within the Route 288 Corridor.
Richmond Industrial Market
During Q3 2024, Richmond experienced 500,000 SF of positive net absorption. This positive net absorption was due to the Southeast quadrant, which saw over 600,000 SF of positive net absorption due to multiple large occupations during the quarter. The market remains historically tight with this positive net absorption, ending Q3 2024 at a 4.4% vacancy rate, much tighter than the historical average of 5.8%. For further context, the expansion in vacancy during 2024 is solely due to deliveries outpacing absorption. Average asking rents ended Q3 2024 at $9.18 PSF, an increase of 7.0% year-over-year. Overall, the market has seen an impressive 52.2% 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 5.0 MSF of deliveries in 2023, much higher than the decade’s annual average of 2.7 MSF. Development has slowed in 2024 but continued strong, as user demand is keeping the pipeline steady looking forward into 2025 and 2026