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Norfolk | Medical Office Year End Report 2021

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Medical office market performs well during 2021, led by quality, class A space.

“The Hampton Roads healthcare market experienced steady deal velocity during the 2nd half of 2021. We are seeing a bit of a “flight to quality” on the leasing side as Class A medical space continues to see positive absorption with increasing rental rates while Class B space saw slightly negative absorption for the year..." - Chris Kieran | Senior Vice President, Healthcare Services

Key Takeaways:

  • During 2021, the Norfolk medical office market experienced 31,730 square feet of positive net absorption, ending the year at an 8.3% vacancy rate. While the vacancy rate has leveled out since the initial effects from the pandemic, rents continue increasing, ending the year at $23.80 after a 2% annual increase.
  • Market rents have shown impressive gains in recent years, especially quality, Class A space. Since H1 2019, Class A rents have increased by 24%, ending 2021 at $26.71 per square foot.
  • Renewals continue to be the central theme in the medical office market. Sentara Healthcare renewed 48,000 square feet at 835 Glenrock Road in Norfolk and will continue to occupy the entire building. OrthoVirginia Inc renewed their space at Beach Medical Pavilion in Virginia Beach and expanded to occupy a total of 28,164 square feet. Lastly, Mary Immaculate Ambulatory Surgery Center renewed 14,852 square feet of space at Mary Immaculate Pavilion in Newport News.

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Norfolk | Medical Office Year End Report 2021

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Related Experts

Christopher Kieran

Senior Vice President

Norfolk - Main

Chris Kieran is a Principal in the Norfolk Colliers office and brings over 22 years of commercial real estate experience to his specialty of representing owners and occupiers of office and medical properties throughout Southeastern Virginia.

Chris has established himself as a leading leasing broker in the Hampton Roads market and has been recognized as a top producing broker by the Commercial Real Estate Alliance every year since 2001, winning numerous awards including the Deal of the Year in 2016. Having completed over 1,000 lease transactions of all sizes ranging from $100,000 to $60,000,000, Chris’ clients benefit from significant market knowledge and insight. Chris works with local, regional and institutional landlords providing a client focused approach to leasing and marketing strategy, transaction negotiations and financial analysis. Chris’ relentless drive to provide his clients best in class leasing services has resulted in many long-term client relationships including REITs who have trusted Chris with their portfolios for over 15 years.

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Persifor Frazer

Executive Vice President

Norfolk - Main

Executive Vice President and Principal, Perry Frazer has over 22 years of commercial real estate experience. Perry was named the Managing Director of the Hampton Roads office in 2014. As Managing Director, Perry manages all aspects of local business to generate and maintain maximum profitability. The emphasis is on integration of a variety of service lines for new business development and growing market share. Perry guides real estate managers, sales professionals, and the office manager in client relations, service orientation and consulting role as well as the effective and efficient operation of its office and accounts.

He has been a top ten regional producer every year since 2002 and over the past 15 years Perry has leased approximately 20 million square feet in the Hampton Roads market. Perry represents institutional Landlords in the Hampton Roads markets and has established himself as one of the leading office and flex brokers in the region. He has completed numerous large tenant representation assignments over the past five years.
 
Perry has earned the distinction as one of the leading brokers in Hampton Roads and one of the leading brokers in the entire Hampton Roads organization.

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Pat Mugler

Executive Vice President

Norfolk - Main

Pat Mugler has over 28 years’ experience in the commercial real estate industry as a broker. As an Executive Vice President and Principal in the Virginia offices, Pat has successfully closed  millions of square feet of lease transactions and participated in numerous institutional and local sales transactions as well. Mr. Mugler has twice been awarded the prestigious “Hunter A. Hogan Award”, for being the region’s highest producing broker.
 
Mr. Mugler serves as the Director of Brokerage Asset Services for office, flex and industrial leasing teams and has extensive experience across all product types including select land and retail assignments.  
 
In addition to extensive relationships with many of the region’s top landlords, Mr. Mugler has long-term tenant relationships with an impressive list of corporations including Maersk, PRA, Cox Communications, Canon Computers, LabCorp, Pitney Bowes, Morgan Stanley, Verizon, and many more Fortune 500 companies.

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Gray Randolph

Executive Vice President

Norfolk - Main

With over 30 years of experience in the commercial real estate industry, Gray Randolph has distinguished himself as a leading office broker in the Hampton Roads area, as well as across the United States and around the globe. Gray serves as an Executive Vice President and Principal for the Colliers | Virginia offices.

Gray specializes in suburban office sales and leasing for the company. He is a licensed broker in Virginia, North Carolina, and Tennessee. He has completed complex transactions throughout the country, and Europe, and has worked extensively with the professionals worldwide to close these transactions. In the last five years alone Gray has closed large transactions in London,  North Carolina, South Carolina, Texas, Nevada, California, Alabama, and the Washington D.C. area. 

In 2001, Gray became a member of the prestigious SIOR (Society of Commercial Real Estate Brokers). He has been a top producer in that arena for the past 20 years, and after closing several thousands of transactions in the last 30 years, he has a keen understanding of the complexities of many markets around the United States and Europe.

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Donald Crigger

Executive Vice President

Norfolk - Main

Executive Vice President and Principal with more than 30 years of experience, Don Crigger is an established industry leader and a consistent top producer in the Eastern Virginia commercial real estate market. Specializing in office properties (including medical office and office/warehouse), Crigger represents tenants to reduce their real estate occupancy costs while also negotiating the most flexible lease terms possible. Since 1987, Don has built a diverse clientele ranging from Fortune 500 companies to small businesses and has been directly involved in millions of square feet of lease and sale transactions on behalf of owners and occupiers. Crigger also has extensive experience in strategy and consulting, build-to-suit development transactions, corporate tenant relocations, and in depth location analysis and site evaluation.  

A native of the Virginia Beach/Norfolk area, Don is also active in community and civic organizations. He currently serves on the executive committee for Virginia Beach Vision (a regional business leadership organization) and previously the Downtown Norfolk Council. 

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