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Q2 2022 Norfolk Office Research Report

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“The market informs us that CPI is up 9.1% year-over-year, interest rates were raised .75 basis points by the Fed, with two more expected escalations by the end of the third quarter, and S&P and our portfolios are down more than 20%. What is a tenant rep to make of this, and how can we deal with Building Operating Expenses, as well as rent escalators throughout the lease term, while in discussions with the tenant? Asset Management has been reporting a $5-7 per sq. ft. average pass thru after base year for suburban Class A buildings. What will the new number be with OPEX escalations in line items such as RE taxes and insurance and utilities and repairs, just to mention a few? As representatives of both LL and tenant, we need to stay informed and be prepared to advise our clients. Fortunately, we have super asset managers to help us.” Kevin Curran, First Vice President

 

Key Takeaways

  • Rents remained relatively flat during Q2 2022, ending the quarter at $21.02. This is a decrease of $0.08 quarter-over-quarter, but an increase of $0.25 year-over-year, highlighting the stabilization of rents since the initial negative effects of the pandemic.
  • Available sublet space remains prevalent, with 343,000 square feet of sublet space available in the market to end Q2 2022. This is more than three times the amount of available sublet space that the market saw in Q2 2020.
  • The market saw over 390,000 square feet of leasing activity during Q2 2022.

Norfolk Q2 2022 Office

Q2 2022 Norfolk Office Research Report

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Related Experts

Persifor Frazer

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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.
 
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J. Scott Adams, CCIM, has over 27 years’ experience in the commercial real estate industry as an investment sales broker, corporate leader, project manager, and consultant.  Since 1993, Mr. Adams has led the negotiation and sale closings of $1.7 Billion of investment sales of office, office/flex, and industrial properties, primarily in the Virginia markets of Hampton Roads, Richmond, and Charlottesville. He has consistently been recognized as a top regional dealmaker and trusted adviser for institutional and local owners. Mr. Adams remains an active investment sales broker in addition to his corporate leadership responsibilities.

As President of Colliers I Virginia, Mr. Adams is primarily responsible for leading the Colliers International brokerage and asset services teams to be the top performer throughout Southeast and Central Virginia. Mr. Adams has leadership responsibilities for all regional corporate support functions in that region as well. Beginning fall 2020, Mr. Adams will also have leadership oversight for the Raleigh, NC market. 

Prior to Colliers International, Mr. Adams was President for CBRE’s Mid-South Region Affiliate Offices (including offices in Virginia and throughout North Carolina) as well as a Senior Consultant with Kenneth Leventhal & Company (now part of EY) in their Washington, D.C. office. 

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Kevin Curran

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Kevin Curran is a First Vice President in brokerage services with a focus on development sites for a broad range of retail, industrial, medical, and other commercial uses as well as office, industrial and retail leasing and sales.

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Pat Mugler

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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.
 
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Gray Randolph

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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

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Ricky Anderson

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Christopher Kieran

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Brian Davidson

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After graduating from the University of Virginia in 2016, Brian Davidson quickly became an integral part of the brokerage team representing owners and occupiers of office and industrial properties. Since 2016, Brian has negotiated over 400 transactions valued at over $200 million. Clients have included defense contractors, REITS, national corporations, medical practices and local businesses and developers. A lifelong area native, Brian has a wellfounded knowledge of the local market and has relationships with many local firms and business leaders. With support from his entire Colliers team, Brian provides the following services to his clients with a strong emphasis on teamwork, communication, and the highest level of customer service:
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