Skip to main content Skip to footer

Norfolk Industrial Market Ends 2020 with Record-Setting Occupancy

Download Report
alt=""

Norfolk Industrial Q4 2020 Marketview

Market Overview
>Norfolk’s vacancy rate sat at a record low of 1.6% to end Q4 2020, with only 1.3%of warehouse space and 4.9% of flex space vacant.  This is the lowest vacancy the market has seen in the past decade, as the vacancy rate has been tightening since it reached a decade-high of 8.9% in 2012.  It decreased 54 basis points (bps) quarter-over-quarter and 139 bps year-over-year.  The market saw 421,045 square feet of positive net absorption during the quarter and a total of almost 1.7 million square feet of positive net absorption throughout 2020.  There were a few large occupations during the quarter that helped contribute to this positive absorption, such as Reach International occupying 122,916 square feet of space at Commonwealth Storage Facility in Suffolk and Aclara Smart Grid Solutions, Eimskip Logistics, and Grand Brands LLC occupying 5816 Ward Court, leading to over 180,000 square feet of positive absorption in the Airport Industrial Park submarket.

>Average asking rents ended Q4 2020 at $5.58, an increase of $0.01 quarter-over-quarter and $0.70 year-over-year.  Rents are the highest they have been over the last decade, with market rents averaging $4.92 over that period.  Much of this can be attributed to a tight, owner-favorable market that lacks available quality space for buyers and tenants.

Key Events

>Following Amazon’s announcement earlier this year of building a fulfillment center and distribution center that will total almost 4.5 million square feet, Amazon announced it is going to occupy two delivery stations in 2021, creating more than 200 jobs.  One location is 1400 Sewells Point Road in Norfolk Industrial Park.  At this location, Amazon will be refitting a 165,000 square-foot warehouse into a new delivery station.  The second delivery station will be located at a long-vacant Kmart on Mercury Boulevard of the Copeland/Lower Peninsula submarket.  These events highlight that Amazon is willing to refit large box retail spaces as well as older industrial product, with location being a critical factor in their decision-making.  These delivery stations, also known as last-mile distribution facilities, will load packages received from nearby Amazon fulfillment centers into vehicles for customer delivery.

>Manchester Capital Management purchased 1537 Air Rail Avenue from Lingerfelt Commonwealth Partners for $21,695,000, or $68 per square foot.  This 320,000 square-foot building is adjacent to the Norfolk International Airport and Interstate 64 within the Airport Industrial Park submarket and is fully leased to third-party logistics (3PL) company World Distribution Services.

>Brisk contract activity is occurring at Greenbrier North condominiums. This planned development of eight 12,000 SF office warehouse condominiums has greatly exceeded expectations with five contracts and five individual units coming out of the ground at one time. This brisk activity at $120/SF is indicative of the underlying demand strength in the market.

alt=""

Norfolk Industrial Market Ends 2020 with Record-Setting Occupancy

Download Report
Related Experts

Scott Adams

Executive Managing Director, Virginia & Raleigh

Norfolk - Main

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. 

Mr. Adams is also actively involved in serving the military veteran community as well as for real estate initiatives at the University of Virginia. 

View expert

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.

View expert

Chad Braden

Research Analyst

Norfolk - Main

View expert