"The market is evolving rapidly. Demand continues to grow, the market is site-constrained. Steel prices and availability is a growing concern." - Matt Anderson, SIOR | Executive Vice President
Richmond's industrial market has strong fundamentals bolstered by high tenant demand.
- Following a record year in 2020 with nearly 1.8 million square feet of new supply delivered to the market and over 10 million in the pipeline, Richmond’s inventory still remains exceptionally tight with vacancy rates lingering below 3% nearly every quarter since 2019. There appears a trend to accommodate large space requirements for users, and developers are delivering to this demand.
- Richmond’s industrial market closed with average asking rents of $5.43 per square foot, a 6.3% increase quarter-over-quarter. Net absorption creeped negative for the first time in two years with Q1 closing with 16,784 square feet of negative absorption. However, 12-month net absorption hovers above 1 million square feet. Additionally, vacancy rates increased 1 basis point quarter-over-quarter to 2.90% and Highbay (24+) designated properties recorded a rate of 2.14%, down 4 basis points (bps) quarter-over-quarter, and down 72 bps year-over-year.