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Q1 2022 Richmond Office Market Report

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Fundamentals slip as short-term deals gain popularity

Vacancy rates crept upwards and ended the quarter at 11.7% while average asking rents increased by just 23 basis points quarter-over-quarter to $21.73 per-square-foot. All in all, fundamental statistics followed similar trends as established in previous quarters, with rental rates nearly stagnating among heightened vacancy rates. Absorption remained negative, ending the quarter at -83,964 square feet.

Key Takeaways
  • The City of Richmond established a city-wide technology zone and will offer tax incentives to encourage tech-based firms to settle downtown. The zone also allows regulatory flexibility through ordinance exemptions and special zoning.
  • Henrico County Public Schools leased 48,500 square feet and will open an adult education center at Regency Mall. The mall continued its shift to a mixed-use development and is expected to deliver 320 apartments later this year.
  • Q1 posted -83,964 square feet of net absorption, with Class B properties bearing the brunt of the move-outs. Independent Container Line was the largest negative contributor and moved out of 40,000 SF at 5620 Cox Rd. The logistics company moved into their own property at 4222 Cox Rd. Downtown Richmond suffered the most and contributed 44,383 square feet of negative net absorption.

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Q1 2022 Richmond Office Market Report

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