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Regional
Roundup
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- Buying vs. leasing
Virginia
Business
December 2003
HAMPTON
ROADS
Deborah
K. Stearns, CPM, SIOR
Managing Director
Advantis Real Estate Services Co.
The Commercial Market: The Sun Trust building in
the Newmarket development (Williamsburg) opened at 60
percent occupancy. Langley Federal Credit Union broke
ground on a new headquarters building in Newport News,
known as Fountain Plaza Three, which will have about
50,000 square feet of available space. Sun Trust moved
to 150 W. Main Building in Norfolk, and the Mitre Corporation
is leasing space in Hampton Technology Center.
The
Retail Market: Vacancy rates at mid-year hover around
12 percent, but are closer to 7 percent when excluding
big box stores. New store openings include California
Pizza Kitchen, P.F. Changs, Dick’s Sporting Goods
in Virginia Beach and Forever 21 and The Sharper Image
at MacArthur Center in Norfolk. Kohl’s entered
the market with stores in Chesapeake and Virginia Beach.
Bass Pro Outdoor World opened a 105,000-square-feet
store in Hampton.
There are three new Super Wal-Marts (two in York County
and one in Gloucester). Burlington Coat Factory is going
into two former Montgomery Ward stores, and Stein Mart
opened a store in Williamsburg. Lynnhaven Mall sold
to General Growth Properties for approximately $250
million. Other sales include Denbigh Village Center
(320,000 square feet) in Newport News for almost $21
million to Inland Retail Real Estate Trust, and Newmarket
South (450,000 square feet). Dillard’s announced
closings at Coliseum Mall and Pembroke Mall, but is
renovating and expanding its store at Greenbrier Mall.
The
Industrial Market: Growth in the Port of Virginia
remains a driver for this sector. Port growth is up
15 percent year to date over 2002, which was up 22 percent
over 2001. Vacancy is down to about 5 percent at mid-year,
and large blocks of space are hard to find on the Southside
of the region. Inventory includes the 420,000-square-foot
Gateway Computer facility in Hampton, the 135,000-square-foot
Federal Mogul building in Hampton and the 300,000-square-foot
John Deere facility in James City County. In other moves:
Newport News Inc. will close its 380,000-square-foot
operation; Wal-Mart expanded its distribution facility
at Greenmount to 2 million square feet; Cost Plus leased
125,000 square feet in Williamsburg; Haynes Furniture
purchased 50 acres on the Upper Peninsula for a 300,000-square-foot
distribution facility to open in 2004.
WESTERN VIRGINIA (ROANOKE AREA)
Ed
Hall
Chairman/President
Hall Associates Inc.
The
Commercial Market: Expansion by Atlantic Credit
and Finance in Roanoke will create 226 new jobs in the
next 24 to 36 months, with a total investment of $8.5
million in lease, renovations and equipment. Warehouse
Row, a renovation of old warehouses to be used for high-tech-type
businesses, welcomed its first tenants — Jones,
Glenn and Robinson, Xcellos and Rusty’s Best Corp.
The
Retail Market: Ethan Allen Furniture will close
its 20,000-square-foot store in Roanoke. Marshall’s
and Bed Bath and Beyond plan to occupy the former 35,000-square-foot
Phar-Mor site in the Town Square Shopping Center in
Roanoke. Kroger Food plans an expansion in Cave Spring
Shopping Center and the former Old Country Buffet at
Old Country Plaza is being vacated and will be leased
by Buffalo Wild Wings Grill & Bar. The River Ridge
Mall in Lynchburg was reported sold along with three
other fashion malls for a total price tag of $340 million.
The
Industrial Market: Cardinal Glass is building a
$24 million facility in the Roanoke County/Vinton Business
Center. The plant will eventually employ approximately
200 people. Cardinal is a major supplier to Integrity
Windows (a product line of Marvin Windows and Doors),
which is also building a manufacturing plant in Roanoke
County at Valley Gateway Park. Maple Leaf Bakery is
planning a $12.3 million expansion to add nearly 44,000
square feet in new production line. When complete, the
Maple Leaf Bakery will be more than 200,000 square feet.
Somic Ishikawa, a Japanese manufacturer of ball joints,
steering and suspension systems, announced a $31 million,
150,000-square-foot expansion that will create 102 new
jobs. The expansion will benefit from a $150,000 grant
from the Governor’s Opportunity Fund and a $250,000
grant from the Virginia Tobacco Indemnification and
Community Revitalization Commission.
The
Health Care Market: Carilion Health System will
buy Norfolk Southern Computer Center in Roanoke for
approximately $5.9 million. It plans to move about 190
of its employees to the facility. Carilion also announced
a $105 million expansion of its hospital center as well
as other medical facilities in Roanoke. United Health
Group, a call center in Roanoke, is shifting 200 of
its 385 jobs to Pennsylvania and Minnesota. Atlantic
Mutual is restructuring its Roanoke office, cutting
65 jobs.
CENTRAL VIRGINIA
Scott
F. Durham
Senior Vice President
CB Richard Ellis
The
Commercial Market (Richmond Region): A healthy Richmond
office market would be gauged by positive absorption
of 300,000 — 400,000 square feet currently available,
resulting in a vacancy below 8 percent. We achieved
this from 1996-2000. Richmond’s skyline is getting
a facelift as construction began this summer on the
new Riverside on the James mixed-use office development.
The Greater Richmond Convention Center is open, and
the city has plans to clean up Broad Street at its entrance.
Philip Morris USA moved it national headquarters to
the Richmond region, giving the suburban office market
a major shot in the arm. SugarOak Properties LLC, an
investment, purchased two office buildings in the Boulders
Office Park for $30 million. This was the second purchase
in the park complementing a purchase made last year
for three buildings totaling $60 million. RDG, a development
company, purchased 19 buildings totaling 750,000 square
feet of Class B space in the Forest Office Park for
$35 million. This is an aggressive play on older buildings,
but the park is well established and in an excellent
location. Plans include retrofitting each building,
adding new landscaping and positioning some of the buildings
for sale to individual purchasers.
Jane
M. duFrane, CCIM
Director of Marketing & Leasing
Highwoods Properties Inc.
The
Commercial Market: The third quarter of 2003 brought
a slow resurgence from the tried and true small- to
medium-office users who define Richmond’s economy.
These small- to medium-size companies lease from 500
to 5,000 square feet and make up the bulk of customers
in the Innsbrook market. The Richmond market’s
greatest challenge is the availability of large blocks
of space (10,000 to 100,000 plus square feet). Users
for this amount of space have been absent for the past
24 months and have only recently started touring the
market and making occupancy plans for 2004 and 2005.
The abundance of commercial space and the lack of demand
will push off any new speculative development for the
next 18 months. Innsbrook Corporate Center’s vacancy
remains in good condition at a healthy 5 percent as
of October. By mid-year 2004, Innsbrook’s available
space inventory will be at a manageable level and would
be the most likely candidate for speculative office
development to be delivered in 2005.
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