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Market overview
Virginia Business
March
2005
Focus:
Richmond
Richmond’s commercial real estate market fared
well in 2004. Overall, office vacancy rates fell from
more than 16 percent to the 14 percent range, and the
area saw nice gains in absorption (the change in the
amount of occupied space over a period of time). In
the suburban office market, vacancies also fell as the
result of major lease transactions, including Saxon
Mortgage, which is leasing 110,000 square feet in a
build-to-suit project in Innsbrook. Capital One Financial
Corp. continues to be a driver in Richmond’s suburban
market with the sale of Capital One’s facilities
on West Broad Street to a new player in Richmond real
estate: RER/New Boston. It bought the buildings for
more than $15 million in a sale-leaseback deal, with
Capital One leasing the space until this fall, when
it will vacate the buildings. Development activity remains
stagnant in Richmond with the exception of office market
condos, with about 575,000 square feet of this product
either under construction or in the pipeline. The only
major noncondo project during 2004 was Riverside on
the James, a multiuse project going up on the city’s
downtown waterfront. As firms such as Troutman Saunders
vacate older downtown buildings for new digs at Riverside
on the James, vacancy rates for the city’s older
Class B office buildings are going up. Meanwhile, Richmond
continues to revitalize Broad Street near the old Sixth
Street Marketplace with the city tearing down buildings
to make way for a new hotel, federal courts building
and performing arts center.
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