Sperry Van Ness International Corporation’s (SVNIC) 2014 Top Markets to Watch Reports assess the current state of the national commercial real estate market, and identify micro-trends within specific geographic regions and industries for 2014. Today we are delving into the 2014 Top Office Markets to Watch. Not the largest, or the most actively contested markets, the 2014 Office Markets to Watch are each at an important juncture that presents unique opportunities for investment. Together, they reflect the diversity of trends that is driving the economy and commercial real estate performance in markets across the country.
TOP OFFICE MARKET TO WATCH : Richmond, Virginia
Hiring that pushed Richmond’s jobless rate to a post-recession low of 5.2 percent in December 2013 also fueled brisk absorption of office space during the second half of 2013. The citywide office vacancy rate, which peaked at more than 24 percent in 2008, has returned to single-digit territory after years of methodical recovery in the market. Even in the central business district, where vacancies increased slightly in the early quarters of 2013, the supply of available offices tightened in the second half of the year. Rents have been flat for Class B office space, but average Class A rents have climbed above $20 per square foot and will likely go higher by the end of 2014. Office buildings downtown and in Northwest Richmond are outperforming the overall market, largely at the expense of landlords in the southwest, who have been losing tenants. Nearly a half million square feet of new space under construction, mostly in the CBD, will do little to undermine the current trajectory. Value-add investors are more likely to find bargain pricing in the southwest.
To read more on Richmond, and other top office markets, download the full version of the Top Office Markets to Watch report below.
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