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News release

RICHMOND, VA

Small Businesses, Start-Ups Trade Up for More Efficient Space in Richmond

Largest Office Using Segment in Richmond Market Also its Most Active


RICHMOND, Va., OCT. 27, 2014 - Small businesses and start-ups remain the most active tenants in the greater Richmond, Va. marketplace, where 76 percent of office space users occupy less than 10,000 square feet, according to research analysis from JLL.

"Smaller tenants are really the 'bread and butter' of the Richmond office market," said Scott P. Harrison, SIOR, Vice President in JLL’s Richmond office.

Harrison says that Richmond-area tenants are increasingly trading-up from their current class of space and finding better, more efficient space for the same, or sometimes even lower, rate per square foot.

"The enthusiasm over the stock market's success, particularly in the second and third quarter this year, gave a lot of local tenants the confidence to expand or relocate," Harrison adds.

Tenants who occupy between 2,500 and 10,000 square feet of space in Richmond account for 25 percent of the market's total occupied inventory. The reduction of their footprints in the market, typically ranging between 20 and 30 percent, has contributed to a negative net absorption of 115,223 square feet in the market year-to-date.

But some submarkets, particularly the West End and South Side, have few desirable options remaining.

"Space in the West End is filling up, but there's still no speculative development in the pipeline," said Harrison. "It will be interesting to see how the appetite for speculative development increases as product fills up over the next couple quarters."

While small tenants account for the bulk of activity in the market, mid-sized firms remain the largest space users, according to JLL. Nearly 30 percent of Richmond’s office market is occupied by tenants ranging from 10,000 to 25,000 square feet. Large tenants occupying between 75,000 and 250,000 square feet account for 24 percent of the market's inventory.

Large users of more than 250,000 square feet of space account for only 5 percent of Richmond's occupied office inventory.

About JLL
JLL (NYSE: JLL) is a professional services and investment management firm offering specialized real estate services to clients seeking increased value by owning, occupying and investing in real estate. With annual fee revenue of $4.0 billion and gross revenue of $4.5 billion, JLL has more than 200 corporate offices, operates in 75 countries and has a global workforce of approximately 53,000.  On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 3.0 billion square feet, or 280.0 million square meters, and completed $99.0 billion in sales, acquisitions and finance transactions in 2013. Its investment management business, LaSalle Investment Management, has $50.0 billion of real estate assets under management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit www.jll.com.