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News release

HAMPTON ROADS, VA

Investors Flocking to Hampton Roads for Greater Yields


HAMPTON ROADS, Va., Jan. 5, 2016 – Investment sales activity in Hampton Roads reached a record-level $316 million in 2015, according to JLL’s Q4 market report. Given that interest rates were near zero and there was significant cap rate compression in core markets, investors seeking opportunities in secondary and tertiary markets turned to Hampton Roads.

With cap rates ranging from 7.0 to 8.0 percent for Class A assets with minimal or no vacancy rates, Hampton Roads became an attractive option over primary and secondary markets, where cap rate averages ranged from 3.7 percent (San Francisco, CA) to 6.6 percent (Charlotte, NC).

Core buildings in Hampton Roads such as the fully leased Concourse Building and the 95-percent leased Fulton Bank Building sold in 2015 at cap rates around 7.0 percent. Portfolio sales in the region, with vacancy at or above 10.0 percent, traded at higher cap rates around 10.0 percent +/-
The JLL report also found that demand for new Class A space was down in 2015. This is a result of three trends: there is a 33-percent premium for new construction Class A over existing Class A; increased popularity of teleworking in Hampton Roads; and the number of downsizings that occurred during the recession.

“One trend we are seeing is a growing demand for call centers—particularly those with generous parking ratios,” said Deborah Stearns, Senior Vice President, JLL. “Hampton Roads experienced significant interest in call and operation center requirements before the Do Not Call Registry was enacted. It is exciting to see this category of opportunity return, offering employment and positively impacting occupancy with quality jobs.”

JLL Hampton Roads Market Insight Report: http://www.jll.com/bip/ms/DC/Marketscape/December2015/OfficeInsight_Q4-2015_HamptonRoads.pdf

JLL Richmond Market Stats: http://www.jll.com/bip/ms/DC/Marketscape/December2015/OfficeStatistics_Q4-2015_HamptonRoads.pdf

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. A Fortune 500 company with annual fee revenue of $4.7 billion and gross revenue of $5.4 billion, JLL has more than 230 corporate offices, operates in 80 countries and has a global workforce of approximately 58,000.  On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 3.4 billion square feet, or 316 million square meters, and completed $118 billion in sales, acquisitions and finance transactions in 2014. Its investment management business, LaSalle Investment Management, has $57.2 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.