The requested news item does not exist. Please return to News
Lack of development sustains vacancy, but low leasing momentum maintains tenant-favorable conditions in Trophy and Class A Hampton Roads markets
HAMPTON ROADS, VA, June 27, 2016 – The Trophy and Class A office towers in the downtown Norfolk and Virginia Beach CBDs have been included for the first time in JLL’s 2016 Skyline report. The report, which focuses on the top end of the office leasing market in major cities nationwide, shows that the Hampton Roads market, which bucks the national trend by recovering from the bottom up instead of vice-versa, is improving with a steady stream of absorption. Direct vacancy in the Skyline market is down to 10.3 percent in 2016 as compared to 12.1 percent in 2015.
Skyline assets in Hampton Roads have been built or significantly renovated after 1988 and offer superior location and higher-quality finishes compared to other buildings in the area. Major attractions for these buildings include the ability to walk to amenities such as restaurants, shops, hotels and entertainment venues and, in downtown Norfolk, access to Hampton Roads' light rail system, The Tide.
“Our office recovery started in the suburbs, but is now filtering up to our urban core where you are seeing companies such as ADP relocate 1,800 people to downtown Norfolk, reenergizing the downtown economy,” said Deborah Stearns, Senior Vice President, JLL.
Hampton Roads has not experienced the same growth in demand for high-profile urban office space that has characterized primary markets over the past few years. This is due both to broad market trends, such as the downsizing of tenants as telecommuting increases and storage requirements decline, and to forces specific to the regional economy. Slow growth in regional GDP is directly related to reduced defense spending levels.
While the region's two CBDs are increasingly popular with millennials as the conversion of many older office buildings to multifamily continues in downtown Norfolk and development of new multifamily options continue in Virginia Beach Town Center, most office absorption during the recovery has been in value-priced low-A to high-B suburban space.
“The inclusion of Hampton Roads in JLL’s Skyline report is a recognition of the quality and maturity of this market and a major signal to site selection specialists that this market has arrived,” added Stearns. “The number of multifamily units in downtown Norfolk is close to 5,000, with the conversion of old class B and C buildings to apartments. This is creating a sustainable live, work play environment, and offers the kind of quality of life major corporations are seeking for their employees but at a greatly reduced cost.”
The Hampton Roads Skyline market is currently tenant-favorable, but it is not expected to last long. “There is no new Skyline-grade inventory planned, and while we are currently in a tenant-favorable market, the general trend of market indicators is leaning to landlords over the next 24 months,” added Gregg Christoffersen, Vice President, JLL.
About the Skyline Review
Investors and tenants alike can access JLL’s Skyline via a digital platform. The fully interactive website will feature JLL’s proprietary market insights regarding office supply, demand, rents, leverage and investment into 52 markets across the United States and Canada, with the ability to compare and contrast individual markets or multiples of markets as well as individual properties or portfolios. In addition, the site will offer videos and infographics. All information will also be available via mobile access.
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 $5.2 billion and gross revenue of $6.0 billion, JLL has more than 280 corporate offices, operates in more than 80 countries and has a global workforce of more than 60,000. On behalf of its clients, the firm provides management and real estate outsourcing services for a property portfolio of 4.0 billion square feet, or 372 million square meters, and completed $138 billion in sales, acquisitions and finance transactions in 2015. Its investment management business, LaSalle Investment Management, has $58.3 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.
+1 214 438 6437
+1 301 602 8709