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Few large blocks of contiguous space remain
RICHMOND, VA, March 17, 2011 – Since the first quarter of 2010, Richmond’s largest suburban retail and office hubs have experienced increased leasing activity and tightening market conditions, according to a new market report from Jones Lang LaSalle. New, renewing or expanding tenants recently leased nearly 420,000 square-feet of large blocks of office space within the Innsbrook and Short Pump submarkets. The vacancy rate in these submarkets is down from 26 percent in the first quarter of 2010, to 19.2 percent. However, while there are numerous options available for 5,000 to 20,000 square foot office users, only a few options remain for tenants seeking large blocks of office space.
“Large office tenants are strategically positioning themselves and to take advantage of the market before landlords regain control,” noted Jimmy Appich, Jones Lang LaSalle. “As a result, large blocks of office space in the Innsbrook and Short Pump submarkets are filling up and it is only a matter of time until the last few remaining large blocks of contiguous office space are taken.” Larger than Richmond’s downtown Central Business District, the successful Innsbrook and Short Pump submarkets offer profitable retail, a vibrant and concentrated office market, strong residential neighborhoods and access to the area’s major thoroughfares. In the last year, major corporations including Snag-a-Job, Capital One, Elephant Insurance, Ironworks, General Cigar and SunTrust have moved into landmark buildings in this area.
The Facts on the Office Market:
• 36.9 percent of all Suburban Richmond leasing activity during 2010 took place in these submarkets.
• Vacancy in the Innsbrook and Short Pump submarkets has decreased by 6.8 percent in less than a year – primarily as a result of large blocks of office space being absorbed.
• While there are ample choices for smaller tenants, the Class A buildings that can accommodate larger users are extremely limited.
• There are only five Class A contiguous blocks over 50,000 square feet in the entire Richmond market.
• There are only three Class A contiguous blocks over 100,000 square feet in the entire Richmond market – all located in the Innsbrook area.
• There are only two Class A contiguous blocks over 150,000 square feet in the entire Richmond market – both located in the Innsbrook area.
• There are six large block office tenants currently in the market for over 700,000 square feet – a demand that exceeds the existing supply of large blocks of office space.
“We expect that WestMark Two, a property providing immediate access to I-64 and West Broad Street, will be the next large block of office space to be leased. This coveted location is within a 15-minute drive to every major thoroughfare and retail venue in Richmond and is visible to over 100,000 vehicles per day passing by at the I-64/West Broad Street interchange,” added Appich.
WestMark Two is one of only three large blocks of Class A office space available in the entire Richmond market that would be appropriate for a major corporation to be located under one roof.
About Jones Lang LaSalle
Jones Lang LaSalle (NYSE:JLL) is a financial and professional services firm specializing in real estate. The firm offers integrated services delivered by expert teams worldwide to clients seeking increased value by owning, occupying or investing in real estate. With 2010 global revenue of more than $2.9 billion, Jones Lang LaSalle serves clients in 60 countries from more than 1,000 locations worldwide, including 185 corporate offices. The firm is an industry leader in property and corporate facility management services, with a portfolio of approximately 1.8 billion square feet worldwide. LaSalle Investment Management, the company’s investment management business, is one of the world’s largest and most diverse in real estate with more than $41 billion of assets under management. For further information, please visit our website, www.joneslanglasalle.com.
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