Vacancy remains low in Richmond’s 69,381-unit apartment market. The second quarter rate of 5.0%, is down 40 basis points from the prior quarter, and down 80 over 12 months. A rate near 5.0% puts the market in an area generally considered close to full occupancy. August data show a slight increase to 5.1%. Class A vacancy finished the second quarter at 4.9%, down 40 basis points from the first quarter, while Class B/C vacancy was 5.0%, down 50 basis points over three months. Net absorption had an active quarter, at 311 units. From 2002 to 2011, net absorption trailed new construction totaling 6,834 units to 9,036 added. However, demand has been meeting or surpassing new supply the past few years, allowing vacancy to fall. Reis forecasts vacancy to finish 2012 at 4.5%, and remain near the rate to 2015. Thus far in 2012, within Reis submarkets, Phase III of the Atrium Lofts at Cold Storage, in the Airport submarket, with 130 units, and 909 Perry Street, with 44 units in the Southside/Westover Hills submarket, both finished in August. For projects under construction with completion dates, the Hopper Paper lofts apartment project still leads with 138 units, in the Southside/Broadrock submarket.
Average asking and effective rents finished second quarter 2012 at $815 and $775 per month, up 1.0% and 1.2%, respectively, over the quarter, and up 2.5% and 3.1% over 12 months. August data show 0.2% and 0.1% increases, asking and effective. Class A asking rents were $948 per month and Class B/C rents were $710 per month, up 1.0% and 1.1%, respectively, over the quarter. Overall rents are on track to post increases of 3.0% asking and 4.0% effective, according to Reis, so it can be safely said that Richmond’s multifamily rents are performing well.
“The vacancy rate for the Richmond apartment market improved by nearly one percentage point over the past six months and is now 6.2%,” stated Carolinas Real Data in their August 2012 report. “Same-store rents increased over the past six months bringing the current average monthly rent to $880.”