Q2 2012 Richmond, Virginia Retail Market Trends

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Q2 2012 Richmond, Virginia Retail Market Trends

Richmond’s 14-million-square-foot community-neighborhood shopping center market saw a slight vacancy decrease in the second quarter. Reis data show the vacancy rate at 9.8%, down from 10.1% one quarter earlier and unchanged over 12 months. August data show no change. For power centers, the vacancy rate was 4.7%, up 80 basis points from 12 months earlier. Vacancy here has been close to 10.0% since 2009. Little new space was added in 2011, and no community-neighborhood space has completed thus far in 2012. The second quarter of 2012 saw 38,000 square feet of positive net absorption, but the year-to-date total is only 10,000. Looking forward, Reis expects vacancy to remain close to 10.0% through 2016. Hancock Village, a 350,000-square-foot lifestyle center, completed in March 2012, according to Reis’ latest construction data. The Corner at Short Pump remains listed under construction but is almost full. The only project currently under construction with a 2013 completion date is Stonebridge, a 300,000-square-foot community center on the Midlothian Turnpike in the Southwest Submarket.

Reis reports average power center asking rents at $20.70 psf, up 0.7% over 12 months. Second quarter average asking and effective rents for community-neighborhood center space were $15.99 psf and $13.72 psf, both up 0.3% for the quarter, but down 0.3% and 0.1% over 12 months. August data show a 0.1% increase in asking rents and effective rents. Reis forecasts asking and effective rent losses of 0.5% and 0.4%, respectively, in 2012. No substantial gains—in which both measures gain by more than 2.0%—are forecast for this market through 2016.

Cushman & Wakefield reports a second quarter retail vacancy rate of 6.9%, and an asking rent of $13.03 psf. “Brokers are reporting that several older mall locations are being marketed for redevelopment while other projects that had been on the back burner are finally getting traction,” this source reports.