Richmond office vacancy is 10 percent at end of first quarter

The Richmond office market ended the first quarter with a vacancy rate of 10 percent, up slightly from the previous quarter, according to a market report from Commonwealth Commercial Inc.

Rental rates among all classes ended the quarter at $17.53 per square foot, representing a 2.3 percent increase in rates from the end of the fourth quarter in 2014, the report said.

A total of three buildings delivered to the market, totaling 94,403 square feet, with 575,158 square feet still under construction. One of the notable deliveries was the MEDARVA Building I, a 66,000-square-foot medical office building in Goochland County. As for new construction, the largest project underway is Gateway Plaza, a 321,500-square-foot office building in downtown Richmond that is 76 percent preleased.

Net absorption for the overall market was positive at 28,370 square feet.

The report noted that nontraditional office spaces, including historic renovations and co-working facilities, are seeing high demand as employers seek locations that appeal to employees and offer flexible lease arrangements to smaller growing companies. 

Commercial Commercial, based in Henrico County, also noted hat total office building sale activity was down for all of 2014. The Richmond market saw 22 office sale transactions for the year with a total volume of $156.3 million, with a price per-square-foot average of $89.07.

In 2013, the market posted 15 transactions, with a total volume of $173.1 million, and an average-square-foot-price of $194.80.