Please ensure Javascript is enabled for purposes of website accessibility

Real Estate and Construction: Stagnant with some silver linings

Realtors slogged through another sluggish market in 2024.

Pollyanna types will point out that the commonwealth did see 4,000 more home sales in 2024 than in the previous year, according to Realtors data. On the other hand, the 102,509 homes that sold in Virginia in 2024 were down 18.8% from 2019 sales.

Mortgage rates remained historically high in 2024, averaging around 6.7%. That led to fewer homeowners putting their homes on the market, pushing up home prices.

But back to the bright side: Realtors did enjoy an uptick in activity in December 2024, when Virginia had 7,907 home sales, a 14% increase over December 2023.

“The surge we observed at the end of 2024 indicates buyers are coming to terms with mortgage rate levels which, while still elevated, are lower than a year ago,” Virginia Realtors President Lorraine Arora said in a January statement.

Last year also saw a landmark $418 million settlement by the National Association of Realtors over allegations that its members colluded to raise commissions, violating antitrust laws.

In August 2024, NAR policy changed, requiring agents who use a Multiple Listing Service (MLS) to enter into written agreements with buyers before touring a home and includes “a specific and conspicuous disclosure of the amount or rate of compensation the real estate agent will receive or how this amount will be determined.”

Many predict the new policy could give buyers more power to negotiate commissions, which could impact Realtors’ bottom lines.

Virginia’s industry also faced challenges in 2024, but the year did offer bright spots.

The office segment continues to limp along, failing to recover from the pandemic, when more workers started working remotely. Nationally, the market has lost 23.3% ($740 billion) of its aggregate value since 2019, according to the Brookings Institution, a nonpartisan research organization.

Virginia’s office vacancy rates were at 13% for the fourth quarter of 2024, a smidge higher than the previous year, according to data from Virginia Realtors.

About 17.8% of the available office space in Northern Virginia was vacant in that last quarter. Richmond’s vacancy rate was 8.6%, while Hampton Roads was 7%. Vacancy rates in Harrisonburg, Roanoke and Lynchburg hovered around 4%.

Demand for retail space, on the other hand, remains high in Virginia. Statewide, the retail vacancy rate was 3.7% in the final quarter of 2024, according to Virginia Realtors.

Construction employment increased 6% in Virginia from November 2023 to November 2024, according to an analysis of government data by the Associated General Contractors of America. Nationally, Northern Virginia added the second most construction jobs (9,000) over that period, trailing behind the Houston region, which saw 16,100.

Hampton Roads saw one of its biggest commercial real estate projects celebrate a milestone in 2024. In September, the Rockefeller Group, a New York real estate developer, and Matan Cos., a Maryland real estate investment firm, broke ground on the first phase of Port 460 Logistics Center, a massive industrial campus that will offer direct access to the Port of Virginia’s terminals. It has been estimated to cost around $420 million.

The same month, workers broke ground in Richmond at the site of the future home of the Richmond Flying Squirrels, a $117 million-plus baseball stadium dubbed CarMax Park. The 67-acre, $2.44 billion Diamond District project is also expected to include two hotels, 2,800 residential units, 935,000 square feet of office space and 195,000 square feet of retail and community space.

A highlight of Northern Virginia’s year in commercial real estate came in February 2024, when the CoStar Group, a global real estate data and analytics company best known for its Apartments.com and Homes.com brands, announced plans to relocate its headquarters to Arlington County from Washington, D.C. The company purchased the Central Place Tower at 1201 Wilson Blvd. for a reported $339 million, with plans to invest $20 million in the move.

“CoStar Group’s strategic move to Arlington reinforces our attractiveness as a hub for innovative global businesses,” Libby Garvey, former chair of the Arlington County Board, said in a statement.

Related charts:

General contractors in Virginia

Virginia architectural and engineering firms

Virginia commercial real estate firms

Education: Va. colleges increase in-demand programs

Virginia’s higher education institutions grew their degree programs and, in some cases, grew physically in the last year as they sought to train students for in-demand and growing fields.

In response to an increasing demand for skilled tech workers, ‘s universities have expanded their STEM capacities, manifesting in several cases as new buildings. The University of Virginia opened the first academic building dedicated to its School of Data Science in April 2024, five years after the school started. The new four-story, 61,000-square-foot building includes an atrium, four adaptable classrooms and a two-story hub and event area.

To the north, George Mason University’s $254 million Fuse tech hub in Arlington County opened to the public and industry partners in December 2024. Undergraduate and graduate-level classes at the 345,000- square-foot building are expected to begin in fall 2025.

The first academic building of Virginia Tech’s $1 billion Innovation Campus opened in January, welcoming graduate students to the Alexandria campus. Since fall 2020, Innovation Campus students had attended classes at the school’s Northern Virginia Center in Falls Church. The $302 million Academic Building One has 300,000 square feet.

Yet to come is Norfolk State University’s $118 million science building that will replace one of the school’s oldest buildings and support new master’s degree programs, including in cybersecurity. The four-story, 131,000-square-foot facility is expected to open in fall 2027.

Although not tied to a new building opening, Virginia Commonwealth University added six undergraduate minors in the 2024-25 academic year: artificial intelligence, aerospace engineering, nuclear engineering, software engineering, cybersecurity and data science.

Also expanding its cybersecurity offerings, George Mason received a nearly $200,000 grant from the U.S. Commerce Department’s National Institute of Standards and Technology, announced in April 2024, for a two-year program to improve cybersecurity workforce development. The school has more than 20 degree programs that include a cybersecurity focus.

New schools and programs dedicated to public health, health care and related fields also were on the rise in Virginia. On July 1, 2024, about two years after the planned merger became public, Eastern Virginia Medical School officially merged into Old Dominion University, becoming
part of Macon & Joan Brock Virginia Health Sciences at Old Dominion University.

Plans for another health-related school progressed as well. In fall 2024, the State Council of Higher Education for Virginia approved the Joint School of Public Health, a collaboration between ODU and Norfolk State University that is also part of Macon & Joan Brock Virginia Health Sciences at ODU. NSU is the second historically Black college and university in the U.S. to be part of a school of public health.

The school, offering bachelor’s and master’s degrees and one doctorate program, is seeking Council on Education for Public Health accreditation.

In a similar vein, VCU launched a bachelor’s degree in pharmaceutical sciences program last year, becoming the state’s first public university to offer the degree. It prepares students for pharma jobs like quality assurance technicians, research technologists and laboratory technicians.

Universities in Hampton Roads further focused on training and education for maritime professions last year. In fall 2024, ODU launched its School of Supply Chain, Logistics and Maritime Operations, an upgrade from an earlier program offered through its Strome College of Business.

William & Mary, meanwhile, expanded its marine research. The Williamsburg school announced in July 2024 that Jane Batten pledged $100 million — the largest gift William & Mary has received — to boost its coastal and marine science research toward finding global solutions for flooding and sea-level rise. The newly named Batten School of Coastal & Marine Sciences will expand the Virginia Institute of Marine Science.

In February, William & Mary announced a $50 million donation from alumnus Dr. R. Todd Stravitz to create a full tuition scholarship fund for the university’s Batten School and VIMS. First scholarships will be awarded for the fall semester.

Northern Va. Big Deal: Digital Gateway lawsuits head to appeals court

When the massive Prince William Digital Gateway data center project was approved by county supervisors in December 2023, the project was hailed by some as an economic boon that could support 30,000 new construction jobs and infuse more than $500 million in annual tax revenue in the next two decades.

Others saw the project as a looming catastrophe, an economic boondoggle that would fail to deliver on its promises while leaving a blight on the western edge of the county, where the 2,100-acre project was approved along Pageland Lane bordering the historic Manassas National Battlefield Park.

Foes of the project promised to fight, and they have.

Billed as the world’s largest data center corridor and a rival to Loudoun County’s Data Center Alley, the Digital Gateway remains tied up in legal wrangling, and its future appears unclear.

The Digital Gateway would add as many as 23 million square feet of data centers to the county and is considered the world’s largest data center project. As of June 2024, Prince William had 9.17 million square feet of data centers in operation and about 3 million square feet under construction, and the county brought in $166 million in tax revenue in fiscal 2024, a 50% increase over fiscal 2023. By comparison, Loudoun has about 43 million square feet of data centers in operation or under construction, and that county is projected to bring in $1 billion in tax revenue in fiscal 2025.

Overland Park, Kansas-based QTS, one of the Digital Gateway’s two developers, declined to talk about its timeline for construction. Dallas-based Compass Datacenters, the project’s other developer, did not respond to an email.

The Northern Electric Cooperative, or NOVEC, also declined to discuss specific details about the work it must complete on behalf of the project, saying only that it is working with the developers to finalize all its substation locations, which will determine transmission line requirements. Dominion Energy, which will engineer and construct those lines, deferred questions about those needs to NOVEC.

The county board’s approval to rezone land for the project took place during a lame-duck session after the November 2023 elections. Its then-chair, Ann Wheeler, was voted out over her support for the project, and more than 200 people spoke during a marathon meeting that went past midnight. After the vote, a couple of dozen landowners and the American Battlefield Trust went to court, filing multiple suits against the county. One suit claimed the board failed to adequately notify the public about the hearing, and a second challenged the adoption of a comprehensive plan amendment that paved the way for the project.

Last fall, county circuit court judges dismissed the lawsuits, but plaintiffs are turning to the Virginia Court of Appeals, which they hope will block the development. A decision by the court in each case is pending.

Chap Petersen, a former state Democratic senator and an attorney representing plaintiffs in the American Battlefield Trust lawsuit, points out several flaws with the county supervisors’ vote to approve the project, including a recommendation by Prince William planning staff that the body deny the Digital Gateway because the developers’ application lacked critical information.

For now, the project appears stalled while legal wheels turn. That includes the sale of land to developers, angering some homeowners who had planned to sell, Petersen says. QTS previously told Virginia Business that about 100 homeowners joined together to sell their land for the Digital Gateway.

“The issue is that the rezoning is not final until they get all the way through the appeals process,” Petersen says. “So, they [developers] don’t want to buy the land because it may turn out to be worth a lot less than what they expected.”

Trevor Johnson, Prince William’s deputy director for economic development and tourism, says the county is focusing on attracting industries including life sciences and technology, and is not actively courting data centers. He would not speculate on the economic impact should legal battles lead to the Digital Gateway’s dissolution, and was not aware of any construction timelines.

“All along, it was a 15- [or] 20-year project, and so I wouldn’t even know if it’s considered a delay or not, or if this is kind of the timeline,” Johnson says.

Shenandoah Valley Big Deal: Dairy producer again expands in Frederick County

Dairy company HP Hood has nearly completed the $83.5 million expansion and upgrade of its Frederick County plant, which will allow it to increase production and meet future customer demand.

A new machine to fill and seal milk containers was installed and went into production in December 2024, and a new warehouse and processing room will be in service during the first quarter of 2025. The plant will encompass 442,000 square feet when the expansion is complete, says Lynne Bohan, Hood’s group vice president of communications and government affairs.

“Our growth and investment in Frederick County will enable Hood to continue to provide a market for local dairy farms through our milk cooperative partnerships,” she says. “As we continue to invest in our Winchester facility, it will enable Hood to create new jobs and new products in the future.”

The plant, located just south of Winchester, processes 150 million gallons a year of extended-shelf-life fluid milk and nondairy products. They’re used for Hood’s own brands, private label partners, licensed brands and co-packing partners. These include Lactaid, Blue Diamond Almond Breeze Almond Milk and Planet Oat.

A nationally branded dairy processor headquartered in Lynnfield, Massachusetts, HP Hood has 12 manufacturing plants across the United States and annual sales revenues of approximately $3.5 billion. Customers include chain and independent retailers, convenience stores, and food service channels across the country, according to a news release from the governor’s office.

The company built its Frederick County plant in 2000 on 878 acres at 160 Hood Way. The site provides access to both U.S. Route 11 and Interstate 81, as well as a milk cooperative network that includes the Dairy Farmers of America and the Maryland & Milk Producers Cooperative Association. It supplies finished products to customers in New England as well as the Southeast, Mideast and Midwest, says Bohan.

“When we chose this location way back before 2000, we thought it served us, from a distribution standpoint and an ingredient standpoint, an employment standpoint, and we were supported by the local department of economic development. They’ve been terrific partners with us all along,” she says.

Attracting the plant was an important deal, not only for Frederick County, but also the Shenandoah Valley region, says Patrick Barker, executive director of the Frederick County Economic Development Authority. Hood is now one of the county’s major manufacturers and employs more than 600 people.

The dairy processor previously expanded operations at the facility in 2013, investing $84.6 million to increase ultra-high temperature production capacity.

“They’ve done multiple expansions since they located there, and we appreciate every one of them,” Barker says. “This one, which is close to $84 million, is a further confirmation of the county being a place where business wants to locate and business happens.”

The Virginia Department of Agriculture and Consumer Services worked with Frederick County and the county’s EDA to secure this most recent upgrade and expansion project for Virginia. Youngkin approved a $50,000 Infrastructure Grant from the Governor’s Agriculture and Forestry Industries Development Fund, which Frederick County is matching with local funds.

According to Lindsay Reames, executive vice president of sustainability and external relations at the Maryland & Virginia Milk Producers Cooperative Association and the 2024 chair of the Virginia Agribusiness Council, the expansion and upgrade “will definitely allow us to continue to supply them and shows a strong signal to us that they are investing in their business and we’re going to have a home for our milk in the future.”

HP Hood’s continued investment in its Winchester facility will enable it to create jobs and add additional capacity in response to growing customer demand, according to the company, although no new positions have been added yet. Nevertheless, Hood is always hiring and has worked with area colleges and held job fairs to recruit people from the Shenandoah Valley. Sourcing employees from the region is important to the company, Bohan says.

The Frederick County plant and its employees also give to their communities by supporting the Winchester Rescue Mission, SPCA, local Lions Club and Toys for Tots, in addition to donating turkeys to The Laurel Center, an organization assisting those affected by domestic and sexual violence.

“We like to consider ourselves a good neighbor and community supporter,” says Bohan.