If you’ve had your eye on the Richmond area commercial real estate market in the last 24 months, you may have noticed several company announcements about relocations, site purchases, and company downsizing and expansion plans. Yet the RVA commercial real estate (CRE) market remains stable, and the Henrico commercial submarket remains strong.
“The current state of the [Richmond] commercial market is very stable,” says Andrew Cook, Director of Research, CBRE|Richmond. “There has been significant diversification since the recession, and the influx of new companies is poised to usher in continued growth. Henrico’s commercial real estate position remains one of the strongest in the market, with minimal vacancy and strong demand, and rental rates have climbed across both the office and industrial sectors.”
RVA is a “low cost” alternative to other U.S. national markets. “With a Q4 2016 suburban asking rent at $18.29 per square foot, Richmond’s suburbs rank 49th out of 58 U.S. suburban markets,” says Cook, referring to CBRE|Richmond’s most recent report. The CBRE|Richmond inventory figures for Henrico County (Northwest Quadrant) totaled 14,486,977 square feet during Q4 2016; of that amount, 1,617,406 square feet (or 11.2 percent) was available for occupancy.
Innsbrook Turns Mixed-Used
Henrico County offers a wide range of commercial properties, including small office complexes, large industrial parks and distinct office parks like Innsbrook Corporate Center. Innsbrook is currently witnessing a resurgence under the Innsbrook Redevelopment Overlay District plan, which was approved by the Henrico County Board of Supervisors in 2010.
The district covers approximately 1,050 acres, and the plan will change the current office park into a dynamic urban mixed-use (UMU) community. In June 2016, the district plan was amended, allowing for mixed-used development to occur for projects with a minimum of four acres (versus 20 acres previously). Plans are in the works for one investor to add 350 apartments and a structured parking deck around an existing office building at 4235 Innslake Drive, reports Richmond BizSense.
“It’s a goal we’ve been working toward – trying to introduce residential uses to support the office uses in Innsbrook and make use of the open space in Innsbrook,” said Henrico Planning Director Joe Emerson in the BizSense article. “Making these allowances and seeing this development move forward confirms our belief that it is viable to turn it into a mixed-use community.”
“Innsbrook has a unique opportunity to meet current trends we are seeing across the globe as a growing number of people gravitate toward urban hubs,” says Andrew Cook. “With the redevelopment of Innsbrook, the complex will be poised to remain Richmond’s top office park well into the future. The success of the undertaking will likely hinge on the overall execution of the redevelopment, the ability for the park association to meet the changes, and the ability for the infrastructure to handle the changing traffic patterns.”
Innsbrook is not the only area experiencing revitalization. There has also been a resurgence in the Parham Road corridor and a healthy amount of mixed-used development activity at GreenGate, a new community located in Short Pump; Reynolds Crossing, near Glenside Drive and I-64; and Eastgate Town Center in Eastern Henrico.
With office space development, jobs AND investments on the increase, the overall state of Henrico County remains strong.
About CBRE | Richmond
CBRE|Richmond serves the central Virginia region and provides a wide range of services, including investment management and consultation, to real estate owners, investors and occupiers. The company publishes a Commercial Real Estate “MarketView” report for the Richmond area each quarter.