Grocery stores dominate commercial real estate retail activity in Richmond
Grocery stores continued to dominate the Richmond area’s commercial real estate retail sector last year, according to a quarterly report by the firm CBRE|Richmond.
The firm said grocery development accounted for 68 percent of four-quarter retail construction in the Richmond area and 70 percent of the quarter’s “deliveries” of new properties.
Competition in the area’s grocery market has heated up recently with the announcement of several new stores, including two upscale Wegmans supermarkets in western Henrico County and Chesterfield County.
“Overall retail activity was strong across the region with all primary markets posting positive net absorption in [the fourth quarter],” the report said.
Looking at the market for office space, CBRE reported robust tenant activity in fourth quarter, which left Richmond with just 11 blocks of available Class A suburban office space, over 25,000 square feet at the end of the year.
A decision by McKesson Medical Surgical to lease 168,000 square feet at Deep Run III in western Henrico for its headquarters “took one of the largest blocks of space off the market, driving Richmond’s suburban Class A availability down to 9.8 percent,” the report said.
With a total of 1.19 million square of net absorption last year, Richmond’s industrial market has now absorbed more than 1 million square feet for the second-consecutive year, CBRE said. However, leasing activity slowed in the fourth quarter, accounting for only 5 percent of this year’s total industrial net absorption.
Investment activity, on the other hand, accelerated as 2014 drew to a close, with $119 million in transactions in the fourth quarter, the report said.