Roanoke sees a 5 percent drop in office occupancy in 2015
Poe & Cronk Real Estate Group reports a 5 percent reduction in overall Roanoke office occupancy rates in 2015. The rate for occupancy last year stood at 81 percent, according to the firm’s annual office market survey
This was the firm’s 29th annual report. To compare 2015 to other years, Poe & Cronk noted that over the preceding decade, overall occupancy in the Roanoke market averaged 87 percent.
“Occupancy rates in the Roanoke Valley have remained strong for many years largely due to the limited supply of new construction and the conversion of older office buildings into residential apartments,” Dennis Cronk, president and CEO of Poe & Cronk, said in a statement. “The limited supply of new product created a challenge for tenants to match their needs with the existing market. For this reason, we welcome the higher quality of available office space.”
In 2015, relocation announcements by Allstate Insurance and Norfolk Southern Corp. increased the net available office space by nearly 275,000 square feet. Allstate relocated its employees to a new 75,000-square-foot office building in northern Roanoke County and an existing 48,000-square-foot Stone Printing Building adjacent to the Hotel Roanoke in the city’s Central Business District (CBD). The company had been located on Electric Road in Southwest Roanoke.
Meanwhile, Norfolk Southern put its 11 story, 203,632-square-foot regional headquarters office tower in downtown Roanoke on the market
following its decision to move 426 jobs from Roanoke to Norfolk or Atlanta. The vacant building is listed for sale for $25 million on Loop Net, a site for commercial real estate listings.
The Poe and Cronk report says that the Norfolk Southern and Allstate office buildings in the city’s downtown represent about 7 percent of the total Roanoke office market. While downtown is seeing in-migration and out-migration, other office areas are seeing growth.
The newly occupied Allstate building in Roanoke County, along with new leases at The Park at Valleypointe and Valley Court over the past year, contributed to the 5 percent rise in occupancy in the Northern Suburban Business District, the report said.
“We are seeing increased activity by tenants in all three office districts. Should this activity persist, office occupancy will increase in the future,” said Cronk.
Poe & Cronk developed Roanoke's original office market survey in 1987 and has conducted it annually using consistent criteria and methods of reporting. The company said this year's survey incorporates data covering more than 100 non-governmental office buildings measuring 10,000 square feet or more.