Commercial Real Estate Recovery Expected to Continue in 2012

February 27, 2012 / Elizabeth Buckley, Commercial Property Analyst

In 2011 there was an increase in real estate activity in Richmond. A market review presentation sponsored by a local commercial property association attracted almost 300 attendees. Many large spaces were leased when usually smaller transactions took place. It was presumed that smaller businesses could not afford to rent office space or were simply not sure of rising cost in a troubled economy.

Commercial Real Estate Recovery Expected to Continue in 2012

It was reported that Richmond saw three times the volume of improvement seen on a national level. Multimillion dollar deals were closed in 2011 including one for the sale of Riverside on the James downtown, a $64 million sale. Currently, real estate is a more lucrative industry than stocks and bonds. Experts expect 2012 to see increased activity in the apartment sector.

Retail saw a 7.7 percent increase in 2011 over what transpired in 2010. It was the biggest increase since 1999. It will take a surge to recover from the 17,000 store closings in 2009-2011. More stores, 3,000-5,000, are expected to close this year. Economic factors and e-commerce sales contributed to the closings.

New retail enterprise in Richmond includes yogurt stores, restaurants, a Kroger grocery and a new fitness center. Industrial space will increase by two million square feet. About 12 percent of the industrial square footage in the city is vacant as compared to the national average of 10 percent. Experts attribute this to the many old tobacco warehouses not modern enough to be prized as rentals. Much of the commercial property in Richmond is likely to be occupied sooner than expected.

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