Norfolk Industrial Q3 2020 Marketview
> Norfolk’s vacancy sat at a historical low of 2.1% to end Q3 2020, with only 1.9% of warehouse space and 5.4% of flex space vacant. Quality space is difficult to find in the market, with only 1.1% of class A space currently vacant. This is an increase of 2 basis points (bps) quarter-over-quarter, as the quarter ended with 544,299 square feet of positive absorption. Much of this absorption occurred due to the delivery of Global Technical Systems’ new manufacturing facility, which brought 540,000 square feet of positive absorption to the Lynnhaven submarket.
> Average asking rents increased during Q3 2020, ending the quarter at $5.55, an increase of $0.05 quarter-over-quarter and $0.73 year-over-year. Rents are the highest they have been over the last decade, with market rents averaging $4.89 over that period. Much of this can be attributed to a tight, owner-favorable market that lacks available quality space.
> The 3rd Quarter produced strong leasing activity for vacant and future available space across the market. If activity continues at this pace during Q4 2020 and Q1 2021, vacancy will decrease to practically zero and new speculative developments will benefit.