Norfolk Office Q4 2020 Market Report
Market Overview
>Norfolk’s vacancy rate increased slightly during Q4 2020, ending the quarter at 11.6%. This vacancy rate is 17 bps (basis points) higher quarter-over-quarter and 131 bps higher year-over-year. This increase in vacancy is not truly indicative of market conditions, however, as the market saw 111,211 square feet of positive net absorption over the quarter. Instead, this increase in vacancy rate is due to the delivery of the new 170,000 square-foot Summit Pointe office building. This delivery brought vacant inventory to the market, however did not affect absorption.
>Average asking rents increased slightly in Q4 2020, ending the quarter at
$20.25, an increase of $0.17 quarter-over-quarter and $0.15 year-over-year. Although rents initially took a hit due to COVID-19, they have begun creeping back up, and have now passed pre-pandemic highs.
>Sublease space has particularly become more prevalent since the pandemic began, with 730,661 square feet of sublet space available for lease to end Q4 2020. This is a 45.1% increase since the end of Q1 2020, when the effects of the pandemic first began being felt, which ended with 503,640 square feet of available sublease space.
Key Events
>Summit Point delivered a 170,000 square foot Class A office building to the market, which is now in lease-up. This is the largest Class A office building delivered to the market since 4525 Main Street Tower was delivered to Town Center of Virginia Beach in 2014.
>Panasonic Corporation of North America sold a former call center to Essential Contractors LLC for $4.25 million, or $85 per square foot. The 50,000 square-foot property is located at 661 Independence Parkway within the Greenbrier submarket of Chesapeake.
>Gracestone Investments purchased Volvo Office Park from Volvo Park Partners, L.P. The park, totaling 49,932 square feet, sold for $4.6 million, or $92.13 per square foot.
>A 31,000 square-foot medical office building located at 5716 Cleveland Street within the I-64/I-264 submarket was sold by the City of Virginia Beach to Montecito Medical Real Estate. The building, known as Gallery II, sold for $6.5 million, or $216.67 per square foot. It will continue to operate as medical office space for current tenants Jordan-Young Institute and Patient First.
>Norfolk’s vacancy rate increased slightly during Q4 2020, ending the quarter at 11.6%. This vacancy rate is 17 bps (basis points) higher quarter-over-quarter and 131 bps higher year-over-year. This increase in vacancy is not truly indicative of market conditions, however, as the market saw 111,211 square feet of positive net absorption over the quarter. Instead, this increase in vacancy rate is due to the delivery of the new 170,000 square-foot Summit Pointe office building. This delivery brought vacant inventory to the market, however did not affect absorption.
>Average asking rents increased slightly in Q4 2020, ending the quarter at
$20.25, an increase of $0.17 quarter-over-quarter and $0.15 year-over-year. Although rents initially took a hit due to COVID-19, they have begun creeping back up, and have now passed pre-pandemic highs.
>Sublease space has particularly become more prevalent since the pandemic began, with 730,661 square feet of sublet space available for lease to end Q4 2020. This is a 45.1% increase since the end of Q1 2020, when the effects of the pandemic first began being felt, which ended with 503,640 square feet of available sublease space.
Key Events
>Summit Point delivered a 170,000 square foot Class A office building to the market, which is now in lease-up. This is the largest Class A office building delivered to the market since 4525 Main Street Tower was delivered to Town Center of Virginia Beach in 2014.
>Panasonic Corporation of North America sold a former call center to Essential Contractors LLC for $4.25 million, or $85 per square foot. The 50,000 square-foot property is located at 661 Independence Parkway within the Greenbrier submarket of Chesapeake.
>Gracestone Investments purchased Volvo Office Park from Volvo Park Partners, L.P. The park, totaling 49,932 square feet, sold for $4.6 million, or $92.13 per square foot.
>A 31,000 square-foot medical office building located at 5716 Cleveland Street within the I-64/I-264 submarket was sold by the City of Virginia Beach to Montecito Medical Real Estate. The building, known as Gallery II, sold for $6.5 million, or $216.67 per square foot. It will continue to operate as medical office space for current tenants Jordan-Young Institute and Patient First.
