Richmond, Virginia's a middle-office solution
A middle market like Richmond, Virginia, makes sense to invest in for several reasons. For starters, Richmond is a great cost-alternative to major metros and you can find more attractive yields. According to John B. Levy, big city yields average around 4.5%. In Richmond, the average yields are between 5.5 to 5.75%.
In addition, there is strong employment and population growth in Richmond, particularly in the Millennial area. In fact, last year, Time magazine named Richmond the #2 market where the most millennials were moving. This attracts companies looking for this talent and they need space for their corporate expansion which is where you come in. Richmond is outperforming the rest of the state in both employment and population growth. From a net in-migration standpoint: 2 of the top 3 areas we gain residents (and talent) from are D.C. and NYC.
There has been tremendous growth in the center city of Richmond with numerous corporate announcements in the last two years, much of this coming from higher cost markets D.C. and NYC including CoStar (D.C.), ICMA-RC (D.C.), Thomson Reuters (NYC) and AvePoint (NYC).
In addition to these new corporate heavyweights, there are eight Fortune 500 companies headquartered in Richmond, proving that Virginia’s capital region is not just a market for government and financial industries. Instead, there is an even and diverse economy where we specialize in education, medical, finance, insurance and more.
According to Cushman & Wakefield’s Thalhimer operation in Richmond, the highs in Richmond may not be as high as in other markets but the lows are nowhere near as low indicating Richmond is a stable market. Office rental rates have increased 5.2% over one year ago. Industrial rental rates have increased 4.2% over one year ago.
And there is a healthy amount of spec industrial space underway, indicating strong faith in the market. A few examples include the Panattoni, Liberty and Becknell sites.