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Market Report

Richmond Office Market Report

2023 Investment Forecast

Corporate Commitments and Less Sublet Availability
Provide Optimism for Richmond’s Office Sector

Signs of encouragement emerge amid ongoing headwinds. Pandemic-era working arrangements continue to negatively impact tenant demand in Richmond. Many firms, particularly call centers, have returned substantial blocks of space to the market, as a sizable share of their employees have the ability to work from home. In fact, Truist single-handedly vacated more than 500,000 square feet in 2022. However, much of this space has already been backfilled, providing encouraging signs for the local office market. Although sector conditions are softer relative to pre-health crisis recordings, local fundamentals are in better shape compared to other major office markets. Entering this year, Richmond’s vacancy rate of 13.2 percent was 320 basis points below the national benchmark. Looking ahead, the metro will likely leverage its regional affordability, proximity to multiple universities and business incentives — such as tax breaks and relocation rebates — to lure additional residents and companies to the area. Firms like CoStar, Starplast and Intact Technology all committed to growing their Richmond-based headcounts in the coming years as well, providing some stability during times of economic headwinds.
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