Despite widespread anxieties last year that the COVID-19 pandemic would devastate the commercial real estate market, conditions have been surprisingly upbeat in Virginia. In our first quarterly commercial market report, we examine trends in the office, retail, and industrial market in nine regions across the state. Using data from CoStar, and with input from members of the Virginia REALTORS^® Economic Advisory Board, this report summarizes recent trends in the commercial real estate market and provides an outlook for the rest of 2021.

Key highlights from the report:

• Virginia’s economy has been improving steadily since the summer, with gains in all regions across the state. Employment is still below pre-pandemic levels, but economic conditions are expected to improve as a result of the widespread availability of the COVID-19 vaccine and the third round of Federal stimulus spending.
• Office vacancy rates have risen modestly in most markets in Virginia, but rents have risen or remained stable through Q1 2021. Mid-sized and suburban markets have fared best. However, urban markets have seen more resiliency than many expected.
• The retail market has been hardest hit by the downturn, but the impacts have not been as severe as anticipated. Retail vacancy rates have edged up, and net absorption is down in most markets in Q1 2021.
• The industrial sector has been performing well through the pandemic and into the first part of 2021. Growth in e-commerce and shifting retail practices has fueled strong demand for industrial and warehouse space in Virginia.

Check out the full report on the Virginia REALTORS^® website. If you would like to serve on the commercial market report advisory group, please contact Virginia REALTORS^® Chief Economist Lisa Sturtevant.

*Information as of 04/15/2021