M id A tlantic Real Estate Journal — Fall Preview — September 2023 — 9D
www.marej.com
V irginia B roker
By Charles DuBose, BWE Real estate developers and investors set their sights on Richmond, Virginia
T
the only area of the market seeing new development – the suburbs have also experienced significant investment. High interest rates, aging residen- tial units, and limited new supply have made the prospect of homeownership difficult for many, and as a result develop- ers are jumping on a growing build-to-rent (BTR) trend. Several new BTR projects are underway in the Richmond suburbs, with demographic trends supporting demand for this type of housing. Additionally, Richmond’s lo - cation at the center of the East Coast has made it a prime
target for industrial develop- ers. Asking rents for high-bay warehouses have risen by 17% 4 over the last year, and major companies like Lowe’s and Walgreens, among others, have invested millions in the Richmond area. Only a few years ago, a $25 million real estate investment in Richmond would have been newsworthy, but today, it is not uncommon to see $80-100 million deals. Rent growth in Richmond remains strong across property types, and world-class universities and a business-friendly environ- ment continue to attract new
companies and residents from across the East Coast. As we look toward 2024 and beyond,
he last decade has seen a lot of change in Virginia’s capital.
%E2%80%94%20A%20new%20 report,friendliness%20and%20 access%20to%20capital 3. https://www.grpva.com/news/
Fortune 500 corporations like Amazon and Meta are building data centers nearby, Lego is opening its first-ever US manufactur- ing facility in
This booming economy has made Richmond Virginia’s fastest growing region – and investors have noticed.
expect Richmond to remain a thriving market for real estate investment and development. 1. https://www.axios.com/local/ richmond/2023/02/13/richmond- fastest-growing-virginia 2. https://www.wric.com/news/ virginia-news/new-report-shows- virginia-is-second-best-state- for-business/#:~:text=(WRIC)%20
richmond-msa-sees-highest-resident- influx-in-virginia-15-nation-wide/ 4. https://www.colliers.com/en/ research/richmond/23q2-indus- trial-report Charles DuBose is a se- nior vice president at BWE, a national commercial and multifamily mortgage banking company. MAREJ
Charles DuBose
suburban Chesterfield Coun - ty, and the CoStar Group has established and is expanding its headquarters in Down- town Richmond. This booming economy has made Richmond Virginia’s fastest growing region 1 – and investors have noticed. Across all property types, real estate developers and investors from across the nation are looking to Rich - mond as a prime target for new investment. As a result, institutional sources of debt and equity from across the country are in- creasingly drawn to Richmond as they seek more reasonable valuations for their invest- ments. Construction costs, high interest rates, and more aggressive valuations in cities such as New York, DC, Char- lotte, and Raleigh have forced these sources to look outside of these markets, and Richmond has been a beneficiary. Rich - mond’s consistent job growth and desirable location in one of the best states for business 2 have also helped the city re- tain and attract new capital. Strong underlying market fundamentals (Richmond nets an average of 28 new residents every day 3 ) indicate that de- velopment in Richmond will continue to be a lucrative op- portunity for investors from across the country. As the city grows and welcomes new resi- dents, trendy neighborhoods outside of downtown like Man- chester and Scott’s Addition have seen an influx of people drawn by the neighborhoods’ amenities and “live, work, play” environment. Landmark mixed-use developments like the Diamond District—which includes a new stadium being built for the city’s “AA” minor league baseball team—as well as GreenCity and Rich - mond’s City Center are also garnering significant atten - tion and investment from out-of-market players. The City of Richmond isn’t
Made with FlippingBook - Online catalogs