2018 HAMPTON ROADS REAL ESTATE MARKET REVIEW & FORECAST
David Ring
Executive Vice President Commercial Banking Group Executive
John Asbury
Chief Executive Officer
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HAMPTON ROADS REAL ESTATE MARKET REVIEW & FORECAST
ONT NTS Message From The Center................... Executive Committee........................... Advisory Board..................................... E.V. Williams Center for Real Estate Members...........................8 Sponsors.............................................10 Economic Trends................................1 Office.................................................. 1 Industrial...........................................20 Retail.................................................2 Multifamily........................................28 Investment....................................... Residential........................................ 8 Sentiment......................................... 2
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elcome to t e 2018 am ton oads eal state arket evie orecast. or over t o decades, t e .V. Williams enter for eal state as been orking it am ton oads industr leaders to roduce t e arket evie . is ear s re orts e amine eig t areas of interest in t e am ton oads real estate markets economic trends, o ce, industrial, retail, mul famil , investment ro er es, residen al, and market sen ment. ank ou to t is ear s s eakers for s aring t eir industr e er se and contribu ng t eir valuable me and leaders i to t is event and to t e enter. As art of ld ominion niversit s trome ollege of Business, t e .V. Williams enter for eal state strives to connect t e am ton oads real estate communit to t e researc , curriculum, and students at t e niversit . roug our dedicated members i , com rised of communit leaders and industr e erts, e educate and em o er t e ne t genera on of rofessionals and leaders. We ould like to t ank our gro ing members i for su or ng t e enter, and for assis ng in t e engagement and educa on of our students. 2017 as an e ci ng ear for t e enter as it announced t e ne B. .B.A. in eal state and t e iring of ne full me Wendell . ranklin ecturer in ro ert anagement, ic ard Bu on. e enter ould not be able to ac ieve its mission it out t e dedica on of its ecu ve ommi ee, Advisor Board, and members. roug out t e ear, t e .V. Williams enter orks to engage its members, t e communit and students b os ng net orking events and conduc ng researc . o learn about our u coming events or to become more engaged it t e .V. Williams enter lease contact, irector, And ansz, ansz odu.edu, or, Assistant irector, Natalie Boe m, nmcgaug odu.edu. ank ou for attending t e 2018 arket evie orecast and for su orting t e .V. Williams enter for eal state. We look for ard to seeing ou at future events. J. Andrew Hansz, . ., A , A obert . tanton air in eal state, inance e artment, trome ollege of Business irector, .V. Williams enter for eal state Lawrence J. Colorito, A air, .V. Williams enter for eal state ecu ve Board enior anaging irector, Valbridge ro ert Advisors Natalie M. Boehm Assistant irector, .V. Williams enter for eal state o ditor, am ton oads eal state arket evie
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arles . igne , r. Norfolk e artment of evelo ment erem . tarke o neBank
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o obtain addi onal co ies of t is re ort, lease visit our ebsite .odu.edu business center creed ontact . Andre ansz, . ., A, A irector, .V. Williams enter for eal state trome ollege of Business ld ominion niversit 215 onstant all, Norfolk, VA 2352 ansz odu.edu • 757. 83.3505 The vie s expressed in this report do not represent the official position of Old ominion niversity E.V. Williams or any generous sponsors or donors.
2018 HAMPTON
ROADS
REAL ESTAT E MARKET R EVIEW & FO RECAST
W
for
real
estate
J. Scott Adams CBRE Hampton Roads
Craig Cope Commonwealth Commercial Partners
Pam Ellyson* Farmers Bank
Jeff Ainslie Ainslie Group
Hahns L. Copeland* DARVA Group Construction LLC
Margaret R. Flibotte Frye Properties, Inc.
Christopher Ambrosio Vandeventer Black LLP
Krista Costa Divaris Real Estate, Inc.
William Gambrell Right Coast Consulting Corp.
Stephen Armbruster Cherry Bekaert LLP
Ann K. Crenshaw Kaufman & Canoles, P.C.
Julie Gifford BECO
Matthew J. Baumgarten Tidewater Community College
John H. Crouse Saunders + Crouse Architects
Anthony Beck CenterPoint Properties
Jon R. Crunkleton Old Dominion University
Brian E. Gordineer City of Hampton, OfďŹ ce of the Real Estate Assessor
Ann Bolen Love Funding Corp.
Kim Curtis Tidewater Home Funding
Denise Brown BayPort Credit Union
Edward Denton Denton Realty Company
M. Albert Carmichael Harvey Lindsay Commercial Real Estate
Michael B. Divaris Divaris Real Estate, Inc.
Thomas Clemens Wells Fargo Business Banking Gail Coleman Howard Hanna Real Estate Services
8
Nancy Dove* Valbridge Property Advisors Helen E. Dragas The Dragas Companies
Howard E. Gordon Williams Mullen Dennis Gruelle Appraisal Consultation Group Janice M. Hall RRMM Design Build LLC Michael Hall Belfor Property Restoration
W
for
Carl L. Hardee The Lawson Companies Catherine Harris Harbor Tax Group Jeffrey S. Harris Harris Property Advisors Warren D. Harris Virginia Beach Economic Development Aimee Hower Kevin Hughes City of Suffolk Michael A. Inman Inman & Strickler P.L.C. Lynn Jernell Fulton Financial Corporation Jerry Jones All Access Property Management
real
estate
Larry Lombardi County of Currituck Economic Development Janet Moore S.L. Nusbaum Realty Co.
Jeff Stone BECO Robert M. Stanton Stanton Partners, Inc.
Thomas O’Grady Clancy & Theys Construction Company
G. Stewart Tyler Right of Way Acquisitions & Appraisals, Inc.
Victor L. Pickett Grandbridge Real Estate Capital
Samuel A. Walker, Jr. Pembroke Commercial Realty
F. Craig Read Read Commercial Properties, Inc.
Ed Ware, III Norfolk Redevelopment & Housing Authority
Brenda Reid Howard Hanna Real Estate Services Mark Richardson The Timmons Group, Inc. J. Randy Royal Kimley-Horn and Associates, Inc.
Robert Kerr Kerr Environmental Services
Tara Saunders Old Dominion University Real Estate Foundation
Frank Kollmansperger Entry Guard Systems
John Soscia Soscia & Company, Inc.
Robert T. Williams Tri-City Developers LLC Eddie Winters CRE Appraiser Steven Wright Chesapeake Department of Economic Development Michael P. Zarpas S.L. Nusbaum Realty Co
2018
10
sponsors
2018
STAGING
sponsors
MEDIA
11
rovided by
ampton Roads lanning istrict Commission.
ONOM TR NDS W Deputy Director, Dragas Center for Economic Analysis and Policy Strome College of Business, Old Dominion University
ANN A N A AN
A The ampton Roads economy is expected to gro at a much higher rate in . than in . . But regional gro th in ill once again be slo er than the historical annual average of . seen over the last thirty years and slo er than that of the nation. Whereas real in ation ad usted .S. ross omestic roduct gre annually at a compounded rate of . from to ampton Roads real actually fell by . over the same period.
W
A N
N
A
A
, 2001
2017
3% 2%
1.62%
2.12%
2.25%
2.17% 1.49%
0.80%
1%
-0.04%
0%
-1.09%
-1% -2% 2001 to to 2009
2009 to to 2015
2015to to 2016
2016 to to 2017e e
nited tates Ham ton oads â– United States â– Hampton Roads ou ce u eau of Economic Anal sis an t e Ol Dominion Uni e sit Economic o ecastin o ect Data on D inco o ates latest EA e isions in e tem e o U D is a ance EA estimate ile am ton Roa s D is ODU estimate
A
A
N
A
N N 2017
, 2000
25.0 25.0
19.7
20.0 20.0 Billions of Dollars Billions Dollars
19.3
19.9
15.0 15.0
10.0 10.0 10.0
2017 2017
2016 2016
2015 2015
2014 2014
2013 2013
2012 2012
2011 2011
2010 2010
2009 2009
2008 2008
2007 2007
2006 2006
2005 2005
2004 2004
2003 2003
2002 2002
0.0 0.0
2001 2001
5.0 5.0
2000 2000
The t in blo s of the reat Recession and stagnation in epartment of efense o spending since signi cantly contributed to the region s lac luster economic performance. o spending in the region increased at a . annual rate from to and has not gro n since . Coupled ith anemic private sector ob gro th the ampton Roads economy has simply limped along hile the .S. accelerated ahead.
ou ce U De a tment of Defense an t e Ol Dominion Uni e sit Economic o ecastin o ect * nclu es e e al Ci ilian an ilita e sonnel an ocu ement Data fo a e estimates an ata fo a e fo ecasts
1
A
Ca s on e ense iscre onar
N
N
NA
endin ,
to
N N ,
2012
2021
700 700
Billions of dollars
600 600
550 550
500 500 450 450
FY12 FY12
FY13 FY13
FY14 FY14
FY15 FY15 FY16 FY16 FY17 FY17 FY18 FY18 FY19 FY19 FY20 FY20 FY21 FY21 s ra ion 2012 BB 2013 B 2015 for as Sequestration ATRA2012 BBA 2013 BA 2015 forecast
ou ce u et Cont ol Act of O e uest ation Re o ts ( a ious ea s) u t e E tension of Continuin A ource B A2011,Budget e uests for 1 , B e uestra on date e ort and t e ld ominion niversit conomic orecas ng ro ect. Act ( R ) an t e Ol Dominion Uni e sit Economic o ecastin o ect
V
N
A
,V
A
N A
N A, AN
A
N
A
A
4% 2%
o iations
B 2007 2017 6.78% 4.69%
0% -2%
-2.44%
-4%
States nitedUnited tates
irVirginia inia
116 121 126
-8%
36 41 46 51 56 61 66 71 76 81 86 91 96 101 106 1111
-6%
Hampton Ham tonRoads oads
ou ce u eau of a o tatistics seasonall a uste ata an Ol Dominion Uni e sit Economic o ecastin o ect ea e Recession Dates a e ul ( am ton Roa s) anua (Unite tates) an A il ( i inia) Data a e t ou Decem e fo A an R an anua fo U
l
N
AN
N
an N inA ri a n s ri s in a
VA lo N or A , 2007 1n on oa s 2007
N 2017 1 N
1 o 2017
1 1 1
Professional and ScientiďŹ c rof ssional an i n ifi Management ana n ofof Companies o ani s Utilities ili i s Admin and Support in an or Real al Estate sa nfor a ion Information ol sal Trade ra Wholesale ail Trade ra Retail ons r ion Construction
-11 -15 15
19
4
-1 -2 -3 -4 -5 -5 -6 -7
Financean and Insurance inan ns ran
an fa rin Manufacturing
AN
1
Health Carean and Social al ar o ial Assistance ssis an Transportation and Warehousing rans or a ion an ar o sin
1
N
Pre-Recession Peak Dates: U.S.: January, 2008 Virginia: April, 2008 Hampton Roads: July, 2007
6%
Accommodation and Food o o a ion an oo
nli e the dra do n in defense spending in the s the private sector has yet to ll in the gap in ampton Roads. The uarterly Census of Employment and Wage reports that during First uarter of total private sector obs in ampton Roads ere about belo pea employment observed in rst uarter of . E orts to spur private sector gro th through innovation and entre preneurship are crucial to building a robust gro ing private sector in the region.
N
8%
1 6 11 16 21 26 31
The reat Recession impacted ob mar ets throughout the nited States. Compared to pea employment prior to the recession the .S. and the Common ealth lost . and . of obs through February . Since the trough in the .S. and Virginia have steadily added obs. In anuary the .S. had . more obs than prior to the reat Recession Virginia . . ampton Roads on the other hand lost . of obs during the reat Recession and has not yet recovered all the lost obs. At the end of ecember ampton Roads as still . obs belo pea employment observed in .
650 650
Billions of Dollars
Congress has yet to pass appropriations bills for Fiscal ear F ho ever the most recent Continuing Resolution CR that expires on March contains good ne s. The CR suspended the debt ceiling until March removing this potential stumbling bloc from Congressional negotiations. More importantly the CR raised the discretionary spending caps introduced by the Budget Control Act of by billion over the next t o scal years. This is not a trivial amount as the national defense caps rose by billion and the non defense caps by billion. With a large federal presence in ampton Roads to include over active duty personnel and federal employees the rise in spending ill li economic activity in the second half of and into . epending on the nal composition of the appropriations bills real gro th may rise from an initial forecast of . to . or more .
-10 10
-5 5
00
55
10 10
15 15
20 20
25 25
ou ce i inia Em lo ment Commission Co e e Em lo ment an a es i ate O ne s i an t e Ol Dominion Uni e sit Economic o ecastin o ect
N
A
B
a
N V A N A ,1 2017 r of n i i als lo on oa s 1999 o 2017
Thousands of Individuals
als
820 820
o san s of n i i
800 800 780 780 760 760 740 740 720 720
721
700 700
N
AN
N
A
A
N N
A
2016
2017e
2015
2014
2013
2012 2012
2005 2005 2006 2006 2007 2007 2008 2008 2009 2009 2010 2010 2011 2011
1999
660 660
2001 2001 2002 2002 2003 2003 2004 2004
680 680
ou ce U De a tment of a o AU ata an t e Ol Dominion Uni e sit Economic o ecastin a uste Data ill e e ise in a c A il
o ect ot seasonall
N A ,V , 2007 2017
N A,
12 12
10.0%
10 10
7.9%
88 66
4.1
7.3%
44
4.1
22
United a s States
ou ce u eau of a o tatistics seasonall a uste a e t ou Decem e
Virginia ir inia
Jul-16 l 16
an 17 Jan-17 Jul-17 l 17
Jan-16 an 16
l 14 Jul-14
an 15 Jan-15 Jul-15 l 15
Jul-13 l 13
Jan-14 an 14
l 12 Jul-12 Jan-13 an 13
an 12 Jan-12
Jul-11 l 11
Jul-10 l 10
Jan-11 an 11
Jul-09 l 09
Recession ni ssion
Jan-10 an 10
Jan-07 an
Jul-08 l 08 Jan-09 an 09
3.7
00
l 07 Jul-07 Jan-08 an 08
Unemployment Rate n lo n (%) a
nemployment rates at the national state and local level all rose in response to the reat Recession. Since the end of the recession ho ever e have seen mar ed declines in unemployment rates. The .S. economy is near full employment and e are seeing the beginnings of age increases because of labor shortages. The anemic performance of the ampton Roads economy can also be seen in the unemployment rate. rior to the reat Recession ampton Roads unemployment as belo that of Virginia. Recently at the end of the ampton Roads unemployment rate as the same as the .S. and higher than Virginia.
796 802
797
792
2000 2000
Even though the ob situation in ampton Road has been uite grim for the last ten years an examination of data from ocal Area nemployment Statistics A S provides a slightly di erent and rosier picture of the labor force and number of individuals employed. About more individuals are in the regional labor force today than in . The number of individuals stating that they are actively employed has also risen by about over the same period. The divergence bet een these t o sets of information on the labor mar et could be explained partly by a possible reduction in the number of part time obs and due to the emergence of the gig economy here more and more individuals simply prefer to be self employed.
Roads a Hampton on oa s
ata an t e Ol Dominion Uni e sit Economic o ecastin
o ect Data
1
O
Vice President, Divaris Real Estate, Inc.
The ampton Roads office mar et experienced leasing activity similar to the previous t o years ith a vacancy rate of . at the end of the fourth uarter. This vacancy rate as do n from . at the beginning of the year. Overall as ing rents increased in the past months by . in the region
hich remain belo their pre recession pea . The year ended ith positive absorption totaling s uare feet in . There is minimal ne office construction on the hori on. Space available for sublease is ust under s uare feet a little more than of the total available space in the mar et. Sublease space available is do n from s uare feet at the beginning of the year.
AC A N C L
L
Vacanc 16.00%
1 .00
14.00%
1 .00
12.00%
12.00
10.00% 10.00 8.00% 8.00 6.00% .00 4.00% .00 2.00% 2.00
2005 20052 2005 3 2005 200 20061 200 2 200 3 200 2007 20071 2007 2 2007 3 2007 2008 1 2008 2008 2 2008 3 2008 200 1 20092 200 200 3 200 2010 1 2010 2010 2 2010 3 2010 2011 1 2011 2011 2 2011 3 2011 2012 1 2012 2012 2 2012 3 2012 2013 1 20132 2013 2013 3 2013 201 1 20142 201 201 3 201 2015 1 20152 2015 2015 3 2015 201 1 201 20162 201 3 201 2017 1 2017 20172 2017 3 2017
0.00% 0.00
Total
otal
A
A
B
B
ou ce Co ta
1
ou
There ere several signi cant lease transactions in that ent under the radar as most ere rene als. e to the mar et Wisconsin
hysicians Service Insurance Corporation removed a big bloc of sublease space at the beginning of and further committed to ampton Roads by signing a direct lease.
L A Tenant
Building
Date
US Coast Guard
Main Street Tower 300 E Main Street, Norfolk, VA
4th Qtr
129,968
Expansion/renewal
WPS MVH
400 Butler Farm Road Hampton, VA
1st Qtr
100,632
New to market, sublease/direct lease
US Air Force
Research Quad III 300 Exploration Way, Hampton, VA
4th Qtr
97,490
Renewal
Amerigroup
Corporate Center V 4425 Corporation Lane, Virginia Beach, VA
2nd Qtr
70,760
Renewal
Optima Health
Military Circle 824 N Military Highway, Norfolk, VA
1st Qtr
45,000
New lease
ampton Roads o ered many office investment opportunities in . With sales prices so high in primary and secondary mar ets ampton Roads has proved acceptable to national investors. Total office building sales activity as up compared to . The price per s uare foot
AL Building
Square Footage
Square Footage
Lease Type
averaged . . Capitali ation rates ere lo er in thus ma ing properties more expensive averaging . compared to the same period in hen they averaged . . The largest transaction that occurred as the ac uisition of The A Building in orfol at a cap rate.
A N AC
N
Sales Price
Price Per Square Foot
The ADP Building 2 Commercial Place, Norfolk, VA
288,662
$57,000,000
$197.46
Concourse at Northampton 5800 Northampton Blvd, Norfolk, VA
302,186
Part of $1,300,000,000 Portfolio Sale
$174.74 - Portfolio Price
42,000 44,377
$18,352,000 $20,048,000
$437.00 $452.00
129,183
$15,900,000
$123.08
225 Clearfield Avenue 229 Clearfield Avenue, Virginia Beach, VA Smithfield Building 6160 Kempsville Circle, Norfolk, VA
W The absorption of office space in suburban submar ets outpaced the central business districts. As vacancy tightened rents in the suburban mar ets increased by an average of . per rentable s uare foot. Modest to limited ne construction and strong absorption led to very fe large bloc s of space available. As rents rise only slightly
there is a lac of support for the cost to occupy ne construction. We entered ith ve pro ects totaling s uare feet under construction. The largest of the ve is the s uare foot ollar Tree Office To er on the company s acre campus on Volvo ar ay in Chesapea e. It ill be occupied by ollar Tree. Building One Tech Center is an s uare foot speculative office building under construction in the Oyster oint submar et of e port e s.
1
A
V
out eigh the costs of renovations. A prime example is East Main Street in o nto n orfol . Office buildings ill attac the concept of placema ing adding seating areas to once sparse office lobbies to create more alternative shared or spaces.
22 1.8 1.8 1. 1.6
emand for medical office buildings remains high. The historical stability ma es medical office buildings attractive to investors. ealthcare services ill also move into nontraditional locations including struggling retail centers to reduce costs and ma e these services more readily accessible to patients.
1.4 1. Millions of SF illions of
1.2 1.2 11
0.8 0.8 0.6 0. 0.4 0. 0.2 0.2 00
2005 2006 200 2007 2008 200 2010 2011 2012 201 2015 201 2017 2005 2007 2008 2009 2010 2011 2012 2013 2013 2014 2015 2016 2017
ou ce Co ta
ou
As unemployment rates remain lo scarcity of uali ed or ers is ta ing its toll on the area s gro th. ampton Roads businesses are no competing for or ers ho are being lured by big cities companies. Firms are indicating that office locations ith the ideal ive Wor and lay environments are critical in the recruitment and retention of employees. rban and Institute reported that at . ampton Roads had the highest gro th in millennial residents since compared to more than urban areas Time maga ine une . The gro th as attributed in signi cant part to the military but no doubt can be credited to the lifestyle bene ts of the region s climate and proximity to beaches and ma or cities.
W The nation s office mar et continues to hover near business cycle highs for occupied space. ationally rents gre at about . and ere almost per s uare foot higher than pre recession pea s. office vacancy ended at . across the country. Overall ob gro th slo ed in most mar ets. The unemployment rate fell to . in October a rate not seen since ecember . Sales of office buildings ere also do n from a year earlier although volume as still ell above the historical average.
W Older Class A buildings ill renovate as there is a lac of ne office inventory in the mar et and costs of ne construction far
18
ocally executive suites are at capacity and e could see other national shared office space companies and co or ing facilities enter the ampton Roads mar et.
The pace of office leasing in ampton Roads ill slo in due to lac of available space. Expansion and relocation of professional services healthcare and defense government contracting sectors should drive demand. Office relocations are most li ely to be fueled by lease expirations. Companies loo ing to capture and retain employees ill expect to upgrade office premises. Amenities such as co or ing spaces nearby apartments restaurants and shops ithin al ing distance ill be critical to tenants. The e ect of the transoceanic cables transforming the region into a high speed data hub is beginning to sho momentum. ata centers and other high speed internet consumers ill enter the mar et in . Aside from a fe build to suits ne office construction ill be limited allo ing fundamentals to continue to recover in the near term. The limited supply of ne properties ill favor landlords and lead to the rene al of current leases. With continued modest absorption vacancy rates are expected to decline further. Average rents should increase slightly in but that does not mean it is a landlord s mar et. ro ected rent gro th is approximately . As e approach e uilibrium landlords ill continue to o er free rent he y tenant improvement pac ages and other incentives to retain and attract tenants hile trying to maintain face rate rentals. We elcome the ne normal.
WHAT WILL YOUR LEGACY BE? Branch Civil, one of the leading Site Development and Heavy Civil companies in Virginia and North Carolina, has over 76 years of experience and a track record of providing high quality services for both private and public sector clients. On time. On budget. Done right. For superior client-focused service come get to know us at branchcivil.com, or call 757-435-5548 and ask for Erica Viola.
BUILDING LEGACIES FOR A THRIVING FUTURE. S I T E D E V E L O P M E N T | D E S I G N - B U I L D | H E AV Y C I V I L C O N S T R U C T I O N
ND STR A
W Senior Vice President, CBRE | Hampton Roads
HAM # of Buildings >20,000 Square Feet
N
A
N
AL MA
NA H
Total Square Footage (SF)
2017 Net Absorption (SF)
Vacancy Rate
Average Asking NNN Lease Rate
Completed New Construction (2017 SF)
Southside Industrial
717
56,277,297
1,654,915
4.9%
$4.38
1,142,290
Peninsula Industrial
193
23,603,795
449,333
3.2%
$5.92
150,000
Hampton Roads Total
910
79,881,092
2,104,248
4.4%
$4.68
1,292,290
ou ce Co ta
Industrial mar et fundamentals improved across the board for ampton Roads in as expanding businesses absorbed over . million s uare feet of industrial space. Since the vacancy rate has plummeted from . to . the lo est industrial vacancy on record. uring the last ve years net absorption totaled over . million s uare feet averaging nearly . million s uare feet annually.
AC A N C A N A B
10.0% 10.0%
11,980,000 980 000
9.0% 9.0%
11,760,000 760 000
8.0% 8.0%
11,540,000 540 000
7.0% 7.0%
11,320,000 320 000
6.0% 6.0%
11,100,000 100 000
5.0% 5.0%
880,000 880 000
4.0% 4.0%
660,000 660 000
3.0% 3.0%
440,000 440 000
2.0% 2.0%
220,000 220 000
1.0% 1.0%
20
2013 2013
2014 2014
2015 2015
2016 2016
am ton Roa s Resea c
N
22,200,000 200 000
00
C RE
2017 2017
Net Absorption Net Absorption Square Footage Square Footage (Left Axis) (Left Axis)
Industrial Vacancy Industrial Rate- (Right Axis) RateVacancy (Right Axis)
0.0% 0.0%
ou ce C RE
am ton Roa s Resea c
Of ampton Roads ma or transactions in several ere expansions by current arehouse users including Center oint roperties expansion of the Ace ard are Import Redistribution Center by s uare feet in Su ol and ife et ealth s s uare foot lease of a portion of the t o building ondon Bridge complex in Virginia Beach.
L A Company Name
Location
SF
Comments
Ace Hardware CenterPoint Intermodal Center - Suffolk 475,020
138,060 SF Expansion of Class A Single-Tenant Building
Welspun USA
Virginia Regional Commerce Park-B - Suffolk
200,880
Indian company, new to market
U-Play Corporation
1440 London Bridge Rd. - Virginia Beach
200,000
Chinese company, new to market
Georgia Partners Commonwealth Commerce Center - Suffolk 120,800 Cold Storage LLC
LifeNet Health 1440 London Bridge Rd. - Virginia Beach 100,000
Cold storage industry veteran new venture Expansion by Virginia Beach based company
The s uare foot Virginia Regional Commerce ar B as the rst pure speculative development in ampton Roads in over years and landed a s uare foot lease ith India based Welspun SA. Another foreign company China based lay Corporation leased s uare feet also at ondon Bridge. Overall seven pro ects totaling . million s uare feet delivered in the most s uare footage completed since . million s uare feet opened in .
i inia Re ional Comme ce a
De elo e
anattoni De elo ment Com an
Sales activity in included value add investors ac uiring long vacant buildings ith plans to renovate and improve the assets as ell as numerous o ner users see ing to o n and improve property in support of their operations. The table belo highlights several investor and o ner user sales.
21
B L N
AL
Property
Year Built
Bldg SF
Sale Price
S/SF
Buyer Type
1440 London Bridge Rd. - Virginia Beach
1996
400,000
$8,500,000
$21.25
Investor
300 & 400 Port Centre Parkway - Portsmouth
1997
76,781
$6,850,000
$89.21
Investor
1569 Diamond Springs Rd. - Virginia Beach
1980
100,000
$6,100,000
$61.00
Investor
1715 Merrimac Trl - Williamsburg
1978
146,710
$4,820,000
$32.85
User Buyer
3801-03 E. Princess Anne Rd - Norfolk
1971
83,275
$1,800,000
$21.62
User Buyer
W early . million s uare feet of ne industrial buildings ere completed in the largest being Center oint roperties s uare foot Class A distribution arehouse for Emser Tile follo ed by anattoni s Virginia Regional Commerce ar B s uare feet InterChange s ortsmouth ogistics Center s uare feet rintpac s s uare foot expansion in Oa land Industrial ar in e port e s the s uare foot expansion of Ace ard are by Center oint roperties and the o ner occupied build to suit for I IT in Chesapea e s uare feet . Consistent ith the long term trend for industrial logistics development in ampton Roads ve of the seven completed pro ects ere build to suit for a single user. The lion s share of build to development over the last years . million s uare feet as developed by Center oint roperties at the acre Class A industrial par Center oint Intermodal Center Su ol . Other than anattoni evelopment InterChange roup is the only developer to build a speculative building during the last ten years delivering the s uare foot InterChange ortsmouth ogistics Center in . InterChange hedged development ris by leasing of the building to a developer o ned business. ANN AL N
AL N
C N
C
N B L N
A
A
C M L
2 000 000 2,000,000
In ecember lobal Technical Systems TS a Virginia Beach based advanced engineering solutions company announced a planned . million investment for a ne s uare foot manufacturing facility o Bird ec Road in Virginia Beach. According to plans announced by TS the ne plant hich ill produce advanced batteries to po er machinery data centers and other uses is scheduled to open in March and ill eventually employ people.
1 800 000 1,800,000 1 600 000 1,600,000
1,400,000 1 400 000 1,200,000 1 200 000 1,000,000 1 000 000 800,000 800 000 600,000 600 000 400,000 400 000 200,000 200 000 00
22
2008 2008
2009 2009
2010 2010
2011 2011
2012 2012
2013 2013
2014 2014
2015 2015
2016 2016
2017 2017
With only . of all industrial properties vacant ne and expanding businesses ill have to invest in building ne arehouse and manufacturing facilities or on renovations and upgrades to their existing buildings. In order for s . million s uare feet of net absorption to be generated in the region s leading developers bro ers and sta eholders must partner ith state local and ort of Virginia economic development teams to in more ma or ne arehouse and manufacturing investments across ampton Roads.
1 350 000 1,350,000
10.0% 10.0%
1 200 000 1,200,000
9.0% 9.0% 8.0% 8.0%
1 050 000 1,050,000
7.0% 7.0%
900 000 900,000
6.0% 6.0%
750 000 750,000
Port of Virginia
ort of Loaded VirginiaImport LoadedTEUs I port s Industrial Vacancy Rate (Right Axis)
5.0% 5.0%
600 000 600,000
4.0% 4.0%
450 000 450,000
3.0% 3.0%
300,000 300 000
2.0% 2.0%
150,000 150 000
00
Industrial Vacancy Rate (Right Axis)
1.0% 1.0%
2013 2013
2014 2014
2015 2015
2016 2016 ou ce
2017 2017
0.0% 0.0%
e o t of i inia C RE
am ton Roa s Resea c
90 Miles of Shoreline. 360 Degrees of Opportunity. For a climate that promises success in every direction, Access the New Portsmouth to grow your business. Call today to discuss your needs and learn about our vast opportunities. All 360 degrees of them. Email Robert.Moore@PorstmouthVa.Gov or call 757.393.8804
Vice President, S.L. Nusbaum Realty Co.
The ampton Roads retail mar et has continued to sho positive trends during . The end of year overall retail vacancy rate in the region as . . Shopping centers had a vacancy rate of . . o er centers had a vacancy rate of . . Specialty centers had a vacancy rate of . . Malls contrary to popular belief had a vacancy rate of . . eneral retail had the lo est vacancy rate at only . .
per s uare foot. The po er center category is comprised of centers containing s uare feet ith an as ing rate of . per s uare foot. The specialty center category doubled to four centers ith a total of s uare feet of space. The mall category is comprised of regional malls super regional malls and lifestyle centers ith an as ing rate of . per s uare foot. eneral retail properties house buildings totaling s uare feet ith an as ing rate of . per s uare foot.
There is a total of retail buildings and centers ith a total of s uare feet in the ampton Roads region. Of that total there are shopping centers containing s uare feet ith an average as ing rate of .
s uare feet of ne retail product came online in . The grocery sector has continued to develop at a rapid pace. idl Aldi roger Wegmans and ublix announced ne stores in the region last year.
N
AB
N, N
L
AC A N C 8.0%
Forecast
1.0
7.5%
0.8
7.0%
0.6
6.5%
0.4
6.0%
0.2
5.5%
0.0
5.0%
-0.2
4.5%
-0.4
2012
2013
2014
2015
2016
2017
2018
2019
2020
■ Net Absorption ■ Net Deliveries ■ Vacancy ■ United States Vacancy
2
2021
4.0%
Vacancy
Absorption & Deliveries in Millions SF
1.2
Top 5 Retail Leases in 2017
1)
s uare feet Wegmans Virginia Beach
2)
s uare feet Walmart illtop S uare Virginia Beach
3)
s uare feet One ife Fitness am ec Crossing Virginia Beach
4)
s uare feet
5)
s uare feet Floor
eMans arting Victory West ortsmouth cor eninsula To n Center ampton
Top 5 Retail Sales
1)
reenbrier S uare
s uare feet Chesapea e
2)
arbour Vie Mar etplace
3)
ramer Tire or olio
4)
Mercury la a
5)
Tide ater
s uare feet Su ol s uare feet
s uare feet or olio
ampton Roads
ampton
s uare feet
ampton Roads
Top 5 Retail Developments
1)
s uare feet
orfol
2)
s uare feet Waterside istrict
3)
s uare feet Fox Mill Centre hase II
4)
s uare feet
5)
s uare feet Shops at Centerbroo e Village Su ol
idl
remium Outlets hase I
orfol
orfol loucester
ampton Roads multiple locations
W The
ampton Roads retail mar et pea ed in . There is signi cant discussion both inside and outside of the mar et that retail is a dying breed. This is anything but true. Retail investment sales activity fully blossomed in . Capitali ation rates ho ever ere inching up locally in averaging . . This rate rise as partly due to higher interest rates and partly due to category shi s in purchases made. ampton Roads as a tertiary mar et became more desirable due to the lac of product and historically lo cap rates in ma or mar ets.
2
Store closings are nothing ne in the retail arena. This trend continued in ampton Roads last year. Mattress Firm Farm Fresh Toys R s regg Mart oe s Crab Shac Family Christian Boo stores Wet Seal Radio Shac Bebe American Apparel and ayless Shoe Source among others all announced store closings in the region. e store opening announcements ere made by I EA One ife Fitness Big ots Floor cor Belo Tuesday Morning ome oods idl Aldi ublix and Wegmans among others. e stores out eighed closings in ith a positive net absorption of s uare feet.
W According to ac leinhen Chief Economist for the ational Retail Federation the economy as in great shape going into the holiday season and retailers had the right mix of inventory pricing and staffing to help them connect ith shoppers very efficiently. The stoc mar et sa record highs. American consumer con dence hit a year high in . The unemployment rate as lo ered to . at year end the lo est level since . e tax cuts ere announced and signed o on before year end. All are great attributes for the .S. consumer and the retail real estate mar et as a hole.
W Ama on s purchase of Whole Foods last year as one of the most tal ed about nancial ne s stories of . Ama on oins the li es of Apple Warby ar er Bonobos ac uired by Walmart last year asty al Everlane and Birchbox ho have all found that physical retail stores are a must for continued success. Other online retailers ill adopt this strategy. Many ey ampton Roads retailers have found that e commerce is the perfect complement to their full line stores. Walmart Staples Macy s The ome epot Best Buy and ordstrom are all among the top ten e commerce retailers in the .S. Clic and collect is a ne driving force for retail sales. The addition of entertainment elements in retail se ngs is another trend that continues to gain momentum. Mobile pla orms arti cial intelligence AI augmented reality AR and virtual reality VR are all elements that are sho ing up in retail se ngs as ell. As technology continues to improve retail sales ill continue to rise. Retail landlords and tenants are nimble and can change to meet the ever changing demands of the retail consumer.
2
etail a ocal se t ink not. o ever, e ave entered t e da n of a ne era in retail real estate due to un recedented tec nological advancements. e use of A , A , V , and com uter en anced logis cs is c anging t e face of retail in magni cent a s. mni c annel retailers ill be t e clear leaders in 2018 and be ond. ustomer service and engagement ill return on a muc larger scale. e investment sales sector ill see strong ac vit again t is ear it ac vit ta ering o at t e end of 2018 and into 201 . is e ecta on is due to rising interest rates, bank tem erament, and lack of available roduct.
e tradi onal s o ing center ill con nue to lag ot er retail segments. edical, o ce, and entertainment tenants ill be suited on a larger scale t is ear. o er centers ill face t e c allenge of reduced bo sizes. ecialt centers ill con nue to be a reference for man consumers. Bargain s o ing as become muc more t an a cult enomenon at t is uncture. eneral retail ill con nue to e and as tenants seek freestanding buildings to meet t e needs of toda s consumers uickl . e ca rates on t ese ro er es ill con nue to be market leaders. 2018 ill see a con nued evolu on in retail environments to suit t e needs of t e ever c anging consumer.
2
M T AM
President of Operations, The Franklin Johnston Group
Moderation as a recurring theme in nearly every national multifamily outloo for . A er a sustained period of historically strong apartment fundamentals driven by a favorable supply demand imbalance follo ing the recession construction activity ramped up and ne deliveries began to outpace absorption beginning in . The accretive e ect of surplus demand became increasingly muted over several consecutive
years as the level of ne deliveries substantially exceeded the long term average and slightly outpaced the rate of absorption. Conse uently occupancy levels and e ective rent gro th are currently trending to ards their respective historical averages. The favorable but tempered expectations of ere largely reali ed and promises more of the same. The sector as a hole should continue to see steady albeit modest gro th hile speci c asset classes and locations have an opportunity to outperform due to strong demand from underserved lo er and middle income renters.
S U P P LY & D E M A N D T R E N D S - U N I T E D STAT ES
Supply & Demand Trends - United States 375,000 375,000 325,000 325,000
Forecast
275,000 275,000
Units Units
225,000 225,000 175,000 175,000 125,000 125,000 75,000 75,000 25,000 25,000 (25,000) 25,000
2005
2006 200
2007 2007
2008 2008
Deliveries eliveries
2009 200
2010
2011
Absorption Net Net Absor on
2012
2013 201 2014 2015 2015 201 2016 2017 2017 2018 2018 201 2019 2020 2020 2021 2021 2022 2022 2013 Deliveries istHist Avg.Avg.eliveries
Hist. Net Avg.Absor Net Absorption ist. Avg. on
ou ce Co ta
28
ou
Decem e
M U LT I FA M I LY F U N DA M E N TA L S - T R E N D BY Q UA RT E R - U.S.
Forecast
94.0% .0
4.0% .0
Occupancy
Occupancy
93.5% 3.5
2.0% 2.0
93.0% 3.0
0.0% 0.0
92.5% 2.5
-2.0% 2.0
92.0% 2.0 91.5% 1.5
-4.0% .0
91.0% 1.0
-6.0% .0
2005Q11 200 2006Q11 2007 2007Q11 2008 2008Q11 200 2009Q11 2010 2010Q11 2011 2011Q1 1 2012Q1 2005 2012 1 2013Q1 2013 1 2014Q1 201 1 2015Q1 2015 1 2016Q1 201 12017Q1 2017 12018Q1 2018 12019Q1 201 12020Q1 2020 12021Q1 2021 12022Q1 2022
ccu anc Occupancy
ist Hist Avg.Avg. cc Occ
Effective Rent Growth
ec ve ent ro t
Hist Avg. Eff Rent Growth
ist Avg.
ou
Decem e
underperforms hen the national multifamily mar et is in an early to mid expansion period falls in line during late expansion and outperforms through the recession and early recovery phases. As the national mar et entered the later stages of the most recent expansion it is not surprising to see apartment fundamentals in ampton Roads begin to converge ith the broader mar et. As e loo to ards the broader national mar et is experiencing mean reversion hich has traditionally set the stage for ampton Roads to outperform. There is absolutely an opportunity to reali e this scenario but there are some genuine challenges to overcome.
D E L I V E RY T R E N D - H A M P TO N ROA D S
W
Delivery Trend - Hampton Roads
3,500 3,500
Forecast
3,000 3,000 2,500 2,500 Units Units
The total inventory of apartments in ampton Roads increased by approximately since . That is a signi cant increase but is substantially in line ith gro th at the national level over the same period. e deliveries each year from to surged to levels ell in excess of the mar et s historical average. evelopment activity decreased signi cantly in hich contributed to improved fundamentals last year. o ever ne deliveries are expected to ramp up again in before a more protracted taper from to .
1
ent ro t
ou ce Co ta
While at occupancy and decelerating rent gro th characteri ed the national mar et ampton Roads tic ed up slightly in both categories bet een and . istorically spea ing ampton Roads has en oyed very lo volatility regarding apartment fundamentals. The region does not experience the double digit rent gro th occasionally seen in speci c supply constrained core mar ets but it also rarely endures negative rent gro th. The reality is that ampton Roads o en
Eective Rent Effective Rent Growth Growth
.0 6.0%
.5 94.5%
2,000 2,000 1,500 1,500 1,000 1,000 500 500 2005 200 2006 2007 2007 2008 2008 200 2009 2010 2010 2011 2011 2012 2005 2012 2013 2013 2014 201 2015 2015 2016 201 2017 2017 2018 20182019 201 2020 20202021 20212022 2022 Deliveries eliveries
Hist eliveries Avg. Deliveries ist Avg.
ou ce Co ta
ou
Decem e
2
Before giving too much or too I NInventory V E N TO RY GGrowth ROW T H 2013 little import to the anticipated 2013TOto2017 2017 spi e in deliveries it is Virginia essential to bear in mind that the Virginia Beach Beac Newport dilutive impact of ne supply is Ne ortNews Ne s Norfolk experienced more at the micro Norfolk City it Hampton neighborhood level than it is at am ton City it Chesapeake the macro submar et or mar et esa eake level. Multiple pro ects leasing Portsmouth ortsmout up in relatively close proximity James ames City it ill invariably have an adverse York ork e ect on the communities in Suffolk u olk that immediate area and on Williamsburg Williamsburg similar product in ad oining Isle Wightt sle of Wig neighborhoods. o ever ne Poquoson o uoson City it supply in and of itself does Gloucester loucester not necessarily represent a 5,000 10,000 15,000 20,000 25,000 30,000 5,000 10,000 15,000 20,000 25,000 30,000 deterioration of fundamentals at EOY 2012 Inventory 2013 2013 to 2017 the mar et or submar et level. In 2012 nventor Units Added nits Added to 2017 addition to surplus demand the ou ce Co ta ou Decem e appropriate distribution of ne pro ects both geographically ithin a mar et and by product type can and ill insulate the broader mar et submar et against the deleterious e ects of a hyper supply environment. Virginia Beach and orfol are prime examples of this. They ere number one and t o respectively in terms of gross units added over the last ve years but the relative change to each of their respective inventories as roughly in line ith the mar et average. The ne supply as generally ell distributed across multiple submar ets ith relatively strong demand. While there assuredly are poc ets ithin those submar ets that have seen some short term dilution as a result of the ne supply both submar ets currently have higher occupancy rates than the ampton Roads average.
A N N UA LJob J O BGrowth G ROW T H Annual There is perhaps no variable more directly correlated to multifamily performance than ob gro th. Conse uently it is signi cant that Moody s Analytics currently estimates that ampton Roads lost obs in a . reduction versus the prior year. Since total employment in ampton Roads gre at an average rate of . annually hile the broader .S. mar et gained . per year. For better or orse the ampton Roads economy is still highly sensitive to expansion and contraction in the si e of the .S. military and closely related levels of defense spending. espite gradual diversi cation represented by gains in the areas of trade professional and business services education and health services and leisure and hospitality services the area s short term employment outloo continues to be ea .
0
2.5 2.5%
Forecast
2.0 2.0% 1.5 1.5% 1.0 1.0% 0.5 0.5% 0.0 0.0% 0.5 -0.5% 2011 2012 2012 2013 2013 201 2014 2015 2015 201 2016 2017 2017 2018 2018 201 2019 2020 2020 2021 2021 2022 2022 2011 Roads amHampton ton oads ou ce
United States nited tates oo
s Anal tics
ecis
et o Decem e
While the impact on multifamily is not uite as pronounced as employment gro th increases and decreases in population household formation rate and personal income ill also have an impact on the multifamily demand. All else e ual more people see ing housing ith more money to spend reduces vacancy and allo s for rent gro th. ampton Roads has generated positive gures for each of these variables but still the rate of gro th has materially lagged the nited States average over the past six years. It is important to note that the apparent convergence bet een the nited States and ampton Roads averages during the forecast period is a product of the metrics deteriorating at a national level rather than any mar ed improvement in ampton Roads economic fundamentals. Some degree of uncertainty in regards to the e ectiveness of current .S. policy ma ing decisions is leading to muted expectations on gro th. Bearing all of this in mind Moody s Analytics concludes that ampton Roads gap ith the .S. ill shrin in and gro th could surprise on the upside if Congress li s the cap on defense spending. Consumer services ill recover and trade ill be a pillar of strength. ... o ever longer term ampton Roads ill slightly lag the .S. due to an overreliance on federal spending.
A N NAnnual UA L P OPopulation P U L AT I O NGrowth G ROW T H 0.9% 0. 0.8% 0.8 0.7% 0.7 0.6% 0. 0.5% 0.5 0.4% 0. 0.3% 0.3 0.2% 0.2 0.1% 0.1 0.0% 0.0
Forecast
2014 2015 201 2016 2017 2018 201 2019 2020 2021 2022 2011 2012 2013 201 Hampton am tonRoads oads
Source: Moody's Analytics / Precis Metro / December 2017
ou ce
oo
United States nited tates
s Anal tics
ecis
et o Decem e
A N NAnnual UA L P EPersonal RS O N A L Income I N C O M Growth E G ROW T H 7.0% 7.0
Forecast
6.0% .0 5.0% 5.0 4.0% .0 3.0% 3.0 2.0% 2.0 1.0% 1.0 0.0% 0.0 -1.0% 1.0
2011 2012 2013 2014 2016 2017 2018 201 2019 2020 2021 2022 201 2015 201 Hampton am tonRoads oads
ou ce
oo
Unitedtates States nited
s Anal tics
ecis
et o Decem e
EFFECTIVE SOLUTIONS
FOR YOUR
COMMERCIAL REAL ESTATE
TRANSACTIONS
Vandeventer Black attorneys represent local, national, and international companies that purchase, sell, lease, finance, and/or manage commercial real estate. Our firm also acts as legal counsel to commercial lenders financing projects secured with real estate collateral. Our experience in the legal and business aspects of your industry translates to practical, timely, and cost-effective legal solutions for your transaction, in the following areas:
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As cap rates continue to tighten to historically lo levels in the core national and regional multifamily mar ets secondary regional mar ets li e ampton Roads have become an attractive alternative for many investors searching for yield. While the vast ma ority of transactions as recently as ve years ago included mostly local and regional players some large institutional groups have entered the mar et and are actively loo ing to ac uire and expand. The increased demand over the last couple years has spurred higher deal volume and driven the average cap rate bac under . .
$800,000 800,000 $700,000 700,000 $600,000 00,000 $500,000 500,000 $400,000 00,000 $300,000 300,000 $200,000 200,000 $100,000 100,000 0$0
8.0 7.0% 7.0 6.0% .0 5.0% 5.0 4.0% .0 3.0% 3.0 2.0% 2.0 1.0% 1.0 0.0% 0.0 8.0%
(Sales Volume (000s)
Sales Volume (000s)
Sales Volume and Cap Rate Trend SA L ES VO LU M E A N D C A P R AT E T R E N D - H A M P TO N ROA D S Hampton Roads
2005 2006 20072008200 2007 2008 2009 2010201120122013201 2010 2011 2012 2013 2014 2015201 2015 2016 2017 2017 2005200 Volume Volume
Cap Rates ist. Avg Volume
a
Hist Avg. Volume
ou ce Co ta
ou
ates Decem e
N OTA B L E 2017 T R A N SAC T I O N S Property Name
# Units
Built
Location
Price
$/Unit
Sale Date Buyer
Reections at Virginia Beach
480
1987
Virginia Beach
$60,750,000
$126,563
Dec-17
The Breeden Company
Banyan Grove
288
2003
Virginia Beach
$46,000,000
$159,722
Aug-17
Bentall Kennedy/Croatan
Sterling Manor
207
2008
Williamsburg
$33,600,000
$162,319
Aug-17
Chaucer Creek Capital
Steeplechase Apartments
220
1986
James City County
$30,000,000
$136,364
Aug-17
Somerset Apartment Mgmt.
Cove Point at the Landings
122
2015
Norfolk
$24,350,000
$199,590
Aug-17
Bonaventure Realty Group
The Reserves at Arboretum
143
2009
Newport News
$21,900,000
$153,147
Sep-17
Lakeside Capital Advisors
Heather Lake
252
1971
Hampton
$21,400,000
$84,921
Dec-17
Artcraft Management
The Courts at Yorkshire Downs
202
1987
York County
$19,655,200
$97,303
Nov-17
Harbor Group International
Legacy Farms at Tech Center
156
1969
Newport News
$19,200,000
$123,077
Oct-17
K2 Real Estate Partners
Luna Pointe Apartments
210
1986
Hampton
$18,000,000
$85,714
Jul-17
Croatan Investments
2
M U LT I FA M I LY F U N DA M E N TA L S - T R E N D BY Q UA RT E R - N O R F O L K
Multifamily Fundamentals - Trend by Quarter - Norfolk .00 6.00%
94.50% .50 94.00% .00
5.00 5.00%
93.50% 3.50
4.00% .00
93.00% 3.00 92.50% 2.50
3.00% 3.00
92.00% 2.00
2.00% 2.00
91.50% 1.50 91.00% 1.00
1.00% 1.00
90.50% 0.50
0.00% 0.00
ccu Occupancy anc
Avg. Occ istHist Avg. cc
Effective Growth ec Rent ve Growth ent ro t Hist Avg. Eff Rent ist Avg.
is shaping up to be a remar ably average year for multifamily in ampton Roads. Much li e despite ob population and income gro th gures that lag .S. averages the mar et s broad existing renter pool should enable it to absorb the uptic in ne supply hile simultaneously generating e ective rent gro th that is roughly in line ith the historical average for the mar et.
2017Q3
2017Q1
ent ro t
ou ce Co ta
espite underperforming the national average relative to several ey economic and demographic indicators the ampton Roads multifamily mar et as a hole as still able to increase occupancy and e ective rental rates in a year hen it as expected to be at to slightly do n. The eys to the short term success included a brief lull in ne supply and a disproportionately large renter population evidenced by a higher than average percentage of the ampton Roads population being in the vital renter cohort of to year olds. The latter is a positive byproduct of the heavy military presence in the area. onetheless average occupancy levels in ampton Roads continue to lag both the .S. average and the long term average for the mar et hile the e ective rental rate gro th is in line ith the national average but still belo the historical average.
-1.00% 1.00
2017 3
2017 1
3
2016Q3
1
2016Q1
201
2015Q3
201
2015Q1
2015 3
2015 1
2012014Q33
2012014Q11
2013 3 2013Q3
2013 2013Q11
2012 2012Q33
2012 2012Q11
2011 2011Q33
2011 2011Q11
2010 2010Q33
2010 2010Q11
2002009Q33
2002009Q11
2008 2008Q33
2008 2008Q11
2007Q33 2007
2007Q11 2007
2002006Q33
2002006Q11
2005Q33 2005
89.5% 8 .50
2005Q11 2005
90.00% 0.00
ou
Decem e
BECK ROOFING CORPORATION
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W
W
a sense that no particular timetable clearly de nes the current mar et cycle. There is a gro ing belief that e are experiencing more of a secular cycle style pattern versus the boom and bust cycles e have become accustomed to ith the S crises the dot com bust and the reat Recession of . The slo pace of gro th age stagnation lo or er productivity mar et discipline ith e uity and debt and supply and demand remaining in balance all continue to strengthen this outloo . o ever a lo unemployment rate a policy shi to ard Fed tightening high asset prices in real estate and stoc mar et highs or to counterbalance the so landing vie point.
begins the eighth year of the current real estate cycle ith many potential impacts on commercial real estate on the hori on. The passage of the ne tax la potential infrastructure legislation capital spending and a tight ob mar et could all have profound impacts. According to the Emerging Trends in Real Estate Report published by C and the rban and Institute most investors are not ready to proclaim that cyclical ris is no longer applicable but most have
ANN A
A
AN
N
W
,
N AN
V B
N
Annual real GDP growth 5.0% 4.5%
Annual total employment growth
4.5%
4.0% 3.5%
4.3%
4.0%
3.6%
3.5%
3.0%
2.7% 2.4%
2.5%
2.2% 1.9%
2.0% 1.5% 1.0%
0.7%
0.7%
0.7%
0.5% 0.0%
1975-1980 59 months
1980-1981 13 months
1982-1990 93 months
ote
ont s mont s of
1991-2001 121 months
o t
e c cle t ou
2001-2007 74 months
2009-September 2017 101 months
to ea as i enti e
ou ce U u eau of Economic Anal sis t e ational u eau of Economic Resea c
W ■ ■ ■ ■ ■
W
For RE usinesses set up as pass-throu h entities the deduction will oost a er ta -income. The li e- ind e chan e remains in place. For RE private e uity rms the holdin period o investments or carried interest is e tended rom one year to three years. The Bill caps the usiness deduction or de t interest payments at o earnin s e ore interest ta es depreciation and amorti ation EBITDA . Most orecasts show a asis point increase in economic rowth in .
The amount of available capital for U.S. real estate investment remains robust, but favors a more conservative distribution of risk among both equity and debt investors. With the rise in real estate asset valuations over the last several years, capitalization rates are expected to remain flat for the foreseeable future. Investors will continue to focus more on property cash flows A
to drive returns with less emphasis on speculative returns of capital through capitalization rate compression. Equity investors are showing more selectivity as rent recoveries have matured in many markets and property valuations have risen past previous peak levels. Note the decrease in sales velocity since 2015.
A
A
$600 Entity $500 Portfolio
US$ billion
$400
Individual
$300
$200
$100
$0 2001
ote
ont s
2002
2003
2004
2005
ase on in e en ent e o ts of
2006
2007
o e ties an
2008
o olios
Lenders remain reluctant to lend on speculative development and Loan-to-Value ratios are still averaging between 55% - 65% for most transactions. This phenomenon holds true even in strong sectors, such as multifamily, or favored regions in sections, such as the Southeastern U.S. With borrowers still seeking to
2009
2010
million an
2011
i e
2012
efo e
2013
RCA
2014
2015
2016
2017 1H
ou ce Real Ca ital Anal tics ima il ca tu e sales alue at million an a o e
maximize loan proceeds, there is an increased opportunity in the middle of the capital stack for mezzanine lenders and preferred equity. Low leverage, moderate assumption, and accurate risk pricing will continue to shape capital markets for years to come.
W The search for yield is driving investors to see better returns outside of primary mar ets here there is an ade uate ris return pro le. For many investors this means the continued trend of investing in the hour cities and robust secondary mar ets. Access to a talented labor pool is becoming more critical for companies hen choosing their locations. MSA s that o er a lo cost living high uality of life and amenities ill
continually attract the educated or force that rms are loo ing for as demographics continue to shi and the overall labor pool tightens. Results of the Best erforming Cities report by the Mil en Institute ran ed the top cities according to a fact based set of metrics such as ob creation age gains and technology developments to evaluate relative gro th of metropolitan areas. Virginia Beach orfol as ran ed out of .
W
TO P 25 B EST-P E R F O R M I N G L A R G E C I T I ES
RA
ACCO R D
O
DE
Metropolitan Statistical Area (MSA)/Metropolitan Division (MD) Provo-Orem, UT (MSA)
Raleigh, NC (MSA)
Dallas-Plano-Irving, TX (MD)
San Francisco-Redwood City-South San Francisco, CA (MD) Fort Collins, CO (MSA)
North Port-Sarasota-Bradenton, FL (MSA)
Orlando-Kissimmee-Sanford, FL (MSA) Nashville-Davidson-Murfreesboro-Franklin, TN (MSA)
Austin-Round Rock, TX (MSA)
Salt Lake City, UT (MSA)
San Jose-Sunnyvale-Santa Clara, CA (MSA)
West Palm Beach-Boca Raton-Delray Beach, FL (MD)
Charlotte-Concord-Gastonia, NC-SC (MSA)
Atlanta-Sandy Springs-Roswell, GA (MSA) Tampa-St. Petersburg-Clearwater, FL (MSA)
Oakland-Hayward-Berkeley, CA (MD)
2017 Rank
2016 Rank
Change
1
2
+1
2
6
+4
3
5
+2
4
4
Steady
5
8
+3
6
26
+20
7
9
+2
8
7
+1
9
3
-6
10
11
+1
11
1
-10
12
36
+24
13
12
-1
14
21
+7
15
33
+18
16
18
+2
Seattle-Bellevue-Everett, WA (MD)
17
10
-7
Naples-Immokalee-Marco Island, FL (MSA)
18
17
-1
19
24
+5
20
44
+24
21
28
+7
Charleston-North Charleston, SC (MSA)
22
16
-6
Denver-Aurora-Lakewood, CO (MSA)
23
13
-10
Portland-Vancouver-Hillsboro, OR-WA (MSA)
24
14
-10
25
30
+5
San Antonio-New Braunfels, TX (MSA) Riverside-San Bernardino-Ontario, CA (MSA) Fort Lauderdale-Pompano Beach-DeerďŹ eld Beach, FL (MD)
Fayetteville-Springdale-Rogers, AR-MO (MSA)
ou ce
il en nstitute
OFFICE: ■ The uilding in Norfolk 2 ,662 S sold for 5 ,000,000, or 1 . 6 per square foot. RETAIL: ■ reenbrier Square in hesapeake 26 ,102 S sold for , 00,000, or 1 . per square foot. ■ N Shopping enter and its outparcels totaling 0,250 S sold for 5.65 million to Wheeler EIT. MULTIFAMILY: ■ Latitudes partments in Virginia each sold for 55, 0,000, or 12 , 0 per unit.
INDUSTRIAL: ■ avalier istribution enter in hesapeake 125, 06 S sold for ,550,000, or 5 . per square foot. ■ are- -Lot purchased a manufacturing building, a distribution building, and ten developable acres on London ridge oad in Virginia each. The sale price was ,500,000.
HOSPITALITY: ■ Waterside arrio in Norfolk sold to Lingerfelt ommonwealth for an estimated 5 million, or 6, 20 per key.
ampton oads saw sustained economic growth in 201 and current trends in the market support another good year as real estate fundamentals continue to improve across the board. There is a possibility of be er than expected results if increases in defense spending and infrastructure spending materialize in 201 .
NORFOLK’S MOMENTUM CONTINUES IN 2018 TRANSPORTATION
OFFICE
INDUSTRIAL
RETAIL
MULTIFAMILY
INVESTMENT
MANUFACTURING
RESIDENTIAL
All this and more.
Contact: 999 Waterside Drive, Suite 2430 Norfolk, VA 23510 • 757-664-4338 NorfolkDevelopment.com
NorDev IB Market Review 1/2pg ad.indd 1
1/24/18 12:41 PM
MMonths O N T H S SSupply U P P LY OofF IInventory N V E N TO RY
Chief Operations OfďŹ cer, Rose & Womble Realty
5.5 5.5
11,000 10,000
5
9,000 ,000 8,000 8,000
4.5 .5
7,000 7,000 6,000 ,000
4
5,000 5,000
W
an Feb eb Mar ar AAprr May a Jun un Jul ul Aug e Octct Nov ec Jan Aug Jan Noc Dec Inventory
nventor
It as another good year for residential for sale real estate in mar ing the third straight year of gains. In ampton Roads overall closings ere up . follo ing substantial increases in and . Consumer con dence continued to gro than s to lo unemployment rising ages lo interest rates and signi cant e uity gains since the housing trough in . This con dence helped feed the move up mar et in ne construction hile resale continued to ll the gap for many rst time buyers. ricing po er remained good but at a slightly declining rate of gro th ith o gains in the median pricing of . . With little anticipation of signi cant shi s in the macro environment and fueled by demographic changes e foresee robust gro th but at a diminishing rate into . ast year e suggested that in response to rising prices especially ith ne construction detached pricing hi ng some high mar s in Chesapea e and Virginia Beach buyers ould continue to migrate south to the greater Moyoc mar et in search of a ordability. That seems to have occurred and the shi as exacerbated by Ryan omes entry into that submar et. While closings for ortheast orth Carolina ere only up . o that number ill signi cantly gro hen Ryan starts to close their sales. Average closed sales prices rose a phenomenal . o but remained ell over belo average closed sales prices in Chesapea e and Virginia Beach. Jan
Feb
Mar
Avg. 30 Year Fixed Rate Mortgage
4.20%
4.19%
Local Unemployment Rate
4.7% 5.1%
(Hpt Rds MSA)
National Unemployment Rate
8
Mos. Supply Mos. Supply
# Homes on Market # Homes onthe the Market
12,000
X
Mos. Supply
os. u l
Source REIN MLS ou ce RE
W
W
W
While the picture is bright for housing there are al ays potential limiters on the hori on. In continued declines in inventory put some real constraints on demand. Single family housing inventory at the start of as the lo est it had been in ten years. Months to absorb inventory hit a lo of . months at the end of ecember. e construction ill bear much of the burden of solving this imbalance. o ever land is scarce and expensive eeping up ard pressure on pricing and limiting builder s abilities to serve the rst time buyer mar et. Rising median prices have already caused some shi s in buying habits as attached ne construction closings ere up . o hile detached closings fell by . . Interest rates sa some gains but stayed ell belo the . range that most economists had predicted e ould see by the end of . There seems to be the general consensus for rates to stabili e in in the . range. These rates should not have a signi cant impact on a ordability and hen combined ith an ongoing easing of under riting standards ill continue to help many rst time buyers ump onto the housing ladder.
Apr
May
Jun
Jul
Aug
Sept
Oct
Nov
Dec
4.10%
4.10%
4.02%
3.94%
3.96%
3.93%
3.78%
3.85%
3.94%
3.94%
4.5%
4.2%
4.0%
4.2%
4.4%
4.3%
4.3%
4.1%
4.0%
4.1%
n/a
4.9%
4.6%
4.1%
4.1%
4.5%
4.6%
4.5%
4.1%
3.9%
3.9%
3.9%
home sales under grabbed a . share on the Southside contrasted by ne construction hich only carried a . share in that same price band. On the eninsula the numbers ere . and . respectively. Rising prices seemed to be the catalyst for a slight shi to both resale hich grabbed . of the mar et for sales in and to attached product hich sa a . gain in mar et share o trends that may ell continue if inventory remains at such lo levels and prices continue to trend up in ne construction.
ains continued into in the resale mar et in ampton Roads ith closings revenue and median closed sales prices all rising o . Residential resale closings increased by . over to closings. Revenues gre by . to ith overall median prices up by . . etached homes carried . of all closings ith resale homes nding much traction ith rst time buyers. Resale detached
R ESA L E Sales SA L ES BY EA R A Nand D S ECSector TO R Resale byY Year 114000 000 12000 12000
12680
10000 10000
8000 8000
12003
up 4.5% with 996 more closings totaling 22,924 up 2.4%, a $2,075 increase to $197,075 up 5.5%, a $284.9 million increase to $5.42 billion
11046
000 6000
6149
000 4000
3527 3337 3203
2000 2000 00
SS Det et
4394
SS A Att 2015 2015
5463
Pen en Detet
1191 1113 880 Pen en ATT A
2012016 2017 2017 ou ce RE
W Builders en oyed up ard movement across almost all metrics in albeit at a slightly moderated pace from . There ere gains in the number of closings average sales price and revenue. As before the Southside mar et accounted for ust over
of all closings in ampton Roads. e construction s share of all residential closings lost some ground in ending ith a . share. Overall median closed home pricing too a slight dip of . o but this as driven primarily by the shi from detached to attached sales as attached sales ere up . o.
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
New Construction
3,318
2,775
2,421
2,354
2,714
2,911
2,360
3,072
3,214
3,247
Avg Sales Price
$483,874
$432,232
$368,752
$329,035
$268,269
$320,767
$333,402
Total Revenue (millions)
$1,605
$1,199
$893
$775
$728
$934
$787
$333,262 $342,983 $343,105 $1,023
W were up 1.0% with 33 more closings totaling 3,247 was down 1.9% to $310,831, marking a shift to attached product was up 1.06%, an increase of $11.7M to $1.114B
$1,102
$1,114
A M P TO N R OA S - B C I T City/County
Closings thru Q4
Median Sales Price thru Q4
2016 2017 % Change
2016
2017
Avg Sales Price thru Q4
% Change 2016
2017 % Change
Revenue thru Q4 2016
2017
% Change
CHES
994
978
-1.6%
355,000
368,051
3.7%
344,730 358,363
4.0%
342,661,440
350,479,023
2.3%
I of W
114
104
-8.8%
362,468
357,566
-1.4%
364,128 350,418 -3.8%
41,510,638
36,443,471
-12.2%
NORF
279
303
8.6
256,100
268,900
5.0%
303,672 296,953 -2.2%
84,724,478
89,976,816
6.2%
PORT
107
151
41.1%
217,900
225,000
3.3%
216,401 224,172
3.6%
23,154,921
33,849,963
46.2%
SUFF
286
399
39.5%
294,583
300,024
1.8%
312,988 306,315 -2.1%
89,514,503
122,219,717
36.5%
VBCH
644
504
-21.7%
344,847
356,000
3.2%
389,506 413,267
6.1%
250,841,991
208,286,369
-17.0%
Total Southside
2424 2439
0.6%
310,000
312,900
0.9%
343,403 344,918
0.4%
832,407,971
841,255,359
1.1%
GLOU
97
104
7.2%
299,830
276,957
-7.6%
294,806 282,544 -4.2%
28,596,185
29,384,595
2.8%
HAMP
144
148
2.8%
269,200
275,000
2.2%
276,751 293,451
6.0%
39,852,136
43,430,793
9.0%
JCC
323
331
2.5%
360,503
329,555
-8.6%
380,093 373,382 -1.8%
122,770,120
132,589,278
0.7%
NNEWS
107
64
-40.2%
332,381
326,155
-1.9%
335,740 329,499 -1.9%
35,924,145
21,087,964
-41.3%
WMSBG
37
31
-16.2%
286,167
281,990
-1.5%
296,182 300,990
1.6%
10,958,716
9,330,680
-14.9%
YORK/POQ
82
130
58.5%
358,776
319,650
-10.9% 388,281 353,705 -8.9%
31,839,061
45,981,685
44.4%
Total Peninsula
790
808
2.3%
326,682
308,388
-5.6%
341,697 337,630 -1.2%
269,940,363
272,804,995
1.1%
Hampton Roads
3214 3247
1.0%
317,001
310,831
-1.9%
342,983 343,105
1,102,348.334
1,114,060,354
1.1%
Again in the position by closings as held by Spence Crossing in Virginia Beach a ragas Cos. community ith closings a gain of almost o . Spence Crossing is comprised of four active neighborhoods o ering both attached and detached product. ragas has a solid
0.0
foothold in the rst time buyer mar et ith closed prices in the Fernhill neighborhood averaging in . Rounding out the Top subdivisions ere Culpepper anding Chesapea e ne comer White all ames City County Benn s rant IOW Cty. and ings ointe Chesapea e . Ran ing by revenues trac ed pretty closely ith closings but ominion Meado s Chesapea e grabbed the spot than s to their average closed sales price of .
TO P S B I I S I O N S -- A M P TO N ROA S Subdivision 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Closings Recorded
SPENCE CROSSING, V CULPEPPER LANDING, C WHITE HALL, J BENN’S GRANT, IOW KINGS POINTE AT WESTERN BRANCH, C REUNION, C THE VILLAGE AT CANDLESTATION, J DOMINION MEADOWS, C NEW PORT, P OCEAN VIEW, N EAGLE POINTE, C OLAH’S LANDING, C NEW TOWN, J THE RESERVE AT WILLIAMSBURG, J NORFOLK HIGHLANDS, C
0
160 74 68 66 63 53 52 51 50 49 49 42 41 38 36
Average Price # Bldrs
Subdivision
Total Revenue # Bldrs
$275,948 $374,296 $314,836 $331,939 $194,213 $228,463 $312,024 $402,525 $232,505 $304,946 $345,103 $470,319 $344,738 $281,452 $270,705
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
$44,151,670 $27,697,897 $21,907,968 $21,408,860 $20,528,788 $19,753,383 $17,228,868 $16,910,056 $16,225,239 $15,561,342 $14,942,335 $14,541,539 $14,134,266 $13,811,045 $12,800,384
1 3 1 1 1 1 1 1 1 11 1 2 2 1 9
SPENCE CROSSING, V CULPEPPER LANDING, C BENN’S GRANT, IOW WHITE HALL, J DOMINION MEADOWS, C OLAH’S LANDING, C NORTH END, V EAGLE POINTE, C THE VILLAGE AT CANDLESTATION, J LIBERTY RIDGE, J OCEAN VIEW, N FIELDSTONE, C NEW TOWN, J HANBURY WOODS, C RIVERVIEW AT THE PRESERVE, C
1 3 1 1 1 2 10 1 1 1 11 4 2 4 1
Furniture For Everywhere You Work Ryan omes continued their dominance of the ampton Roads mar et boo ing closings ith in revenues more than Chesapea e omes by unit count and more by revenue. Ryan omes is a por olio builder ho counted closings from thirty seven active communities. Moreover these numbers do not include their entree into the E orth Carolina mar et hose closings ere not trac ed in . Chesapea e omes umped into the spot. i e Ryan omes they have some nice regional balance ith . of their closings coming from the eninsula. Moreover they sho ed some great strength at their ortsmouth community e ort ith y closings there. ragas Companies as the builder by closings and revenue. Moreover hat is even more impressive is that the ragas Cos. operates only on the Southside. These closings came from their closeout of adley ar as ell as from ings oint and Spence Crossing. Rounding out the Top Five builders ere unt omes and Eagle Construction. The Top builders accounted for . of all closings in ampton Roads. It is signi cant to note that the in ll spot lot builders continue to have a considerable mar et share in aggregate. A er you leave the top t enty builders builders contributed another closings for an average of . closings builder and a among this group are E C omes Wetherington omes and SF evelopment.
757.962.9810 | ibiva.com
.
share of the mar et. otable
The mar et continues to gro albeit at a some hat slo er pace. o ever the outloo is positive for at least t o more years of solid ne construction performance TO P B I L E RS -- A M P TO N R OA S Builder 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
RYAN HOMES CHESAPEAKE HOMES DRAGAS COS HH HUNT HOMES EAGLE CONSTRUCTION EDC HOMES HEARNDON CONST NAPOLITANO HOMES TERRY PETERSON RES WETHERINGTON HOMES CORINTH RES BISHARD HOMES DSF DEVELOPMENT PLATINUM HOMES HAV INC
Closings Recorded 610 256 227 142 84 78 77 76 75 73 47 46 35 34 34
Average Price # Sites
Builder
Total Revenue # Sites
$358,086 $295,787 $252,428 $323,802 $386,365 $310,452 $372,898 $419,199 $289,696 $269,529 $256,495 $480,573 $303,297 $526,483 $419,338
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
$218,432,164 $75,721,538 $57,301,169 $45,979,916 $32,454,681 $31,859,144 $28,713,167 $24,215,222 $22,106,369 $21,727,237 $19,675,625 $17,900,418 $16,636,576 $14,257,497 $13,039,687
37 10 3 8 4 34 3 6 4 25 2 15 9 6 3
RYAN HOMES CHESAPEAKE HOMES DRAGAS COS HH HUNT HOMES EAGLE CONSTRUCTION NAPOLITANO HOMES HEARNDON CONST EDC HOMES BISHARD HOMES TERRY PETERSON RES WETHERINGTON HOMES PLATINUM HOMES STEPHEN ALEXANDER HOMES HAV INC ASHDON BUILDERS
37 10 3 8 4 6 3 34 15 4 25 6 9 3 6
1
S NT M NT Assistant Director, Director, E.V. Williams Center for Real Estate, Strome College of Business
W
The E.V. Williams Center for Real Estate created the am ton Roa s Real Estate a ets entiment u e in fall . This survey conducted annually via email intends to gather a greater understanding of the ampton Roads real estate community s a tude to ards the current and the future real estate mar et sectors. The Sentiment Survey collected in anuary had respondents. Survey uestions and re uested information on respondents and their ampton Roads real estate mar et activities.
Please identify your primary Hampton Roads real estate activity (select one).
Real Estate Estate Activity Real Activity
A
A
N
A
A
A
A
V
2018
Primary Hampton Roads Real Estate Activity: Spring 2018 n 117 n = 117 Professional - property management Professional - property management Professional - law Professional - law Professional - consultant Professional - consultant - civil engineer Professional - Professional civil engineer Professional - broker/sales Professional - broker/sales Professional - architect Professional - architect Professional - appraiser Professional - appraiser Professional - accountant Professional - accountant Lending Lending Investing Investing Governing Governing Entrepreneurial Entrepreneurial (Developing)(Developing) Consumer - homeowner Consumer - homeowner or renteror renter Consumer - commercial Consumer - commercial propertyproperty None Noneof ofthe theabove. above. Please Please explain explainbelow. below. 0%
5% 5%
10% 10%
15% 15%
20% 20%
25%
30% 30%
Percentage of Participants Percentage or Participants
(select one).
Hampton Roads Real Estate Markets
Please identify your primary real estate market affiliation
Hampton Roads Real Estate Markets
A
OfďŹ ce Industrial Retail
A
A
A
N 2018
n Market 117Affiliation: Spring 2018 Primary n= 117
Office Industrial Retail
Multi-family residential Multi-family residential Single-family residential Single-family residential
Land
Land 0% 0%
5% 5%
10% 10%
15% 15%
20% 20%
Percentage of Participants Percentage of Participants
2
25% 25%
30% 30%
uestions and sho high levels of sentiment all sectors above neutral and three of seven sectors above mild positive for all ampton Roads real estate mar et segments. Respondents sho the most positivity for the industrial real estate mar et segment follo ed by the residential sectors. Six month pro ections sho a decrease in multi family residential sentiment and sentiment increases to industrial office and retail. Respondents may be indicating a rotation from high levels of sentiment in multi family residential to these other sectors. Retail had the lo est sentiment level but is expected to increase over the next six months.
Hampton Roads Real Estate Markets
Please rate current and anticipated month sentiment levels or the ollowin Hampton Roads real estate mar et se ments.
Hampton Roads Real Estate Markets
AV
A
NAverage N Sentiment - Present N ANand
N
N 2018
Month Pro ection: Spring 2018 n = 117
Office
Office
Industrial
Industrial
Retail
■ 6 Month Sentiment
Retail
Current Sentiment ■Month CurrentSentiment
Multi-family residential Multi-family residential
Sentiment
Single-familyresidential residential Single-family Land
Land
11 Negative
22 3 Mild-Negative Neutral Sentiment Level Sentiment Level
4 Mild-Positive
55 Positive
Respondents suggested that the industrial real estate sector has the best investment potential loo ing for ard. Interestingly results sho a signi cant decrease in the perceived investment potential of the ampton Roads multi family residential sector even though responses in and sho ed that this sector had the best investment potential. Single family residential also had a signi cant decrease from recent prior years.
select one
Real Estate Market Segments
Over the ne t months which Hampton Roads real estate property sector has the est investment potential
Hampton Roads Market Segments
B Office Industrial Retail
A
N
A
N Investment N APotential N - Next est NV Hampton Roads 2018201 Spring 2017 Spring 201 2018,Spring 2017,
N Months:
Office Industrial Retail
■ 2018 ■ 2017
Multi-family residential Multi-family residential
■ 2016
Single-familyresidential residential Single-family
Land No Opinion
Land No Opinion
0% 0%
5% 5%
10% 10%
15% 15%
20% 20%
25% 25%
30% 30%
Percentage of Participants Percentage of Participants
35% 35%
40% 0%
45% 5%
ositive ne s is re ected in responses to uestion as more people intend to expand their real estate space usages rather than contract or reduce their space usage. o ever retail is the one exception to this general nding.
e would li e to understand your anticipated real estate usa e over the ne t months. Please indicate i you plan to e pand or contract your use or ownership o space
Hampton Roads Real Estate Markets Hampton Roads Real Estate Markets
AN Office Industrial Retail
A
A
Anticipated A AReal Estate AN sage Changes N n= 117
Months: 2018 N Spring 2018
Office
Industrial
■ No Change
Retail
■ Contract ■ Expand
Multi-family residential Multi-family residential Single-family Single-familyresidential residential
Land
Land
please answer each row .
0%0%
5% 5%
10% 10%
15% 15%
20% 20%
25% 25%
30% 30%
35% 35%
0% 40%
5% 45%
50% 50%
Percentage Participants Percentage ofofParticipants
select one .
Expected Change
Over the ne t months what is your e pectation or the chan e in eneral mort a e interest rates
Expected Change
AN
N
A
N
A
N
Expected Changes in Mortgage Interest Rates - Next 2018, 2017, 201 Spring 2018 Spring 2017 Spring 201 n = 117
Month:
N
Increasing Increasing
■ 2018
No Change
No Change
■ 2017 ■ 2016
Decreasing
Decreasing 0%
0%
10%
10%
20%
20%
30%
30%
0%
50%
0%
70%
40% 50% 60% 70% Percentage of Participants Percentage of Participants
80%
80%
0%
90%
100%
100%
Although ampton Roads communities have begun planning for the impending e ects of sea level rise most survey respondents indicate that sea level rise currently has generally moderate to no impact on their ampton Roads real estate interests.
A
V
N
NA
A
A
N
Impact of Sea-level Rise on Personal Real Estate Interest: 2018,Spring 2017, 201 2018 Spring 2017 Spring 201
Severe Impact
Level of Impact
Severe Impact
Level of Impact
Please choose the statement elow that est re lects the impact o sea-level rise on your Hampton Roads real estate interests select one .
A
ModerateImpact Impact Moderate
■ 2018 ■ 2017
Minimal Impact Minimal Impact
■ 2016
No Impact No Impact 0%
0%
5%
5%
10%
10%
15% 20% 25% 30% 15% 20% 25% 30% Percentage of Participants Percentage of Participants
an you albrid e Pro erty Ad isors or s onsorin t e 201 eal state Mar ets Sentiment Sur ey
If you ould li e to participate in this survey please contact E.V. Williams Center for Real Estate irector Andy ans at hans odu.edu.
35%
35%
0% 40%
5% 45%
am ton oads
MORE THAN A MAIN STREET Creative Districts 1 Economy 8 Business
CULTURALLY COOL International Companies
20
2000+ int’l scientists conduct research at Jefferson Lab National Accelerator Facility NEW BLUE COLLAR In the past 6 years,4800 advanced manufacturing jobs announced DIVERSE NIGHTLIFE & RECREATION
ENTREPRENEURSHIP HUB Tech Center Research Park $ kick-starts your start-up
OVER 180K STRONG
YOUR CITY | OUR CITY | ONE CITY
We want to start a personal partnership with your business FIND OUT MORE: (757) 926 -8428 | N E W P O R T N E W SVA . C O M
50
81
66 340
250 220
64
29
How can you be in two states at the same time? 301
95
Think Currituck! 64
Newport News Hampton
AN CE ATL ANTIC O
Currituck County, North Carolina is actually part of Hampton Roads, Virginia’s Metropolitan Statistical Area. So when you expand your business here, 85 221 220 you’ll get all the benefits of the economically95robust, infrastructure - rich Southeastern Virginia corridor, 58 plus extra advantages—including the lowest tax rate (.48 per $100 valuation) of all the Hampton 220 Roads localities, and workforce incentives—offered 52 only in North Carolina. It’s the best of both worlds; 85 95 like being in two states at once. And that is one 40 great state for your business to be in.
Norfolk Virginia Beach 58 Suffolk Chesapeake 64
17
168
Currituck County
13
17 64
264
85
220
74
17 Download your free 2018 Hampton Roads 40 Business Resource Guide: www.thinkcurrituck.com/hrbizguide
Larry J. Lombardi, Director 252-232- 6015 | M: 301-237-8951 Larry.Lombardi@CurrituckCountyNC.gov 153 Courthouse Road, Currituck, North Carolina 27929
ThinkCurrituck.com
M SS ON of the
.V. Williams enter for eal state
The E.V. Williams Center for Real Estate strives to connect those engaged or interested in real estate and economic development to the research curriculum and students at Old ominion niversity O . Through programming research initiatives and publications the Center partners ith its members O alumni and business leaders to educate the community and provide O students ith enrichment experiences that facilitate their professional development. For membership or programming in uiries please contact Andy ans
hans
odu.edu or atalie
Boehm nmcgaugh odu.edu .
E. V. WILLIAMS CENTER FOR REAL ESTATE odu.edu/creed