RICHMOND-It is a still a tenant's market in Richmond, with concessions reflecting that immutable fact of life here. Jones Lang LaSalle's VP in the local office, Scott P. Harrison, tells GlobeSt.com that in the southwest quadrant in particular "we are seeing higher TI allowances as well as abnormal free rent to attract or even retain tenants."
By abnormal free rent, he means instead of the usual one month per year of the lease term, tenants are securing six to nine months of free rent for five to seven year deals.
TI allowances range from turnkey--that is, the landlord does whatever the tenant wants--to anywhere from $3 to $5 per square foot per year of the lease term.
There is also a flight to quality underway in the market that is having a ripple effect. "That has been going on for a few years," Harrison says.
Demand for Class A space in the Richmond market is outpacing demand for all other inventory, JLL says, with class A vacancy now 11.4% after reaching a high of 18.3% in the fourth quarter of 2009. As this flight to quality has ensued, vacancy in Class B inventory has begun to climb.
"Class B office properties throughout the metro Richmond area need to engage the renewal and retention process as soon as possible when leases approach expiration, given the competition from the Class A market," Harrison advises.
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