The elevated multifamily supply environment after the pandemic has put pressure on many Sun Belt markets, including Richmond, Virginia. But now that's starting to change, with occupancy on pace for continued recovery as deliveries dwindle, according to a market report from Colliers.
In 2023, multifamily completions were as high as 3,929 in Richmond at the end of 2023, resulting in occupancy dropping from 97.1 percent seen in 2021 to the mid-94 percent range in both 2023 and 2024. Luckily for landlords, new supply continues to drop, with just 2,100 and 2,700 units in deliveries anticipated through 2027 and 2028.
"Richmond is positioned to see continued occupancy gains and improving rent growth as supply pressure recedes," Colliers forecasted.
The trend appears to be sending a positive message to investors. So far, in just the first quarter, investment sales reached $227.80 million. That comes after the annual volume peaked at $1.1 billion in 2022 and bottomed around $310 million two years later, as interest rates spiked.
"Early 2025 and 2026 activity suggests renewed interest as capital begins to re-engage with fundamentally sound, affordably priced markets," Colliers said.
"Richmond continues to attract a growing share of institutional and private equity attention as a value-oriented alternative to larger Mid-Atlantic metros."
While Colliers did not provide a forecast for rent growth, the trend was similar to occupancy and sales over the past several years. After seeing 10.7 percent and 10.3 percent gains in 2021 and 2022, it trailed off to between 1.6 percent and 2.1 percent between 2023 and 2025. Landlords have been forced to offer more concessions — but not as deep as seen in other Sun Belt markets.
Overall, the CRE brokerage dubs Richmond as one of "one of the Mid-Atlantic's most attractive multifamily markets" thanks to its strong economic fundamentals and growing population.
The most active buyers in the market over the past year include Foxfield, New York Life, Seminole Trail, American Landmark and Levco.
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