M A R K E T B E AT

Fredericksburg, VA
Industrial Q1 2024

ECONOMY: Population Growth

YoY 12-Mo.
Chg Forecast The Fredericksburg region, particularly Stafford County, benefits from continued demand for Defense Department contractors
near Quantico Marine Corps Base. Regional unemployment decreased 20 basis points (bps) year-over-year (YOY) to 3.2% in
5.1% the first quarter of 2024 and remains well below the national rate of 3.8%. Regional employment numbers are up 2.6% YOY
Vacancy Rate and are expected to continue to grow in the coming quarters. Population is projected to rise 20% by 2030, and
Fredericksburg has been the fastest growing region statewide for five consecutive years. The Fredericksburg region is set to
-83K join Virginia’s fast-growing data center market. Data centers development activity continues to dominate the headlines as
Amazon continues to expand its footprint, planning two facilities in Stafford County that represent a $2 billion investment and
Net Absorption, SF
potential tax revenue of more than $100 million annually. Business Facilities awarded the Virginia Economic Development
$9.53 Partnership with a 2023 award for Amazon Web Services’ $35 billion commitment to the state.
Asking Rent, PSF
SUPPLY and DEMAND: Vacancy Rates Rising
Overall, Net Asking Rent Industrial market demand remains strong, and vacancy rates remain tight even as it has climbed from the historic lows hit in
early 2023. Overall vacancy has risen by 40 bps since the last quarter and is up 360 bps YOY. Construction began on a
46,800-square-foot (sf) warehouse facility located at 45 Centreport in Stafford County that is set to deliver in Q2 2024.
ECONOMIC INDICATORS
Construction continued on two facilities: Carmel Church Business Center in Caroline County (323,475 sf) and Crossroads
Q1 2024
Industrial in Stafford County (219,456 sf). The two properties are anticipated to deliver in April 2024 and July 2024,
YoY 12-Mo. respectively. There were no deliveries this quarter.
Chg Forecast
70.3K PRICING: Rents Decrease
Fredericksburg Overall industrial asking rents ended the first quarter at $9.53 per square foot (psf), a drop of 6.1% quarter-over-quarter
Employment
(QOQ), with limited options in the current inventory. Warehouse rental rates ended the quarter at an average of $9.50 psf, a
slight decrease of 1.9% QOQ. Office service/flex commanded the highest rates this quarter. Manufacturing rates were not
3.2% available at the time of this report. Sales activity remained steadfast with total deal volume over $6.8 million. Most notably, 10
Fredericksburg Harkness Boulevard, a 53,500-sf warehouse, sold to an owner for $3.9 million ($72.90 psf).
Unemployment Rate

3.8% SPACE DEMAND / DELIVERIES OVERALL VACANCY & ASKING RENT

U.S. $12 7%
Unemployment Rate 2,200
6%
$10
1,700 5%
$8
Source: BLS, Moody’s Analytics 4%
1,200
Thousands

$6
3%
700 $4
2%
$2 1%
200
$0 0%
-300 2019 2020 2021 2022 2023 2024
2020 2021 2022 2023 2024

Net Absorption, SF Construction Completions, SF Asking Rent, $ PSF Vacancy Rate

M A R K E T B E AT

Fredericksburg, VA
Industrial Q1 2024
MARKET STATISTICS

YTD NET
YTD LEASING OVERALL AVAILABLE OVERALL VACANCY OVERALL WEIGHTED OVERALL WEIGHTED OVERALL WEIGHTED
SUBMARKET TOTAL BLDGS INVENTORY OVERALL UNDER CNSTR
ACTIVITY VACANT SPACE (SF) RATE AVG. NET RENT (MF) AVG. NET RENT (OS) AVG. NET RENT (W/D)
ABSORPTION

Caroline County 18 2,761,926 - - -% - 325,500 N/A N/A N/A

Fredericksburg City 39 1,394,503 - - -% 42,230 0 N/A N/A $7.50

King George County 14 541,409 - - -% 11,000 0 N/A N/A $26.76

Spotsylvania County 143 7,401,366 20,639 286,007 3.9% -96,767 0 N/A $12.00 $9.62

Stafford County 128 6,541,248 - 667,858 10.2% -39,774 266,256 N/A N/A $10.49

FREDERICKSBURG TOTALS 342 18,640,452 20,639 953,865 5.1% -83,311 591,756 N/A $12.00 $9.50

Rental rates reflect weighted net asking $psf/year. MF = Manufacturing OS = Office Service/Flex W/D = Warehouse/Distribution

YTD NET
YTD LEASING OVERALL AVAILABLE OVERALL WEIGHTED OVERALL WEIGHTED OVERALL WEIGHTED
PROPERTY TYPE TOTAL BLDGS INVENTORY OVERALL VACANCY RATE OVERALL UNDER CNSTR
ACTIVITY VACANT SPACE (SF) AVG. NET RENT (MF) AVG. NET RENT (OS) AVG. NET RENT (W/D)
ABSORPTION
Warehouse/Distribution 303 16,661,127 8,600 951,065 5.7% -84,501 591,756 N/A N/A $10.15
Manufacturing 19 1,561,896 4,700 0 0.0% 1,750 0 N/A N/A N/A
Office Service/Flex 20 417,429 12,039 2,800 0.7% -560 0 N/A $12.00 N/A

KEY LEASE TRANSACTIONS Q1 2024

PROPERTY SUBMARKET TENANT SF TYPE

11905 Bowman Drive Spotsylvania County All American Life League 8,399 Renewal

230 Industrial Drive Spotsylvania County Be Ready 3,000 New

230 Industrial Drive Spotsylvania County JRM Technologies 2,800 New

KEY SALE TRANSACTIONS Q1 2024

PROPERTY SUBMARKET SELLER / BUYER SF PRICE / $PSF

10 Harkness Boulevard – Battlefield Industrial Park Stafford County Dominion Real Estate, LLC / 10 Harkness Blvd. Realty, LLC 53,500 $3.9M / $72.90

10857 House Drive Spotsylvania County Christopher D. Johnson / Sola Salons 14,542 $2.8M / $189.80

5446 Rosedale Drive King George County John S. Cornette / Keith H. Thomas 3,989 $170K / $42.62
M A R K E T B E AT

Fredericksburg, VA
Industrial Q1 2024
INDUSTRIAL SUBMARKETS

VIRGIL NELSON, CCIM

Senior Vice President
Tel: +1 540 322 4150
[email protected]

WILSON GREENLAW, JR., CCIM, SIOR

Vice President
Tel: +1 540 322 4156
[email protected]

A CUSHMAN & WAKEFIELD

RESEARCH PUBLICATION
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