COMMERCIAL REAL ESTATE

IMPACT
REPORT
2024 IN REVIEW

VIEW
THALHIMER’S
EXCLUSIVE
MARKET
SURVEY
RESULTS
 2024 IN REVIEW

CRE IMPACT
REPORT
2024 was another active year in our Virginia Virginia’s commitment to launch a $90 million
markets with a flurry of expansion and biotech and pharmaceutical manufacturing
construction activity ranging from data center network together with the University of Virginia,
development to life sciences. Virginia reclaimed Virginia Tech, and Virginia Commonwealth
the top spot as CNBC’s best state for business, University has expanded the life sciences buzz
its third win in the last five years, and received in Charlottesville. UVA broke ground on a
high marks for education and infrastructure, new biotechnology institute, expected to be a
ranking first and third respectively in CNBC’s list. regional hub for research, development, and
Fredericksburg manufacturing, and Afton Scientific is planning
The Port of Virginia continued to make headlines a significant expansion to its Albemarle facility
Charlottesville in the Hampton Roads region, becoming the first which will bring hundreds of new jobs.
East Coast port powered by 100% clean energy.
The Port’s expanding shipping channel is now Manufacturing was the focus in southwest
Lynchburg open, allowing two-way passage for ultra-large Virginia, where the Roanoke region led the state
Richmond container vessels and reducing port stays by up in sector job growth since 2019. The Danville
Roanoke Newport News to 15%. Virginia Beach topped Gusto’s list of the region and Pittsylvania County specifically have
fastest growing cities for new hire salaries, and seen an influx of manufacturing investments
Virginia Beach the region continues to be recognized among the drawn to the area in part because of the Southern
best places to live on the East Coast. Virginia Megasite at Berry Hill, the largest
industrial site in the state and one of the largest in
Richmond market construction activity the southeastern U.S.
dominated the headlines with deliveries and starts
in a variety of product lines. The Henrico Sports &
Events Center opened to a packed calendar with
annual economic activity expected to top $33
million. VCU broke ground on the first phase of EXCLUSIVE
its Athletic Village, and CoStar’s new downtown
office tower is well underway. The region
2024 MARKET SURVEY
continues to dominate rankings for both business This year’s edition includes a snapshot of
and lifestyle, and plans for a new passenger line the results from our commercial real estate
to Raleigh will continue to expand access. market survey, which was sent to targeted
occupiers, owners, and influencers to get
In Fredericksburg, the data center development their perspective on current market trends
boom is in high gear, with more the $443 million and challenges. Our recipient list included
worth of land sites sold since the start of 2023. a mix of industry types and market
The industrial market is feeling the impact as locations and included both current and
viable sites and buildings are increasingly shifting prospective clients.
to data center uses. The decreased supply has
pushed industrial rates up more than 58% since
the start of 2020.

2 CUSHMAN & WAKEFIELD | THALHIMER Cushman & Wakefield | Thalhimer Offices CRE IMPACT REPORT | 2024 IN REVIEW 3
HAMPTON ROADS

PORT LOGISTICS “ THALHIMER’S TAKE

“As we head into the new year, uncertainty hangs over union labor negotiations and
potential tariffs at the Port of Virginia. However, the outlook remains positive in 2025
and beyond as the Port maintains its competitive advantage in efficiency through

LEAD
several recent infrastructure investment projects completed. We expect the Port to be
a big winner coming out of a new labor agreement being reached, regardless of tariffs,
as the flow of goods rebalances between West and East coast ports.”
Geoff Poston, SIOR | Senior Vice President, Managing Broker

The Port of Virginia lies at the heart of the Dominion Energy’s $9.8 billion offshore wind “Office vacancy in the overall Hampton Roads market continues to remain in the single
region’s logistics ecosystem. Substantial farm is well underway, and beyond the direct digits, outpacing competitive office markets around the Southeast despite another year
investments both to port facilities and regional impact of the project, the region is expected of light absorption. Asking rents also continued to rise in response to increased tenant
infrastructure have kept the region in high to benefit from the development of industry- improvement costs and costlier medical product becoming a larger percentage of
demand. The Port received significant federal specific knowledge that will equate to more overall inventory. A lack of supply side pressure is the biggest factor in market health;
funding to support its sustainability efforts jobs statewide as well as increased economic will 2025 lead to stronger fundamentals where there is a potential environment for
as it aims to become the first net-zero port output. Dominion’s other major wind project quality speculative Class A office development?”
on the East Coast and carbon-neutral by off the coast of North Carolina will deliver an Rob Wright | Senior Vice President
2040. The Virginia Port Authority completed estimated $4.8 billion in economic impact
the $83 million railyard expansion at Norfolk to Virginia statewide, including $1.2 billion in
International Terminals this year, another piece Virginia Beach specifically, along with 9,500
in the Port’s multiyear plan to build the world’s jobs in the Hampton Roads region.
most modern gateway. Portsmouth will be
home to 170-foot-tall gantry cranes, the largest
in operation at a U.S. commercial port.

$8B $4.8B $680M

Non-Military Maritime Kitty Hawk Wind Project LS Greenlink Submarine
Industry State & Local Taxes Economic Impact Cable Manufacturing Facility
(FY 2022) Planned

$520M $380M #1
Norfolk Naval Federal Funding to Port of Rail Volume in an
Shipyard Contracts Virginia for Sustainability East Coast Port

4 CUSHMAN & WAKEFIELD | THALHIMER CRE IMPACT REPORT | 2024 IN REVIEW 5

RICHMOND

REDEVELOPMENT
FOCUS
Richmond continues to top rankings for its Data center development is also on the rise in
regional lifestyle, business environment, and the Richmond region as interest continues to
higher education. The area is also rapidly press south along the Interstate 95 corridor
becoming a tourist draw as more sports and from the saturated Northern Virginia market.
events facilities open. Henrico’s Sports & Events Amazon Web Services announced plans for a
Center opened to a full slate of tournaments 3.8 MSF data center campus in Louisa County
and conferences and is expected to build on in addition to 1.7 MSF planned in the nearby
the county’s tourist and visitor spending that Lake Anna Tech Campus for a combined
hit a record high of $1.9 billion in 2023. Virginia investment of $11 billion by 2040. QTS
Commonwealth University (VCU) ranked #69 continues to expand its White Oak Technology

“
among top public schools and #136 among Park campus with additional acquisitions,
national universities in the latest report from and multiple additional developments are in
US News & World Report. VCU continues to the planning stages throughout the region. In
expand its regional footprint and broke ground downtown Richmond, CoStar’s 750,000 SF
on the first phase of its sprawling Athletic downtown campus is scheduled for completion
Village which will cover more than 42 acres. in 2026 and will include a 21-story tower with
THALHIMER’S TAKE
Site work is underway for the new 10,000-seat LEED Platinum certification.
baseball stadium recently unveiled as CarMax “The Richmond region continues to see consistent demand and growth from new
Park, the central component of the $2.4 billion industrial and data center developers as well as institutional investors. Compared to other
Diamond District redevelopment that will cities throughout the mid-Atlantic and southeast, we have extremely positive market
ultimately include a mix of retail, multifamily, conditions, which we expect to continue – and even improve – for the foreseeable future.”
and trophy office product. Graham Stoneburner | Senior Vice President

“The Richmond retail market closed out 2024 with record low vacancy, significant jumps

$11B $2.7B $2.1B

in rental rates, and increased demand for space resulting in several new development
projects on the horizon. With all of these factors in play, retailers continue to find
Richmond an extremely attractive market.”
Amazon Web Services Proposed Powhatan Henrico Construction- Jim Ashby | Senior Vice President
Investment in Data Center Related Activity
Louisa County (FY 2023-2024)

“As the ‘return to office’ conversation has continued, day-to-day office use increased
in 2024 alongside occupancy rates throughout the Richmond market. While we have
yet to see dramatic shifts, leasing activity is improving, and we expect this trend to
#1 #1 #6 continue in 2025. The flight to quality remains top of mind for office occupiers and, as
the Richmond market’s highest quality product dwindles, there’s more discussion about
Most Climate-Resilient America’s Best Top Metro by new construction filling the void. New incentive programs for 2025 will help motivate
U.S. City Town to Visit Projects per Capita landlords of existing buildings to renovate and elevate their properties.”
- USA Today - CNN Travel - Site Selection Amy Broderick | Senior Vice President

6 CUSHMAN & WAKEFIELD | THALHIMER CRE IMPACT REPORT | 2024 IN REVIEW 7

FREDERICKSBURG

BIG DATA BOOM “ THALHIMER’S TAKE

“Fredericksburg has been firmly established as the new home for data center
development with nearly 100 million square feet and billions of investment dollars
planned in the coming years. We have clients who are selling generational land holdings
on one side and clients who are buying these large tracts for data center campuses on
Data center demand has remained a focus for a fraction of that as the region has become the other. Both groups stand to capitalize on the elevated market demand.”
the Fredericksburg region, as developers look a draw for a multitude of developers and Jamie Scully | Senior Vice President
to capitalize on sites with the same access and users. Culpeper’s move has attracted projects
infrastructure as Northern Virginia. Amazon from multiple developers looking to expand
Web Services has invested more than $35 their Virginia footprints, including EdgeCore,
billion in Virginia since 2006, and the company’s DataBank, Peterson Cos., Cielo Digital
current projects across Stafford, Spotsylvania, Infrastructure, CloudHQ, and Copper Ridge.
King George, and Culpeper Counties stand to In a similar move, Fredericksburg’s Economic “The land grab for data development in and around greater Fredericksburg is at full
add an additional $53 billion to that total. Development Authority will fund a feasibility crescendo as companies continue to tie up land and get in line for water and power.”
study on city-owned land to determine whether Wilson Greenlaw, CCIM, SIOR | First Vice President
Anticipating the demand, Culpeper County the infrastructure will support data center
strategically consolidated development sites to development.
the Culpeper Technology Zone, a 950-acre park
with large tracts of developable land that offer
instant access to fiber, electricity, incentives,
and workforce training. More than 11.8 MSF of
data center space is planned in Culpeper alone,
and Amazon Web Services represents only

$151B+ $53B+ $2B

Planned Data Center Amazon Web Services Amazon Web Services Plans
Investment Planned Investment for 2 Data Centers
in Stafford County

80 MSF+ 9,900+ AC $443M

Data Center Space Under Under Construction/Planned Land Sales Volume
Construction/Planned for Data Center Since 2023
Development

8 CUSHMAN & WAKEFIELD | THALHIMER CRE IMPACT REPORT | 2024 IN REVIEW 9

CHARLOTTESVILLE

LIFE SCIENCES
BUZZ
Virginia announced a $90 million AI software company, DataShapes,
investment to build a research triangle relocated its Silicon Valley headquarters
between the University of Virginia, to Charlottesville’s North Fork Discovery
Viginia Tech, and Virginia Commonwealth Park, citing the area as a hub for innovation
University, all higher education institutions in keeping with the burgeoning life
that consistently dominate national sciences community. Afton Scientific also
rankings. UVA broke ground on the Manning announced a planned investment of more
Institute of Biotechnology, a state-of-the- than $200 million to expand its existing
art facility that will be home to researchers biopharmaceutical manufacturing facility,
exploring ways to improve health from the creating 200 new jobs.
cellular and genetic level. Charlottesville
also recently ranked 10th for medical device
capital raised nationwide, behind only a
few major metros like Boston, the Bay Area,
New York, and Chicago.

$350M $200M $200M

“ THALHIMER’S TAKE

“The life sciences contributions of projects like the Manning Institute will have
significant positive impact on Charlottesville’s capacity to recruit talent and retain
growing companies in biotech related fields. Similarly, Northrop Grumman’s investment
in their Waynesboro facility will add almost 100 net new jobs to the market and
UVA Manning Institute of Afton Scientific Biopharm Northrop Grumman catalyze the already rapidly expanding city, which is also kicking off their downtown
Biotechnology Under Manufacturing Expansion Manufacturing & Testing revitalization project.”
Construction Facility
John Pritzlaff | Senior Vice President

$90M #1 #4 “The UVA Foundation continues to be an innovation leader at the heart of the region with
their investment in partnerships at North Fork and beyond, attracting top companies
Biotech/Life Sciences Led Virginia in Job Growth Top U.S. Public Schools; UVA on the cutting edge of technology, biotechnology, defense, and more. The Foundation’s
Network Between (June 2023 to June 2024) - US News & World Report continued development at North Fork after a 2024 rezoning of the site will also
UVA, VT & VCU contribute to continued growth in the region, as will Northrop Grumman’s expansion.”
Jenny Stoner | Senior Vice President

10 CUSHMAN & WAKEFIELD | THALHIMER CRE IMPACT REPORT | 2024 IN REVIEW 11

 “
ROANOKE

MANUFACTURING THALHIMER’S TAKE

RISE “The Roanoke region is experiencing sustained growth, with a number of large
manufacturing companies making significant investments in the area. This trend is
expected to continue, fueled by both local and state-level commitments to infrastructure
improvements and the development of key sites for expansion.

Manufacturing is on the rise in Southwest manufacturing facility. In Bedford County, The region is already reaping the benefits of strategic investments in Virginia Tech,
Virginia, with more than 1,500 manufacturing Solarix will establish a $63 million solar module Carilion, and Fralin Biomedical Research Institute. Collaborative efforts between
jobs added to the region since 2019 – 50% manufacturing facility, and Framatome will these institutions are fostering the development of thriving biotech clusters within
of the sector’s growth statewide. Regional invest $49.4 million to expand its Lynchburg the region’s innovation corridor. The addition of more than $66 million in state grants
companies Yokohama Tire, TW Controls, headquarters, creating 515 jobs. for biotechnology and life sciences specifically will continue to strengthen the region’s
Smurfit Westrock, Flowers Food, and TXTUR position as a hub for innovation and economic growth.”
Furniture were all recognized by the Virginia Roanoke has dedicated $10 million to create Barry Ward | First Vice President, Managin Broker
Manufacturers Association for excellence and a development ready site in the Roanoke
innovation. Centre for Industry & Technology, large enough
to accommodate a 400,000 SF building. To
The Danville region and Pittsylvania County further position sites for development, the
“The biomedical landscape in Roanoke is rapidly evolving, creating both immediate
specifically have seen an influx of manufacturing region also received $13 million in state grants
and long-term economic opportunities that will shape the region for generations to
investments to the Southern Virginia Megasite specifically designated for infrastructure
come. Virginia Tech is leading the charge with a transformative expansion of its medical
at Berry Hill, the largest industrial site in the improvements. With Virginia Tech integral to
school, investing in a state-of-the-art building that will not only increase its student
state and one of the largest in the Southeastern the state’s planned research triangle, the region
population but also enhance educational capacity. Additionally, the Taubman family’s
U.S. Microporous announced plans for a $1.35 is poised to capture new life sciences and significant investment in a cutting-edge cancer center within the Roanoke biomedical
billion manufacturing facility that will bring pharmaceutical manufacturing users. corridor reflects a powerful commitment to the community. These developments,
more than 2,000 new jobs to a 212-acre backed by some of the region’s largest employers, are not only improving healthcare
portion of the megasite. Cambridge Pavers also access but also positioning Roanoke as a premier biomedical hub.”
selected Pittsylvania for its new $47.4 million
Price Gutshall | Vice President

$1.35B 1,500 $444M

Microporous New Manufacturing Amtrak Passenger
Investment Jobs Rail Extension

$387M $177M #2
2023 Economic 2024 YTD Roanoke Best City in the South
Impact County Investments to Move to
- USA Today

12 CUSHMAN & WAKEFIELD | THALHIMER CRE IMPACT REPORT | 2024 IN REVIEW 13

 COMMERCIAL REAL ESTATE

MARKET SURVEY
WHAT ROLE DO YOU SEE THE OFFICE ENVIRONMENT PLAYING IN
COMPANY CULTURE MOVING FORWARD?
45.00% 41.98%
40.00%

35.00%
Industrial Owners
OFFICE FOCUS 32.10%
8% 8%
Looking ahead to 2025, Thahlimer surveyed industrial, office and retail occupiers and owners with a presence More than 75% of respondents
30.00%
8% Office & Medical Office Owners
throughout Virginia, asking for their insights on current trends and challenges in their respective industries. view the office environment’s 25.00%
Retail Owners
There11%were over 250 respondents to the survey that included owners and users of all product types as well as role as a physical workspace 20.00%
influencers within
Industrialthe commercial real estate industry.
Tenants
and collaboration center, still
8% Office & Medical Office Tenants RESPONDENT BREAKDOWN 15.00%
vital to companies even as the 12.35%
The overall outlook is a positive one across product types.
Retail Tenants
hybrid model becomes more 10.00% 7.41%
40% Office occupiers indicate that hybrid work has been embraced
Influencers 8% 8%
Industrial Owners
widely embraced.
6.17%
while acknowledging that the physical office environment is 7% 1% Office Owners 5.00%
critical for collaboration. Industrial occupiers ranked labor 17%
Medical Owners
0.00%
availability as their top concern, indicating that the sector 11% Retail Owners A Physical A Collaboration A Representation Other An Employee
Workplace Center of Company Culture Attraction &
itself is fundamentally healthy. Retailers are optimistic about 3%
Industrial Tenants
& Brand Identity Retention Tool
consumer spending in 2025, with a vast majority forecasting Office Tenants
8%
sales and traffic to match and even top 2024 levels. Investors Medical Tenants
are looking to the retail and industrial sectors to expand their Retail Tenants
holdings, further evidence of the health of those subsets of 37% Influencers
the market. IF YOUR COMPANY WERE TO EXPAND ITS PORTFOLIO OR HOLDINGS
IN 2025, WHICH PRODUCT TYPE WOULD MOST LIKELY BE ADDED?

KEY TAKEAWAYS
45.00%

40.00% 38.98%

WHAT TYPE OF IMPACT HAS REMOTE WORK HAD ON COMPANY INVESTMENT FOCUS 35.00%
CULTURE, EMPLOYEE DEVELOPMENT, AND PRODUCTIVITY? Real estate owners and 30.51%
30.00%
50.00%
45.68%
investors are focused on retail
45.00% and industrial product with 25.00%
A HAPPY HYBRID 40.00% 38.27% more than 69% of respondents
35.00% collectively indicating that 20.00%
Office occupiers see an upside
30.00% those are the most likely to be 15.00%
to remote work with more than
added to their holdings in 2025. 11.86%
45% of respondents saying 25.00%
10.00%
10.17%

that the flexibility of a hybrid 20.00% 16.05%

6.78%

work schedule has created a 15.00% 5.00%

happier workforce. 10.00%

0.00%
5.00% Office Medical Retail Industrial Land

0.00%
Positive - Employees Little to none - We are Negative - Remote work
appreciate the flexibility operating the way we has hindered company
and are happier at work always have development and employee
as a result performance LOOKING AHEAD TO 2025, WHAT TRENDS ARE
YOU EXPECTING IN CONSUMER SPENDING?
45.00%
WHAT IS THE GREATEST CHALLENGE FACING YOUR 40.00%
40.00% 37.50%
OPERATION CURRENTLY?
CONSUMER CONFIDENCE 35.00%
A LABOR DEFICIT 12.50% Space Constraints/Limited Supply Retailers are anticipating 30.00%
sustained traffic and consumer 25.00% 22.50%
Industrial occupiers are 12.50% Supply Chain
spending at and above current
reporting labor availability as 43.75% 20.00%
Labor levels with more than 37% of
the greatest challenge in the 15.00%
12.50%
respondents expecting an
current market with more than Real Estate Costs 10.00%
increase in sales in 2025.
43% of respondents ranking it 5.00%
All of the above
as their primary concern. 18.75%
0.00%
31.25%
Other Positive Shift – Sales are Limited to No Change – Negative Shift – Consumers
forecast to increase Traffic and sales are likely spending is likely to drop
to remain the same

14 CUSHMAN & WAKEFIELD | THALHIMER CRE IMPACT REPORT | 2024 IN REVIEW 15

FOR MORE INFORMATION:

LIZ GREVING
Associate Director, Research
804 648 5881
[email protected]

ABOUT CUSHMAN & WAKEFIELD | THALHIMER

Cushman & Wakefield | Thalhimer provides global strategic
commercial real estate solutions throughout Virginia and
beyond. Headquartered in Richmond with full-service offices
in Fredericksburg, Lynchburg, Newport News, Roanoke,
Charlottesville and Virginia Beach, Virginia; Thalhimer offers a
level of expertise, experience, and coverage unmatched in the
region. In its seven offices, Thalhimer has nearly 100 brokerage
associates with expertise in all product types, 40 portfolio
managers, and over 530 talented associates company-wide.

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