Cushman & Wakefield | Thalhimer Market Report
Economy
The economy continued its modest improvement in the first
quarter of 2017. The Fredericksburg regional unemployment rate
remains below 5% with a downward trend to 4.2% in the first
quarter, compared to 4.4% for the same quarter in 2016. That
number is on par with Virginia’s overall unemployment rate of
4.2%. This decrease translates to an additional 3,099 jobs added
throughout the Fredericksburg region in 2016.
Market Overview
The Fredericksburg industrial overall vacancy rate still remained
in the single digits at 8.5% but ticked up 11 basis points (BP)
from the previous quarter. This increase is due to consolidation
and movement of tenants seeking upgraded facilities. The
inventory of properties over 50,000 square feet (SF) has almost
been depleted with a combination of consolidations into larger
facilities and new companies moving into the region.
The former General Motors plant was sold to a new
manufacturer, idX Corporation, who will add 120 new jobs and
occupy the entire 289,000-SF building on the 77-acre site. The
region competed against Maryland and North Caroline to lure the
company. In addition, an 88,000-SF facility was just leased to a
plastics company adding 100+ new jobs as they consolidate
several smaller local facilities.
Notable transactions signed during first quarter 2017 include
11,500 SF at 11765 Capital Lane to Finish Line Construction,
46,530 SF to Walmart at 3010 Mine Road, 7,400 SF at 400
Nelms Circle to Rainbow International Restorations, and
Southeast Cabinetry & Countertops renewed their 14,588-SF
lease at 11900 Main Street.
Outlook
Continued absorption of the existing product on the market is
expected as the overall economy continues to improve in the
second quarter. Rates have stabilized. However, landlords are
not expected to start advertising higher asking rates until new
product is built.
