Recent data confirms that the Richmond region stands out as one of the hottest areas in the country for new industrial real estate growth and development. While a nationwide slowdown in leasing activity has been observed, the industrial market around Richmond has experienced immense demand and a surge of new construction projects.
Nathan Hughes, a Richmond-based commercial realtor at Sperity Ventures, is pleased but not surprised by the region’s industrial real estate boom. He notes that the economic development infrastructure work undertaken in recent years has positioned the area for steady growth, making it an attractive destination for industrial investments.
The Richmond area currently has 5.9 million square feet of industrial space under construction, and just a few months ago, the region had over 10 million square feet of new industrial projects in the pipeline, one of the highest totals nationwide. While speculative industrial development without secured tenants may be slowing down in some markets, the Richmond region continues to present opportunities for developers to build on speculation.
According to Brian Jenkins, President of Development at Richmond-based construction firm Hourigan, the region’s industrial development boom has been fueled by companies bringing manufacturing back to the U.S. and shifting economic trends. Hourigan itself was recently hired as the lead contractor for LEGO’s massive $1 billion manufacturing plant being built in Chesterfield, adding 1.7 million square feet of industrial space. While fewer large companies needing over 300,000 square feet are currently seeking space across the U.S., Jenkins believes that markets like Richmond still offer viable opportunities for speculative development, albeit with stronger conviction from developers and lenders who are closely monitoring market shifts.
Nathan Hughes concurs with this assessment, emphasizing that the Richmond region’s competitive advantages, such as lower construction costs and electrical rates compared to national averages, have made it an appealing destination for corporate decision-makers seeking speculative development opportunities.
The area has already attracted significant investments, including CEEUS, an electrical distributor investing $37 million in a new 187,000 square foot warehouse in Hanover County, and ABB opening a new $6 million manufacturing and distribution facility spanning 65,000 square feet. Additionally, SanMar Corporation, a garment company, took over the massive 1.1 million square foot East Coast Commerce Center building in Hanover, originally built on speculation, investing at least $50 million to make it their largest distribution hub, employing 1,000 people from the region’s skilled workforce of over 680,000.
While the red-hot industrial market may be cooling slightly nationwide, the Richmond region remains one of the hottest destinations for new development and company relocations and expansions in this booming sector. Nathan Hughes and other industry professionals remain optimistic about the region’s future potential, supported by ongoing economic development efforts and the collaborative approach between public and private entities.
