Testing Richmond's Industrial Resilience: A Lease Deal in the Shadow of Past Cycles

The timing of the transaction is instructive. Construction on the leased building started in summer 2025, with completion targeted for late spring 2026. This aligns with a broader national pattern where development pipelines are moderating. While the Richmond market still sees almost 8.0 MSF of space currently under construction, the national context shows quarterly net supply additions on pace to fall below the pre-pandemic average, with supply growth set to hit an 11-year low in 2026. The deal, therefore, was signed during a period of peak national supply pressure, not a lull.

This creates a clear tension. The lease demonstrates that high-quality, Class A space in a strategic corridor can still command full-building take-up, even as year-over-year rent growth has slowed to 1.3% nationally. It suggests that demand for specific, well-located assets remains robust. Yet, it also highlights the market's fragility. The Richmond vacancy rate has expanded 20 bps so far in 2025 solely due to deliveries outpacing absorption, a dynamic mirroring the national shift toward tenant favoritism.