Richmond Commercial Office Space for Rent

Q4 2025

Richmond Commercial Real Estate Market Report

Focus: Q4 2025 Market Trends

Executive Summary

The Richmond commercial real estate (CRE) market is navigating a period of mixed performance, with the Retail sector leading the charge thanks to tight vacancies and positive net absorption [5]. Office fundamentals remain challenged by high vacancy, though there is a clear tenant preference for high-quality, amenity-rich spaces [1]. Industrial activity has slowed from its pandemic peak, with vacancy rising as new supply enters the market, yet the sector remains a key driver of regional growth [2, 3]. Multifamily is stabilizing, with demand absorbing new units and rent growth moderating to sustainable levels [7].

TenantBase Proprietary Data [10] highlights the distribution of active tenant demand over the last 90 days (129 total deals):

  • Retail/Storefront dominated market activity with 66.67% of all searches [10].
  • Warehouse was the second most active sector at 21.71% [10].
  • Office accounted for 12.40% of total search volume [10].

Office Market

Market Overview Richmond's office market is in a state of transition, with vacancy rates elevated but stabilizing. Tenants are increasingly focused on upgrading their space to attract talent, driving demand for Class A properties.

  • Vacancy & Availability: The overall vacancy rate stands at 18.7%, with Class A vacancy slightly lower as companies consolidate into better spaces [1]. Availability remains high, particularly in older suburban assets [1].
  • Net Absorption: Net absorption was negative in Q3 2025, continuing a trend of space givebacks [1]. However, smaller tenants remain active, particularly in the <5,000 SF range [10].
  • Rental Rates: Asking rents have held steady at $22.50 per SF (Full Service), with landlords offering generous concessions to secure leases [1].
  • Market Drivers: TenantBase data shows a strong preference for shorter lease terms, with 53.33% of office inquiries seeking leases of Less than one year [10].

TenantBase Activity [10]

  • Demand Share: Office accounted for 12.40% of total search volume [10].
  • Lease Term Preference: Demand is heavily skewed toward short-term flexibility:
    • Less than one year: 53.33% of deals [10].
    • 3-5 Years: 20.00% of deals [10].
    • 1-2 Years: 13.33% of deals [10].
  • Size Requirements: Tenants seeking 3-5 Year leases have an average lower size requirement of 1,950 SF, while short-term users typically need smaller footprints [10].

Industrial & Warehouse Market

Market Overview The Richmond industrial market is cooling after years of rapid expansion, with vacancy rising due to a surge in new deliveries. However, the region's strategic location continues to attract logistics and distribution users.

  • Vacancy & Rent: Vacancy rose to 6.1% in Q3 2025, up from previous lows [3]. Asking rents have stabilized at $7.50 per SF (NNN) after a period of rapid growth [3].
  • Demand & Supply: Leasing activity has moderated, but net absorption remains positive in key submarkets [2]. The construction pipeline is active, with over 3 million SF underway, which will keep vacancy from compressing significantly in the near term [3].
  • Leasing Highlights: TenantBase data shows steady demand for mid-term leases, with 3-5 Years and 5+ Years accounting for a significant portion of warehouse inquiries [10].

TenantBase Activity [10]

  • Demand Share: Warehouse accounted for 21.71% of total search volume [10].
  • Lease Term Preference: Demand is spread across lease terms:
    • 1-2 Years: 45.00% of deals [10].
    • 2-3 Years: 15.00% of deals [10].
    • 3-5 Years: 15.00% of deals [10].
  • Size Requirements: The average lower size requirement for warehouse space is 2,500 SF for 3-5 year terms, while larger requirements for Less than one year averaged 25,000 SF [10].

Retail Market

Market Overview Richmond's retail sector is a standout performer, with limited new construction driving vacancy to historic lows and supporting rent growth.

  • Vacancy & Availability: Retail vacancy is tight at 3.2%, the lowest level in over a decade [5]. Availability is scarce in high-traffic corridors like Short Pump and Carytown [6].
  • Rental Rates: Asking rents have risen 3.5% year-over-year to an average of $19.50 per SF (NNN) [5].
  • Construction: New retail development is minimal, focused primarily on grocery-anchored centers and mixed-use projects [6].

TenantBase Activity [10]

  • Demand Share: Retail/Storefront activity dominated with 66.67% of all search volume [10].
  • Lease Term Preference: Retail tenants show a preference for stability:
    • 3-5 Years: 31.71% of deals [10].
    • Less than one year: 24.39% of deals [10].
    • 5+ Years: 21.95% of deals [10].
  • Top Locations: Tenant interest is highest in Richmond (City) (22 deals) [10].

Multifamily Market

Market Overview The multifamily market is stabilizing as it absorbs a wave of new supply, with occupancy rates holding firm and rent growth returning to normal patterns.

  • Vacancy & Occupancy: Vacancy held steady at 6.2% in Q3 2025, with occupancy rates consistently above 94% [7].
  • Rents: Average asking rents rose 2.1% year-over-year to $1,375 per unit, driven by demand for affordable housing options [7].
  • Construction: The construction pipeline has shrunk to 2,500 units, a significant decrease from previous years, which will support tighter conditions in 2026 [7].
  • Investment: Sales activity remains cautious, but pricing has stabilized, offering opportunities for investors seeking steady yields [8].

2026 Outlook

Looking ahead to 2026, the Richmond market is positioned for steady performance and gradual growth.

  • Industrial Strength: With a moderating construction pipeline and steady demand, the industrial sector is expected to see continued rent growth and stable vacancy [3].
  • Retail Resilience: The lack of new retail supply will keep vacancy low and rents rising, making existing centers highly valuable [5].
  • Office Stabilization: While challenges remain, the office market is expected to find a floor as tenants take advantage of favorable terms and right-size their space needs [1].

Sources

  1. Cushman & Wakefield: Richmond Office MarketBeat Q3 2025
  2. Colliers: Richmond Industrial Market Report Q3 2025
  3. Cushman & Wakefield: Richmond Industrial MarketBeat Q3 2025
  4. Commonwealth Commercial: Market Reports
  5. Cushman & Wakefield: Richmond Retail MarketBeat Q3 2025
  6. Divaris Real Estate: Richmond Market Reports
  7. Berkadia: Richmond Multifamily Report Q3 2025
  8. Yardi Matrix: Richmond Multifamily Market Report – September 2025
  9. Greater Richmond Partnership: 2025 Economic Outlook
  10. TenantBase Proprietary Market Data (Richmond - Last 90 Days)

Information in this report is aggregated from various third-party sources and synthesized using artificial intelligence and other research tools. While we believe these sources to be reliable, we cannot guarantee the absolute accuracy or completeness of the data. This report is intended for informational purposes to provide market insight and should be independently verified prior to any use in a real estate transaction or legal commitment.