Virginia Beach Commercial Office Space for Rent

Q1 2026

Virginia Beach Commercial Real Estate Market Report

Focus: Q1 2026 Market Trends

Executive Summary

The Virginia Beach and Hampton Roads commercial real estate (CRE) market is navigating a dynamic Q1 2026, maintaining economic strength anchored by its three pillars: defense, the port, and tourism. The Office sector is showing late-year momentum; despite negative annual absorption, the fourth quarter saw positive leasing activity and steady rent growth driven by high tenant improvement costs. Industrial fundamentals reflect a market adjusting to a heavy delivery cycle; while the region absorbed 1.6 million square feet in 2025, a massive 5.2 million square feet of new supply temporarily pushed vacancy higher. The Retail market remains exceptionally tight, hovering near a 4.3% vacancy rate as tourism spending and major developments like Atlantic Park drive robust leasing activity. Meanwhile, the Multifamily market remains resilient, currently digesting recent completions but positioned for tighter vacancy as the construction pipeline significantly contracts.

TenantBase Proprietary Data highlights the distribution of active tenant demand over the last 90 days:

  • Retail/Storefront dominated market activity with 67.74% of all searches (105 out of 155 total deals).
  • Warehouse was the second most active sector at 20.65% (32 deals).
  • Office accounted for 12.90% of total search volume (20 deals).

Office Market

Market Overview The Virginia Beach/Hampton Roads office market is showing late-year signs of recovery and a persistent flight to quality.

  • Vacancy & Absorption: The market experienced 131,000 square feet of positive net absorption during the fourth quarter of 2025, helping to tighten the vacancy rate to 12.8% by year-end.
  • Rents & Performance: Despite facing almost 300,000 square feet of negative net absorption for the year overall, average asking rents increased by 2.8% year-over-year to $23.57 per square foot. Heavy tenant improvement costs continue to be a primary contributing factor to this rent growth.
  • Construction Halt: There were no new office deliveries during the year, and the construction pipeline is limited to just four properties totaling 185,000 square feet. This restrained supply is actively helping to cap oversupply and will apply downward pressure on the vacancy rate moving forward.

TenantBase Activity

  • Demand Share: Office accounted for 12.90% of total search volume.
  • Lease Term Preference: Tenant demand shows a preference for short-term commitments, with Less than one year representing 68.42% of specified office deals (13 out of 19), followed by 3-5 Years at 21.05%.
  • Size Requirements: The average lower-bound requirement for 3-5 Year leases is 2,500 SF (with upper bounds up to 5,000 SF), indicating that active office tenants are primarily seeking smaller, highly efficient footprints.

Industrial & Warehouse Market

Market Overview The Hampton Roads industrial market is adjusting to a historic wave of new supply while maintaining long-term pricing strength.

  • Vacancy & Absorption: The market saw positive momentum in 2025, recording approximately 1.6 million square feet of positive net absorption. However, this was outweighed by 5.2 million square feet of new deliveries, pushing the vacancy rate up to 7.7%.
  • Demand Drivers: Average asking rents measured $10.30 per square foot during the fourth quarter, reflecting 3.2% year-over-year growth. Rents remain 38.1% higher than 2020 levels, underscoring the region's strategic positioning as a logistics and defense-oriented hub.
  • Construction: Construction activity cooled significantly by year-end following the heavy delivery cycle. The market closed 2025 with 1.7 million square feet under construction, signaling a healthy pullback after an aggressive development phase.

TenantBase Activity

  • Demand Share: Warehouse space captured 20.65% of total search volume.
  • Lease Term Preference: Industrial tenants display a preference for near-to-mid-term horizons, with 1-2 Years (50.00%) capturing the bulk of specified demand, followed by 3-5 Years at 22.73%.
  • Size Requirements: Requirement footprints scale heavily for mid-term commitments. The average lower-bound requirement for 3-5 Year terms is 10,000 SF, reaching up to an average upper bound of 25,000 SF.

Retail Market

Market Overview Retail across Virginia Beach and Hampton Roads closed the year with steady leasing momentum and intense competition for quality space, supported by record-breaking tourism.

  • Vacancy & Availability: The regional retail vacancy rate closed the year incredibly tight at 4.3%, an increase of just 20 basis points year-over-year. Annual leasing activity hit more than 2.5 million square feet despite tight inventory.
  • Leasing Drivers: Tourism continues to drive development at the oceanfront. 2025 saw the highly-anticipated opening of the first phase of Atlantic Park, a $350-million entertainment-based mixed-use development master-planned for more than 100,000 square feet of retail space.
  • Consumer Trends: Sustained demand and compressed vacancy applied upward pressure to quoted pricing, with lease rates up 7.8% year-over-year. Total annual sales volume topped $454 million, an increase of 17.9% compared to the prior year.

TenantBase Activity

  • Demand Share: Retail/Storefront activity dominated the market with 67.74% of all search volume.
  • Lease Term Preference: Retailers prioritize operational stability, with 3-5 Years (30.61%) and 1-2 Years (24.49%) capturing the bulk of specified demand.
  • Top Locations: Locational interest was heavily concentrated in the core submarkets, with Virginia Beach capturing 14 deals, followed by targeted searches in Chesapeake (12 deals) and Norfolk (6 deals).

Multifamily Market

Market Overview The Hampton Roads multifamily market ended 2025 in a healthy stabilization phase, digesting a wave of recent deliveries while supported by resilient renter demand.

  • Rent Growth & Vacancy: Overall vacancy closed the third quarter at 5.3%, a drop of 150 basis points year-over-year. Rent growth moderated but remained positive, with effective rates up 3.5% year-over-year to $1,603 per unit.
  • Market Drivers: Elevated mortgage rates and persistent single-family inventory shortages have contributed to sustained demand as the differential cost between renting and owning continues to climb. The market absorbed over 4,130 units since the start of 2024.
  • Supply Pipeline: The active construction pipeline is limited to 1,762 units, with Virginia Beach home to the largest share of development projects at 33% of the region's active units.

2026 Outlook

Moving further into 2026, the Virginia Beach/Hampton Roads CRE market is well-positioned for stability, leaning on its broad economic foundation and robust tourism base.

  • Office Rebalancing: With very few new deliveries on the horizon, the market is positioned for a steady 2026 recovery. Landlords willing to invest capital into tenant upfits will successfully capture demand and lower the vacancy rate.
  • Industrial Absorption: While the 5.2 million square feet delivered in 2025 will weigh on vacancy in the near term, the sharp slowdown in new construction starts will allow the market to digest this space and resume vacancy compression by late 2026.
  • Multifamily Tightening: With the construction pipeline dwindling to under 1,800 units, the lack of incremental supply pressure will allow the region to maintain rent gains above the national pace into 2026 and tighten overall occupancy.

Sources

  1. Newmark: Hampton Roads Office Market Report Q4 2025
  2. Thalhimer: Hampton Roads Office MarketBeat Q4 2025
  3. Newmark: Hampton Roads Industrial Market Report Q4 2025
  4. Thalhimer: Hampton Roads Retail MarketBeat Q4 2025
  5. CBRE: Hampton Roads Retail Figures Q4 2025
  6. Thalhimer: Hampton Roads Multifamily MarketBeat Q3 2025
  7. TenantBase Proprietary Market Data (Dashboard Export: SEO Market Reports, March 22, 2026)

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.