More second-generation space will be available, and during the next six months, we will see a leveling of the playing field in the office markets throughout the Richmond area. Look for a slowing of the increase in rental rates. For the long run, Divaris is optimistic about all sectors of commercial real estate in the region. Despite being smaller than Hampton Roads, the capital has maintained its appeal among corporate executives because of its rich history and lifestyle, Divaris says. A renewed vitality downtown will depend on the city's ability to market itself to firms that are attracted to Virginia, but don't like the pace or the price of the D.C. suburbs.
Opinions vary on Richmond's downtown.
Chris Haley, senior real estate analyst for Wheat First Union, doesn't anticipate much happening there in the near future. But Jeffrey Cooke of Morton G. Thalhimer is encouraged by the downtown vacancy rate, which at 11 percent this past quarter is the lowest in five years. No one can deny the dominance of business parks like Innsbrook in Richmond's northwest quadrant. Haley says its strong demographics and pro-business environment have helped establish that area as strong performer. Big players like Highwoods Properties and Liberty Property Trust already have entered that area in a big way.