Richmond Office Market Report

Strong interest in contemporary spaces drives a tight market. Leases with term lengths of 10 years or more are on the rise in Richmond, reflecting growing tenant confidence coming into 2025. Concessions like free months and rent discounts are becoming less commonplace. While vacancy in Class B and C offices — which compose 70 percent of inventory — remained relatively stable, the Class A rate has dropped 350 basis points since the first quarter of 2023, indicating growing demand for premium office spaces. The proportion of new Class A leases that are sublet is up from 5 percent in 2023 to 12 percent in 2024, edging sublease availability back toward pre-pandemic levels. Overall, vacancy fell in Downtown and Southwest Richmond, two of the metro’s three largest office submarkets by inventory. Accelerating completions, however, may see these rates elevate slightly in 2025. The metro’s office stock will grow at the third-fastest pace in 18 years, although many of these projects are intended for medical tenants. Richmond’s population of residents aged 65 and older is growing at three times the rate of its general population, suggesting ongoing demand for medical office space.