Roanoke’s Office Market Sees Stabilization in 2014
Poe & Cronk Real Estate Group released the results of its 28th annual Office Market Survey today, reporting occupancy and rental rates in all three major Roanoke office sub-markets remain unchanged as overall occupancy remained at 86% following previous year declines. This data could be signaling a relative floor for occupancy and rental rates in the Roanoke MSA.
As job growth continues to improve in the valley, many employers have limited capacity within their existing space for new hires. As this capacity is absorbed and the business environment continues to improve, it is anticipated employers will be actively seeking new office space in 2015. These improving indicators have kept the overall occupancy rate flat at 86%, matching last year’s occupancy rate. The economic outlook for 2015 remains optimistic.
With approximately 57,000 SF of office space absorbed by new owners in 2014, the 86% occupancy rate for the Roanoke office market remained ahead of the national average of 83%, as reported by the national real estate research firm REIS, Inc. As 2014 finished, REIS anticipated that national rents grew by roughly 2.6 percent for the year and they are forecasting rent growth to pick up in 2015.
Locally, Poe & Cronk is seeing activity increase amongst all three districts for both sales and leasing, creating opportunities for tenants and investors alike in 2015. “If this growth persists, it should be strong enough that we should see office occupancy rates increase,” said Bryan Musselwhite, CCIM, of Poe & Cronk Real Estate Group.
Poe & Cronk developed Roanoke’s original office market survey in 1987 and has conducted it annually using consistent criteria and methods of reporting. This year’s survey incorporates data covering more than 100 non-governmental office buildings measuring 10,000 square feet or more.