Return to Virginia Business - April 2002

- All aboard — Roanoke's downtown renovation preserves its past
- Developer unsnarls traffic congestion as part of the deal
- Sensitive project tests broker's deal-making skills
- Shipbuilding complex boosts downtown Newport News
- Turning Basin project could be turning point for Canal Walk
- Other Nominees

by Paula C. Squires

What were the most significant commercial real estate projects in 2001? To find out, Virginia Business once again teamed up with the Virginia chapter of Certified Commercial Investment Members. A panel of nine judges selected five winners from among 17 entries submitted from around the state. What caught their eye? Creative deal-making that overcame obstacles, complex negotiations and projects that influenced communities in a big way. "We were looking for projects that made significant contributions whether it was in terms of employment or a stimulant for more development or redevelopment," says C. Lee Hilbert, president of Grubb & Ellis/Harrison & Bates in Richmond and leader of this year's judging committee.

The winners cast a sunny glow on a pretty glum year for commercial real estate. A recession and the terrorist attacks of Sept. 11 slowed business in much of the state. In Northern Virginia, a technology bust dumped millions of square feet of sublet office space back on the market. In the Washington suburbs and Richmond, vacancy rates climbed into the double digits and rental rates fell as brokers braced for the worst downturn since the 1980s. This time around the drop was more tenant than landlord driven, with tech companies failing to renew leases or going under. Hampton Roads, with a smaller technology community, escaped the huge dumping of space.

Prospects look brighter in 2002. With Washington fighting a war on terrorism, government defense contractors are expecting new, fat procurement contracts. More work translates into expanded operations, and companies are expected to absorb some of the empty office space - a trend that could boost markets in Northern Virginia and military-dependent Hampton Roads.

Looking into his crystal ball, Scott Price, director of research for Delta Associates, a real estate research firm in Alexandria, says, "Conditions are still soft, but we expect to see increased activity this year - a demand of 5 million square feet as a result of the ramp-up in defense and spending for procurement." In the meantime, a toast to the exciting projects of 2001.

Return to Virginia Business - April 2002