THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Friday, February 23, 1996 TAG: 9602230573
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY MYLENE MANGALINDAN, STAFF WRITER
LENGTH: Short : 48 lines
New home construction in Hampton Roads slowed while demand for retail space was the best ever in 1995, according to an Old Dominion University Real Estate Center presentation Thursday.
The number of building permits issued for new home building fell 7 percent to 6,556 permits in 1995, said Van Rose, president of Rose & Krueth Realty. By contrast, there were about 10,000 building permits for single family houses issued in 1987, he said.
The decline in new home construction is in part because of the rising cost of land prices and smaller lot sizes. Instead of building new or buying new, many are opting for resale homes.
``It's not like there's a huge pent-up demand out there,'' Rose said. ``The price of the lots has really been helping the residential resale market appreciate for the first time in a long time.''
While new home construction has stabilized, the demand for retail space was hot last year. Retail vacancy rates declined for the third year in a row, said Robert M. King Jr. of Harvey Lindsay Commercial Real Estate. Retail vacancy in Hampton Roads fell to 11.12 percent in 1995 from 13.2 percent in 1994, as more than 700,000 square feet was leased last year.
In other market sectors, commercial real estate brokers expected 1996 to show slow but steady growth or stabilization.
Industrial space vacancies fell in 1995 to 10.8 percent, nearing the national vacancy rate of 7.3 percent, said Jonathan Guion of S.L. Nusbaum Realty. Hampton Roads is competitive in the south Atlantic market with the average 10 percent average vacancies for industrial space, mostly large warehouses.
As less space was available - because of demand from manufacturers, distribution and service providers - rents rose 6 percent to 10 percent.
Expanding service companies, government agencies, financial and health care companies should help keep office market vacancies low, currently down to 12.1 percent, said Deborah Stearns of Goodman Segar Hogan Hoffler. Suburban office vacancies on both the Peninsula and South Hampton Roads are at 8 percent.
The multifamily housing market should also show signs of stability in 1996 because of the military's continuing large presence and new businesses moving into the area, said Gordon Poole of S.L. Nusbaum Realty Co. by CNB