MMM Design Group relocated its 22,000-square-foot corporate offices to Norfolk's Main Street Tower.

Hampton Roads Office Market Proves Healthy

 HAMPTON ROADS, VIRGINIA -- The Hampton Roads office sector doesn’t suffer the peaks and valleys of a more speculative market, according to Divaris Real Estate president Michael Divaris.

      “The market is pretty healthy in that it’s largely dependent upon government contracting,” says Divaris. “So when the economy is booming, our market is solid. When the national economy is on a downswing, the Hampton Roads market is still relatively solid, because of the underpinning of its tenant base and the conservative nature of its area’s developers.”

      The asking rents for Class A office space range from $21 to $28 per square foot, full service. Typical leases are gross rents, with operating expense increases passed through to the tenant, over a base year. In recent years, there have been three significant office projects in Hampton Roads:  two town centers, one in Virginia Beach and the other in Newport News, and a new office tower in downtown Norfolk.

      “Because the market was strong, the absorption rate could digest this new product, without creating an oversupply issue,” notes Divaris.

      Notable office transactions over the past 12 months include Northrop Grumman’s 116,000 square feet in Hampton's NetCenter, MMM Design Group’s 22,277-square-foot corporate office in Norfolk’s Main Street Tower; and  Bank of America and Wolcott Gates (12,000 square feet each) in Virginia Beach's One Columbus Center. 

      Divaris Real Estate was appointed to handle MMM Design's corporate office relocation and to advise the client either to remain in downtown Norfolk or to move to another Hampton Roads city. That entailed a thorough search of the market to find out what was available; if there were any city incentives; and to negotiate the business terms for the space finally selected.

      "With Windwood and Pinewood, two office buildings owned by Berman Kappler, we were successful because the buildings had changed ownership, and the new owners wanted to upgrade the common areas.  This really made the property more enticing,” notes Divaris. “That in turn, led to attracting more tenants.” 

      Fresenius Medical Care of Virginia is a corporate tenant representation client of Vivian Turok, assistant vice president of office leasing for DRE.  Turok secured two locations for the outpatient dialysis facility in 2004.  Both for 8,000 square feet, Fresenius leased space in Technocenter Office Building in Virginia Beach and Dominion Marketplace in Chesapeake.  Levi Thomson of DRE’s Virginia Beach office represented the landlord in the Dominion Marketplace lease.

      Interstate Corporate Center is one property where location is its greatest asset.  Divaris Real Estate, Inc. has been appointed both leasing and management agents for the 17-building complex located at the intersection of Interstates 64 and 264.  

The James is one of 17 buildings in Interstate Corporate Center at the intersection of I-64 and I-264 in Norfolk.