Overview
Cushman & Wakefield | Thalhimer is pleased to offer for sale the Hampton Roads Industrial Flex Portfolio, (the “Portfolio” or the “Properties”) located in Chesapeake, Virginia, part of the Norfolk, Virginia MSA. Consisting of five buildings and totaling 508,814 SF, the Portfolio is 84% occupied by a diverse roster of 37 tenants with 4.2 years of weighted average lease term remaining. The Portfolio has an average tenant tenure of 8.1 years with 59% of the rent roll affiliated with medical or government-related industries. Two of the largest tenants, Sentara Healthcare (12.1% of the Portfolio GLA) and Chugach Government Solutions (10.8% of the Portfolio GLA) have recently signed long-term renewals.
The Portfolio’s flexible tenant configurations, which include warehouse space, laboratory buildout and open office space, ideally support users that rely on the MSA’s three major economic drivers; the Department of Defense – which employs over 150,000 active-duty members and civilian personnel across 15 installations in the area, the Port of Virginia – the third largest port on the east coast, and the Sentara Healthcare System – the region’s largest healthcare network. Anchoring the Department of Defense’s presence in the region is Naval Station Norfolk, which is the world’s largest naval base and home to over 82,000 active-duty military personnel.
Investment Highlights
TURNOVER RESISTANT TENANT ROSTER WITH PROVEN DURABILITY
- Over 59% of the Portfolio’s occupied GLA is made up of medical and government related tenants
- Lab tenants make up 14% of the occupied GLA and have a weighted average tenure in the Portfolio of over 8.7 years
- Medical tenants within the Portfolio have a weighted average remaining lease term of 4.4 years
- Over 8.1 years of overall weighted average tenant tenure across the Portfolio
- 76% of the occupied GLA has executed new leases or renewals since August 2020, demonstrating resilience through the Covid-19 pandemic
IMMEDIATE ACCESS TO MAJOR ECONOMIC DRIVERS
- Located within 15-miles of five military installations with over 150,000 daily military and civilian employees,catering to government contractors
- Centrally positioned within the network of Sentara Healthcare’s 12 Virginia hospitals, which generated $11.2 billion in 2023 operating revenue
- Situated approximately 10-miles from the Port of Virginia, which generates over $100 billion of overall economic impact annually
CHESAPEAKE VIRGINIA – HOME TO ROBUST E CONOMIC MOMENTUM
- Chesapeake, Virginia is the chosen location for the Coastal Virginia Commerce Park, a 1,420-acre site that is being redeveloped with federal, state and local grants to attract semiconductor and advanced manufacturing to the region. The park has received multiple applications, and a signed lease contract is anticipated by mid-2024.
- 42% of all international businesses that operate in the region are located in Chesapeake, Virginia, resulting in over 70 companies from 18 countries with a presence in the market
- Home to Dollar Tree’s $100 million, newly developed headquarters building, located less than two miles from the Portfolio
SUPERIOR MARKET FUNDAMENTALS
- The Chesapeake Industrial/Flex submarket boasts a total inventory, occupancy rate over 95% with an average vacancy rate under 5.5% over the last decade
- Strong market fundamentals have resulted in a 42% growth in rental rates since 2018
- Consisting of 7.1 MSF of inventory, the submarket’s high barriers to entry have resulted in just a 3.8% increase in stock since 2015
CONTACTS
