Over the past several years, Greater Richmond’s real estate market has been trending upward in nearly every aspect from traditional residential to office and industrial. We asked a few real estate experts their thoughts on the 2020 outlook and they described the region as exuberant, optimistic, robust, strategic and surprising.

When prompted about future real estate trends in Greater Richmond, Tim Davey of Timmons Group stated the industrial sector is ‘surprisingly strong’ because of companies like Amazon ‘validating the Richmond market.’ Watch the trends video below:

The region has seen an uptick in spec industrial investments over the last two years that has paid off with companies such as Amazon and Brother International Corporation quickly moving on the properties. Other recent investments throughout the region include:

  • Cartograf selected the region for a new 275,000 square-foot micro-corrugated package printing facility.
  • ChemTreat broke ground on a new 25,000 square-foot applied technology lab.
  • Pharmaceutical Product Development (PPD), a leading global contract research organization, will invest $63.7 million to expand its bioanalytical lab.
  • The 34-acre Virginia Bio+Tech Park will begin construction on its new 100,000 square-foot building which will accommodate growing startups.

As CoStar noted in its recent Office Market Report, “Richmond’s growth post-recession has been nothing short of remarkable.” Clearly, businesses and individuals are taking notice of the wonderful attributes that the region has to offer. Low cost of living combined with high quality of life, solid economy, and low tax-rates, make Richmond an ideal place of residency for businesses and employees.

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Taxes affect a multitude of business decisions such as job creation and retention, plant/headquarter location, competitiveness, the long-term health of a state’s economy, and transparency of the tax system. Taxes diminish profits and that is why Virginia, with its lower corporate and sales taxes, is an appealing option to companies.

According to the Tax Foundation, Virginia ranked 10th in the nation for corporate tax and sales tax component of the State Business Tax Climate. Data shows that the Virginia market is stable and experiencing economic growth while displaying that the state is heading in the right direction. Its broad sales tax, a sales tax that includes a wider range of consumer goods and services, makes taxing simpler while creating a stable stream of revenue. This stability makes Virginia an attractive state for companies to establish their business.

In 2017, Virginia had the lowest sales tax per capita at $469, out of 45 states and the District of Colombia. Our neighbors in Washington, D.C., had a sales tax per capita of $2,045, which ranked among the top five highest in the nation with the highest being Hawaii at $2,269. A broad sales tax base that includes more final consumer goods and services allows for sales tax to be reduced.

Read more about local & state taxes

International companies are lining up to invest in the “Top mid-sized city in the U.S. for foreign direct investment” (fDi Magazine). And companies from the United Kingdom are leading the pack.

Forty-four UK firms have facilities in the region, making up 20 percent of the total 220 international firms. Germany is a close second with 42 total facilities – and like the UK — mostly advanced manufacturing companies.

“(Greater Richmond’s) pro-business attitude and business-friendly environment made the decision much easier,” said David R. Holt, CEO of UK-based BGB Technology, manufacturer of slip ring assemblies.

Recent UK investments include:

  • WDM, a leading global manufacturer of road surveying equipment and provider of survey services and asset management software solutions, anticipates adding employees to its sales and survey office to build towards a possible U.S. manufacturing operation in the years ahead.
  • UK suppliers are drawn to the proximity of Rolls-Royce, which operates a turbine blade facility in the region. Both graphite electrodes maker Erodex Ltd. and aircraft parts labeler Pryor Marking Technology were attracted to continued service for one of its main customers at the new U.S. facility – while providing an opportunity to break into the American market.

International firms often ‘test the waters’ in the Richmond Region with small offices before expanding. Proseal USA and ITL Group are two companies that started with modest operations.

Thomas Jull of ITL Virginia

Proseal USA, manufacturer of food packaging machinery, recently expanded its operations in Chesterfield County by doubling its space to 50,000 square feet and outfitted a second production building next door to its existing plant. With demand for its equipment growing, the company is even considering constructing a 200,000-square-foot facility.

ITL Group, a Kent-based medical device firm, opened a U.S. facility to service existing clients in Hanover County. Thomas Jull, VP of Operations (US) for ITL Group, said having an office in the U.S. has improved relations with existing clients and eliminated delays caused by operating in different time zones.

“We could have located the business in Boston or in Florida, or anywhere else on the East Coast, but here there’s a really good industry… people are just extremely helpful,” explained Jull.

Learn more about our connection to the UK

 

Surging passenger traffic sparked a series of expansions at the Richmond International Airport (RIC) nearing $70 million. A $28.5 million addition to Concourse A is planned for early 2020 to support the airport’s 200+ daily flights.

RIC continues to set a new passenger traffic record each month since September 2017. Nearly 3.5 million passengers used the airport in its 2018 fiscal year thus far — up 5.7 percent since 2017. Direct flights to major cities are being added regularly to the airport’s roster to accommodate the increase.

Despite the rise in passenger traffic, the airport retains its easy access and convenience. RIC is considered one of the most efficient airports in North America and its central location is only 15 minutes from downtown Richmond. The airport attracts almost 3.5 million passengers traveling to and from Richmond, Washington D.C., Virginia Beach, Charlottesville, Williamsburg and Fredericksburg. A $35 million expansion to its North Garage is in the planning stages.

According to iFly.com, passengers rarely experience security checkpoint waits more than 20 minutes. RIC is planning to upgrade Concourse B’s checkpoint at a cost of $4 million, further decreasing line times.

In addition to passengers, RIC also handles an average of more than 100 million pounds of cargo annually by air carriers, including UPS and FedEx. Goods distributed out of the Richmond, Va., region can reach 50 percent of the U.S. population within 24 hours, making RIC one of the busiest air cargo facilities in the nation. RIC is also a designated Foreign-Trade Zone (FTZ #207), where foreign merchandise may be admitted into the airport without payment of U.S. Customs duties or government excise taxes for international commerce.

For private charters, the region offers an Executive Airport for businesspersons, corporate pilots, or general aviation. The airport is only 12 miles away from downtown Richmond and located near Interstate 95 – the main thoroughfare of the East Coast. Amenities include corporate hangar space, a corporate pilot’s lounge, conference rooms and transient crew quarters. Dominion Aviation also operates out of the Chesterfield County Executive Airport. Passengers are also able to charter planes through the Hanover County Airport in Ashland and through MartinAir, servicing out of RIC.

Learn more about the strong transportation infrastructure in the Richmond, Virginia, region.

Read about the region's transportation options

The Greater Richmond Partnership hosted an inbound marketing mission for participants of the 2018 SelectUSA Investment Summit on Monday, June 18.

The annual summit, organized by the U.S. Department of Commerce, was held in Washington, D.C. — just a couple of hours north of the Richmond Region. The Partnership invited guests of the summit for a pre-event tour of the region. Members of the Partnership’s International Advisory Committee, comprised of some of the area’s 200+ international companies representing 30 countries, welcomed the summit attendees.

The committee’s representative companies (including Allianz Global Partners, BGB Technologies, and Mavalerio) serve as an exceptional resource to international firms seeking to expand to North America and also constitute a valuable source of expertise and information when it comes to international trade.

SelectUSA Spinoff Reception

Companies large and small have chosen Greater Richmond for North American operations. Overall, the Richmond Region is host to more than 200 internationally-owned facilities in the area that employ over 21,000 workers. The products and services provided by these firms range from industrial machinery to specialty foods and from transportation to consulting services.

Greater Richmond has seen significant interest from two specific industry clusters: Advanced Manufacturing and Food & Beverage makers.

Advanced Manufacturing:

  • A locally-based Rolls-Royce manufacturing facility helped lure two suppliers, Erodex and Pryor Technology. The two UK-headquartered companies were seeking to improve existing customer relations while expanding its offerings.
  • German company iMPREG Group is expanding into manufacturing after a successful phase I. Their product, a fiberglass pipe liner, was first imported for distribution.
  • Polykon Manufacturing, a joint venture between two Air Liquide entities, is completing its facility to produce consumer cosmetics.

Food & Beverage

  • Sabra Dipping Company operates the world’s largest hummus factory in the region.
  • Brazil-based Mavalerio produces sugar confectionery toppings for North American distribution. The company chose the Richmond Region “because we can reach 55 percent of the U.S. population within 750 miles.”

Two-thirds of the Greater Richmond Partnership’s prospect pipeline is internationally-owned – meaning that more foreign companies are on the way to the Richmond Region. The Partnership has helped locate more than 100 international businesses since its inception, so is well equipped to guide your business through the steps necessary to establish your U.S. presence in the Richmond Region.

Learn more about Richmond's international appeal

It feels like everywhere you turn there’s a new accolade touting Greater Richmond’s outstanding quality of life, access to quality jobs or booming craft beverage scene. We all love our hometown communities, but it takes dedicated people working tirelessly behind the scenes to get the attention of a corporate decision-maker. By attracting businesses to the region, economic development can have an impact on many aspects of our economy. Here are our thoughts on the top five impacts of economic development:

Provides Richmonders with more and better jobs

Economic developers provide critical support and information to companies that create jobs in our economy. When a new company locates in the region, they hire within the community for newly created jobs or recruit new Richmonders to the area. Let’s say you have a job that pays the bills, but isn’t a perfect fit. By attracting more companies to the region, the pipeline of available jobs widens providing you with more opportunities to find that dream job.

Strengthens the regional economy and provides stability

Thoughtful and coordinated economic development diversifies the economy and ensures our region won’t falter if a large employer decides to close. To do this, the Greater Richmond Partnership (GRP) markets the region around the world as an ideal location to do business. These efforts help to grow industries such as Corporate Services, Information Technology, Finance & Insurance, BioScience, Advanced Manufacturing, Supply Chain and Food & Beverage. In partnership with the economic development offices of the City of Richmond and the counties of Chesterfield, Hanover and Henrico, as well as with the state-led Virginia Economic Development Partnership, this collaborative team of economic developers work to attract companies that will create jobs that are attractive to current residents, new graduates and maybe even entice those who left the region to return.

Local businesses are provided with resources to succeed

Local economic development agencies at the City of Richmond and the counties of Chesterfield, Hanover and Henrico work to ensure local businesses are provided with the resources they need to succeed. GRP supports their work through programs such as Business First and the Metro Richmond Exports Initiative, so businesses can receive the tools, education and networks to prosper and potentially expand. Maybe you have the next great start-up but need a larger space or assistance understanding new tax regulations; local economic developers can connect you with the perfect resources to meet your needs.

New investments help the community thrive

Increased presence of companies in the region leads to economic prosperity of the surrounding community. Through increased tax revenue stemming from capital investment by these companies, local infrastructure and community projects have the resources to thrive. Schools, parks and even non-profit organizations can benefit from new companies entering the local economy.

More and more bragging rights

With overall improvement of the region’s economy, the standard of living for residents will continue to increase. Economic development helps everyone by creating better jobs, supporting community initiatives and fostering a place for our kids and recent graduates to succeed. Thanks to a collaborative region, we have a lot to brag about.

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The Greater Richmond Partnership is celebrating Economic Development Week (May 7 – 12) along with economic development organizations across the world and the International Economic Development Council (IEDC). The event, held annually, was inspired by GRP President & CEO Barry Matherly when he was chair of IEDC.

 

Companies from across the world are selecting the Richmond, Va. region for a U.S. location making this the top ranked mid-sized city in the nation for foreign direct investment. This trend has no plans on slowing down as more than two-thirds of active Greater Richmond Partnership prospects are international companies.

The GRP recently held an Investor Forum event focused on the importance of international companies investing in the region. The event was moderated by Victor Branch, Richmond Market President of Bank of America, and speakers included international companies who recently located in the region — Amine Belmeslouhi from Polykon Manufacturing and Amber Roberts from iMPREG, LLC. Joining them were Rebecca Moudry, Vice President, Business Development at Research on Investment, and Olga Molnar, GRP’s Vice President, Global Investment.

Key takeaways from the event included:

  • The United States continues to be the biggest market in the world and the largest recipient of the foreign direct investment (FDI).
  • International firms are locating in the Richmond region because of the existing research and development in the region, access to markets they can export to and the ability to acquire new technology or business processes in the region. These were the main reasons why both iMPREG and Polykon Manufacturing decided to locate their facilities in the region.
  • However, all firms that are expanding into new global markets seek certainty. According to the AT Kearney FDI Confidence Index, ‘General Security Environment’ was cited as the top consideration by Fortune 1000 executives for their next FDI location. This is a significant change from previous years in which Domestic Market Size has traditionally held the top spot.

 

GRP Investor Forum, March 2018

Recently, Greater Richmond Partnership President and CEO Barry Matherly traveled to New York City to present to some of the top real estate investment firms in the world and promote future investments in Richmond, Virginia. Barry was invited to speak on a panel about “emerging U.S. real estate markets” by the editor of Real Estate Finance & Investment following a meeting he had with her last year on a media mission.

Barry shared the many reasons why it makes sense to invest in a middle market like Richmond, including finding more attractive yields. According to John B. Levy, large city yields average around 4.5% whereas in Richmond the average yields are between 5.5 and 5.75%.

Armed with fresh data from Cushman & Wakefield | Thalhimer, Barry shared that office rental rates have increased 5.2% over one year ago and industrial rental rates have increased 4.2% over one year ago.

For more information, or to download the presentation, click here.

At the annual International Economic Development Council’s conference, Richmond, Va., was ranked as one of the winners of the fDi Intelligence’s American Cities of the Future 2017/18 rankings. The publication, owned by the Financial Times, focuses on foreign direct investment — or FDI — into American communities.

“More than two-thirds of our projects are foreign direct investment,” said Barry Matherly, president and CEO of the Partnership. “This accolade solidifies the Richmond Region’s strength when it comes to international investment and will hopefully convince global companies to consider joining our region’s community of more than 200 internationally-owned businesses who are experiencing success.”

Richmond was named in the top three overall as a ‘Mid-Sized American City of the Future,’ and the highest ranked region in the United States. Among cities of its size, Richmond also ranked third in Economic Potential and seventh in Business Friendliness.

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It’s not the first time fDi has shined a spotlight on RVA’s international program. We’ve been rewarded with similar rankings from the publication for the last 10 years.

“These type of rankings have piqued the interest of international firms that choose the region for U.S. operations — sometimes the company’s first office outside of their home country,” explained Matherly. “Companies such as Mavalerio, BGB Technologies and ProSeal America opened small facilities that have expanded after success stateside and we’re happy that the region’s attractive FDI offerings helped their decision.”

The region was shortlisted after data was collected analyzing 421 locations under five categories: Economic Potential, Business Friendliness, Human Capital and Lifestyle, Cost Effectiveness and Connectivity. Locations scored up to a maximum of 10 points for each data point, which were weighted by importance to the FDI decision-making process in order to compile both the subcategory rankings as well as the overall American Cities of the Future 2017/18 ranking.

‘Mid-sized’ locations had an immediate city population more than 200,000 and a wider Larger Urban Zone of more than 750,000 people, or an immediate city population of more than 350,000 people.

FDI Rankings 2017