Economy: Market Momentum Continues
The Roanoke region continued to build momentum, highlighted by several significant investments and economic development announcements. Rural King announced plans to invest $40 million (M) in a new distribution center in Henry County, creating 150 new jobs, while construction is well underway on the region's first Publix in Roanoke County, a 50,000-square-foot (sf) store expected to bring 130 new jobs to the market. The healthcare sector also saw major expansion activity, as Carilion Clinic unveiled plans for a new $112M inpatient rehabilitation hospital in Southeast Roanoke through a joint venture with Select Medical. Adding to the region's positive outlook, CNN recently named Roanoke one of America's Best Towns to Visit in 2026, further elevating its national profile. Meanwhile, the Conference Center at Hotel Roanoke has been acquired for $14M by a subsidiary of the Virginia Tech Foundation, reinforcing the long-term investment and stewardship of one of the region's premier hospitality assets. Together, these developments underscore the Roanoke Region's continued growth, investment appeal, and strengthening economic foundation.
Inventory: Strong Leasing Activity
Overall vacancy ended the quarter at 4.0%, decreasing 10 basis points (bps) quarter-over-quarter (QOQ). Leasing activity topped 102,619 sf during the quarter, and over 148,800 sf year-to-date (YTD). The top lease transaction was located at 1287-1455 Towne Square Blvd where HomeSense renewed 23,286 square feet of space. While deliveries for the quarter were limited, Tract D at Orchard Marketplace remains underway in Botetourt County where a total of 7,500 sf is being built by Thomas Builders of Virginia, Inc. In Southeast Roanoke, the new Wawa is under construction. This store will be 6,000 sf and located at 2843 Orange Ave. Panda Express is also building a new 2,60 sf restaurant located at 816 W Main St in Southwest Roanoke.
Pricing: Active Investments
Rental rates have decreased just over 1.0% QOQ and remained essentially flat year-over-year (YOY). Sales volume for the quarter topped $15M, and over $92.8M YTD. Topping the quarterly transactions was 290 Old Franklin Tpke. This 14,550-sf drug store transacted for $4.2M, or $290.93 per-square-foot (psf) to an undisclosed buyer. Following behind was 1800 W Main St. This 4,203-sf fast food restaurant occupied by KFC sold to CH H & B Associates, LLP for $1.8M, or $428.27 psf.
