CBRE

FIGURES|NORFOLKINDUSTRIAL|Q42025

SpeculativeDeliveriesOutpaceOccupancy

Gain

r6.5%

OverallVacancyRate

Note:Arrowsindicatechangefrompreviousquarter.

66,168

SFOverallNetAbsorption

265,250

SFUnderConstruction

$9.32

AverageOverallAskingRate(NNN)

TheNorfolkindustrialandlogisticsmarketexperiencedaslowdowninactivityduringthefourth

quarter,butstillrecordedoccupancygainof66,000sq.ft.Despitepositiveabsorption,vacancy

increased100basispoints(bps)to6.5%duetosignificantspeculativedeliveries.Inturn,askingratesdecreasedslightlyto$9.32perannumonatriple-netbasis.

ManynotableprojectsdeliveredinQ4,includingthePort460LogisticsCenterBuilding1at2925

PrudenBoulevardinSuffolk,whichadded339,660sq.ft.ofspeculativespacetothemarket.Building2ofthisdevelopmentremainsunderconstructionandisexpectedtodeliverinQ12026.460

CommerceCenteralsodeliveredduringthefourthquarter,adding352,000sq.ft.ofvacantspacetothemarket.Intotal,1.4millionsq.ft.delivered,85%ofwhichisavailableforlease.

Leasingdecreasedslightlythisquarter,with788,700sq.ft.ofactivityacross35transactions.Amongfourthquartertransactions,71%wererelocations.Theaverageleasesizewasjust22,535sq.ft.andonlyoneleaseover100,000wassigned.

FIGURE1:HistoricalSupply&DemandDynamics

MSFVacancy(%)

7.0

6.0

5.0

4.0

3.0

2.0

1.0

0.0

(1.0)

2013201420152016201720182019202020212022202320242025

12

10

8

6

4

2

0

Deliveries(L)NetAbsorption(L)Vacancy(R)

Source:CBRE

1CBRERESEARCH?2025CBRE,INC.

FIGURES|NORFOLKINDUSTRIAL|Q42025

2CBRERESEARCH?2025CBRE,INC.

LeasingSnapshot

Manufacturing

Manufacturingtenantsaccountedfor14%ofgrossleasing

activityin2025.Thelargesttransactionofthequarterwasa

146,256sq.ft.leasebacktoHermesAbrasivesafterthesaleof

theirbuildingat524VikingDriveinVirginiaBeach.Thecompanyspecializesinmanufacturingcoatedandbondedabrasivesandrelatedproductsandtools.Additionally,BuschManufacturing

signedarenewal,retaining63,960sq.ft.at1910Campostella

RoadinChesapeake.Theyareaproducerofvacuumpumpsandotherlow-pressureequipment.

Automobiles,Tires,&Parts

NationalTireWholesale(NTW)renewed66,800sq.ft.at1960DiamondHillRoadinChesapeake.Thetiredistributorhasbeeninthislocationsince2018andsupplieslocalconsumerswith

wholesaletiresforpassengerandcommercialvehicles.

ThirdPartyLogistics

Thirdpartylogisticstenantsaccountedfor12%ofgrossleasingin2025.Duringthefourthquarter,TriStarFreightSystems

signedanexpansiontooccupyatotalof51,435sq.ft.at1965NorthgateCommerceParkwayinSuffolk.Theyprovidevariousfreightandwarehousingservicesandhaveseverallocations

acrosstheSoutheastandMid-AtlanticUnitedStates.

FIGURE2:SelectQ42025LeaseTransactions

Tenant

Industry

Address

Submarket

LeaseType

SF

HermesAbrasives

Manufacturer

524VikingDr

Lynnhaven

NewLease

146,256

NationalTireWholesale

Automobiles,Tires,andParts

1960DiamondHillRd

Bainbridge/S.ElizabethRiver

Renewal

66,800

OperationBlessingInternational

Nonprofit

907LiveOakDr

Greenbrier

Renewal

65,000

BuschManufacturing

Manufacturer

1910CampostellaRd

Bainbridge/S.ElizabethRiver

Renewal

63,960

TriStarFreight

ThirdPartyLogistics

1965NorthgateCommercePkwy

Suffolk

Expansion

51,435

UndisclosedTenant

Other

5732BaysideRd

AirportIndustrialPark

NewLease

36,000

Synectics

BusinessServices

804GreenbrierCir

Greenbrier

NewLease

35,500

SupplyOne

Manufacturer

1400CavalierBlvd

CavalierIndustrialPark

NewLease

33,385

Source:CBRE

FIGURE3:2025GrossLeasingbySector(SharebySF)

FIGURE4:HistoricalRentGrowth($/SF)

$10.00

$8.00

$6.00

$4.00

OverallRent

$10.00

$8.00

$6.00

$4.00

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

WarehouseRent

17%32%

14%

13%

12%

12%

Aerospace&Defense

Manufacturer

BuildingMaterials&Construction

3PL

Food&Beverage

Other

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Source:CBRE

Source:CBRE

FIGURES|NORFOLKINDUSTRIAL|Q42025

3CBRERESEARCH?2025CBRE,INC.

DevelopmentActivity

Sevenspeculativepropertiestotaling1.4millionsq.ft.delivered

duringthefourthquarter,ofwhich85%remainsavailableforlease.Mostnotablewasthe352,000sq.ft.warehouseat460CommerceCenterat12375WilliamAGwaltneyParkwayintheIsleofWight

submarket.HamptonLogisticsCenterinHamptondeliveredtwopropertiestotaling506,500sq.ft.Additionally,Building1ofthePort460LogisticsCenterat2925PrudenBoulevardinSuffolkdelivered339,660sq.ft.

Onlytwoprojectsremainunderconstruction,bothspeculative.

Building2ofthePort460LogisticsCenterisexpectedtodeliver246,490sq.ft.inQ12026alsoat2925PrudenBoulevardinSuffolk.Asmallerprojectat820TluchakLaneisalsoexpectedtodelivernextquarter,adding18,760sq.ft.ofspeculativespacetothe

market.

Theindustrialpipelinehasbeenveryactivethroughout2025,

whichhascreatedamarketwheresupplyiscurrentlyoutpacingdemand.Themajorityofthespeculativeprojectsthatdelivered

thisquarterwerecompletedwithoutanypre-leasingactivityandarenowinthelease-upstagepost-delivery,causinganincreaseinoverallvacancyforthemarket.

FIGURE5:NotableProjectsUnderConstruction

TypeProjectNameAddressSubmarketSFPctLeasedTenantDeliveryDeveloper/Owner

Port460LogisticsCenterBuilding2

2925PrudenBlvdSouthSuffolk246,4900%-Q12026Matan

Speculative

820TluchakLane

820TluchakLn

18,760

0%

Q12026

Bainbridge

-

WhitmanDevelopmentGroup

MSFVacancy(%)

7

6

5

4

3

2

1

0

7.0

6.0

5.0

4.0

3.0

2.0

1.0

0.0

2022202320242025

Deliveries(L)NetAbsorption(L)Vacancy(R)

Source:CBRE

FIGURES|NORFOLKINDUSTRIAL|Q42025

4CBRERESEARCH?2025CBRE,INC.

EconomicOutlook

FIGURE6:EmploymentGrowthbyIndustry,12-MonthPercentChange

TheU.S.economyissendingsomemixedsignals.Financialmarketsarefocusedontheupside,particularlyAI’ssizablecontributionto

growthinrecentquarters.Someindicatorsofbusinessactivity,suchascapitalgoodsorders,areimproving,andstrengtheningcredit

marketsarehelpingtousherrealestateintoanewcycle.

Thepicturegetsmoremelancholywhenlookingathouseholds.

Consumerconfidenceremainsweak,withspendingreportedly

drivenbyasmallersegmentofaffluenthouseholds.ThismosaicofdatasuggeststhatannualaverageGDPgrowthwillbesteadyin2026,at2%,butatouchsofterthanin2025.Akeycatalystisa

softerlabormarket,ascompaniesare‘slowtohire,slowtofire’—atrendthatislikelytolastafewquarters.Aconsequenceofthis

outlookissofterinflationandlong-termbondyieldstrendingjustbelow4%byH22026.

EducationandHealthServicesOtherServices

ProfessionalandBusinessServicesTotalNonfarm

Mining,Logging,andConstructionFinancialActivitiesGovernment

Trade,Transportation,andUtilities

LeisureandHospitality InformationManufacturing

-7%-6%-5%-4%-3%-2%-1%0%1%2%3%

Source:BLS

FIGURE7:UnemploymentRate

9%8%7%6%5%4%3%2%1%0%

NorfolkUnitedStates

Source:BLS

FIGURE8:ConsumerPriceIndex,12-MonthPercentChange

12%10%8%6%4%2%0%-2%

SouthRegionUnitedStates

Source:BLS

FIGURES|NORFOLKINDUSTRIAL|Q42025

5CBRERESEARCH?2025CBRE,INC.

FIGURE9:KeyMarketStatistics

Location

Inventory(SF)

Overall

VacancyRate(%)

Q42025Net

Absorption(SF)

2025Net

Absorption(SF)

NNNUnder

AskingConstructionRent($/SF)(SF)

Warehouse

Southside

82,498,351

6.8

44,0253,220,614

9.07246,490

Peninsula

28,722,181

6.6

23,565115,264

9.05-

Overall

111,220,532

6.7

67,5903,335,878

9.07246,490

Flex

Southside

10,646,377

4.7

688

40,480

12.52

1