Investment Insight
Richmond, VA Multifamily Market Report: July 2026 Complete Analysis
# Executive Summary: Richmond Multifamily Market — Q2 2026The Richmond, Virginia multifamily market enters the second half of 2026 in a similar position to where it stood in March: absorbing an elevated but declining construction pipeline while demand continues to outperform history. Vacancy sits at **8.3%**, total inventory has grown to **109,117 units**, and **4,667 units** remain under construction. Rent growth has slowed to **0.9% annually** as the market digests recent deliveries — but the supply story is turning, and the data increasingly supports the same thesis: *this is a temporary overhang, not a structural demand problem.*---## Key Performance Indicators (Q2 2026)| KPI | Data Point (Q2 2026) || :--- | :--- || **Total Apartment Inventory** | 109,117 units || **Market Vacancy Rate** | 8.3% *(vs. 8.1% national average)* || **12-Month Net Absorption** | 2,684 units *(83% above 10-year annual average of 1,464)* || **Average Asking Rent** | $1,609 per month || **12-Month Rent Growth** | +0.9% *(vs. +0.7% nationally)* || **Under Construction Pipeline** | 4,667 units across 19 properties (4.3% of inventory) || **12-Month Delivered Units** | 2,379 units || **12-Month Sales Volume** | $835.3 million || **Market Cap Rate** | 6.3% – 6.4% |> **Data source:** CoStar Group, licensed to Marcus & Millichap, July 26, 2026.---## Economic Overview: Demographics and EmploymentRichmond's metropolitan statistical area totals roughly 1.39 million residents across the City of Richmond, Henrico, Chesterfield, Hanover, and surrounding counties. The market's median household income of **$86,559** now exceeds the national figure of $84,955, and unemployment sits at just **3.6%** versus 4.5% nationally — a gap that continues to support renter demand and rent-paying capacity.### Key Demographic Statistics (Q2 2026)| Demographic Category | Richmond Metro | U.S. National Average || :--- | :--- | :--- || **Total Population** | 1,388,472 | 342,433,219 || **Households** | 565,342 | 134,479,438 || **Median Household Income** | $86,559 | $84,955 || **Labor Force** | 723,317 | 170,451,438 || **Unemployment Rate** | 3.6% | 4.5% |*Source: Oxford Economics via CoStar.*### Employment Market DriversRichmond's total employment stands at approximately 726,000 workers across a genuinely diversified base. Finance plays an outsized role locally, anchored by Capital One and Truist, and Richmond remains one of the few U.S. markets hosting both a Federal Reserve Bank and a U.S. Court of Appeals — institutional anchors that provide employment stability through economic cycles.#### Employment by Major Sector (Q2 2026)| Industry Sector | Jobs (Thousands) | Location Quotient | 12-Month Growth || :--- | :--- | :--- | :--- || **Trade, Transportation & Utilities** | 132 | 1.0 | -0.82% || **Professional & Business Services** | 124 | 1.2 | +0.10% || **Education & Health Services** | 116 | 0.9 | +1.85% || **Government** | 112 | 1.1 | -1.25% || **Leisure & Hospitality** | 68 | 0.9 | -2.64% || **Financial Activities** | 59 | 1.4 | -0.37% || **Natural Resources, Mining & Construction** | 43 | 1.1 | -1.22% |*Source: Oxford Economics via CoStar.*#### Major Employer & Quality-of-Life Advantages:* **Jabil Expansion:** Announced a new manufacturing facility at Crosspointe Logistics Center in Prince George's County in 2026, expected to employ over 350 people.* **CoStar Group Growth:** Announced 1,000 new Downtown Richmond positions in 2025, following its 2021 announcement of 2,000 new jobs.* **Logistics Hub:** Located on Virginia's fall line at the intersection of I-85, I-95, I-295, and I-64, supported by Richmond Marine Terminal upgrades.* **Higher Education:** VCU and UVA provide a steady pipeline of young professionals into the local renter pool.* **Top Business Climate:** CNBC named Virginia the **#4 state for business** in its 2025 Top States for Business list.---## Apartment Vacancy Analysis: Current Levels, Trends, and ForecastRichmond's vacancy rate of **8.3%** sits above the market's 10-year historical average of 7.0% but is essentially in line with the current national average of 8.1%. Vacancy has been mostly stable over the past year, and the market has posted positive net absorption for **13 consecutive quarters**, with demand exceeding 600 units per quarter for nine straight quarters.### Vacancy by Property Class (Q2 2026)| Property Class | Vacancy Rate | Total Units | Avg Asking Rent || :--- | :--- | :--- | :--- || **4 & 5 Star** | 9.6% | 41,037 | $1,831 / mo || **3 Star** | 7.8% | 38,905 | $1,572 / mo || **1 & 2 Star** | 7.3% | 29,175 | $1,312 / mo || **Market Total** | **8.3%** | **109,117** | **$1,609 / mo** |> *As in March, elevated vacancy is concentrated almost entirely in newly-delivered 4 & 5 Star lease-up product, while stabilized 1 & 2 Star assets are running tighter than the market average. About **80% of Richmond's net absorption** over the past year has gone into 4 & 5 Star properties.*### Submarket Performance Overview* **Highest Vacancy Submarkets:** West End (15.4%), Downtown Richmond (10.0%), South Richmond (9.5%), Northside (9.1%), Petersburg/C Hghts/Ft Lee (8.4%).* **Lowest Vacancy Submarkets:** Dinwiddie County (0.6%), Sussex County (1.3%), Goochland County (3.3%), Hanover County (4.8%).#### Key Submarket Drivers:* **Western Henrico County:** Richmond's largest submarket (28,282 units / 25.9% of total). At 8.2% vacancy, it absorbed 628 units over the past year with 1,209 units under construction. Average rent: $1,677/mo.* **Downtown Richmond:** Accounts for 16,172 units (14.8% of inventory) and posted the highest absorption at 644 units despite carrying 10.0% vacancy. Leads construction with 1,858 units underway.* **Midlothian:** Affluent southern suburb holding 8,085 units with 8.0% vacancy and $1,853/month average asking rent — Richmond's second-highest-priced submarket.---## Rent Analysis: Pricing, Growth Trends, and National Comparison### Richmond Rents vs. National Averages| Metric | Richmond Average | National Average | Discount || :--- | :--- | :--- | :--- || **Average Asking Rent (All)** | $1,609 / mo | $1,800 / mo | -10.6% || **4 & 5 Star Asking Rent** | $1,831 / mo | $2,240 / mo | **-18.3%** |### Top Submarket Rents (Q2 2026)| Submarket | Asking Rent / Unit | 12-Month Rent Growth || :--- | :--- | :--- || **West End** | $1,984 / mo | +4.5% || **Midlothian** | $1,853 / mo | +1.3% || **Goochland County** | $1,816 / mo | -5.9% || **Hanover County** | $1,743 / mo | +0.8% || **Downtown Richmond** | $1,722 / mo | -0.1% |---## Construction Pipeline & Delivery ForecastRichmond currently has **19 properties totaling 4,667 units under construction**, representing 4.3% of existing inventory (above the 2.7% national average).### Top Development Projects Currently Under Construction| # | Property Name | Units | Stories | Est. Completion | Developer || :--- | :--- | :--- | :--- | :--- | :--- || **1** | Harp's Landing Apartments | 398 | 4 | Nov 2027 | Gumenick Properties || **2** | The Russell | 388 | 5 | Dec 2026 | Greystar Real Estate Partners || **3** | 3200 W Moore St | 366 | 6 | Sep 2027 | Hoffman & Associates || **4** | 3 Notch'd Flats | 325 | 4 | Sep 2026 | Edward Rose & Sons || **5** | Regent at Regency | 314 | 5 | Sep 2026 | Thalhimer Realty Partners || **6** | MAA Rove | 306 | 5 | Oct 2026 | Mid-America Apartment Communities || **7** | Altitude on Main | 302 | 16 | Aug 2026 | RPC Realty Capital || **8** | Midlothian West | 275 | 3 | Jul 2027 | BWS Enterprises || **9** | Alexan Manchester | 260 | 5 | Sep 2027 | Trammell Crow Residential || **10**| 200 E Marshall St | 254 | 12 | Jan 2027 | SNP Properties |### Delivery & Absorption Forecast| Year | Deliveries | Net Absorption | Construction Ratio | Year-End Vacancy || :--- | :--- | :--- | :--- | :--- || **2026 YTD** | 1,035 | 1,587 | 0.7x | 8.3% || **2026 (Full Year)** | 3,031 | 3,080 | 1.0x | 8.6% || **2027** | 2,034 | 2,455 | **0.8x** | **8.1%** || **2028** | 2,147 | 1,886 | 1.1x | 8.2% || **2029** | 1,752 | 1,571 | 1.1x | 8.2% || **2030** | 1,855 | 1,721 | 1.1x | 8.2% |---## Investment Activity & Sales AnalysisTrailing 12-month sales activity reached **$835.3 million** across 46 transactions — well above the market's 10-year annual average of $382.2 million.### Recent Significant Sales Transactions| Property | Units | Yr Built | Sale Date | Price | Price / Unit || :--- | :--- | :--- | :--- | :--- | :--- || **Marshall Springs at Gayton West** | 420 | 2014 | Dec 2025 | $119,750,000 | $285,119 || **2000 West Creek Apartments** | 373 | 2018 | Jun 2026 | $115,000,000 | $308,310 || **Innsbrook Square** | 305 | 2023 | Feb 2026 | $81,700,000 | $267,868 || **Colony at Centerpointe** | 255 | 2016 | Jun 2026 | $74,600,000 | $292,549 || **Triton Glen** | 250 | 2023 | Dec 2025 | $65,000,000 | $260,000 || **The Boulders Lakeview** | 212 | 2023 | Jan 2026 | $51,500,000 | $242,924 || **Innslake Place** | 221 | 2020 | Feb 2026 | $51,250,000 | $231,900 |### Cap Rate Projections by Asset Class| Property Class | 2026 YTD | 2026 (Full Year) | 2027 | 2028–2030 || :--- | :--- | :--- | :--- | :--- || **4 & 5 Star** | 6.2% | 6.2% | 6.1% | 6.0–6.1% || **3 Star** | 6.4% | 6.3% | 6.3% | 6.2% || **1 & 2 Star** | 6.6% | 6.5% | 6.5% | 6.4% || **Overall Market** | **6.4%** | **6.3%** | **6.2%** | **6.2%** |---## Investment Outlook & Conclusion### Strengths* High median household income ($86,559) and tight regional unemployment (3.6%).* Long-term rent growth convergence upside due to the deep discount (-10.6% overall, -18.3% Class A) versus national averages.* Strong demand trajectory with 13 consecutive quarters of positive net absorption.### Risk Mitigation Strategies1. **Submarket Selection:** Focus on Western Henrico County and Midlothian for durable structural demand.2. **Conservative Lease-Up Assumptions:** Underwrite current vacancy rates through mid-2027.3. **Class Targeting:** Target stabilized 1–3 Star assets facing minimal new luxury construction competition.---### Author & Report MetadataThis market analysis was prepared by **Justin Ferguson**, First Vice President of Investments at **Marcus & Millichap**, utilizing data from CoStar Group *(licensed July 26, 2026)* and Oxford Economics.* **Market Coverage:** City of Richmond, Henrico County, Chesterfield County, Hanover County, Goochland County, Midlothian, Downtown Richmond, Western Henrico, South Richmond, Petersburg, and surrounding Richmond MSA submarkets.* **Report Date:** July 26, 2026 | **Next Update:** October 2026
