THE ROANOKE REGION OF VIRGINIA

Once known as a railroad town, Roanoke is gaining mileage these days as a competitive business location. With a vibrant arts scene, new medical school and the continuing redevelopment of its downtown, the profile of this mountain community is rising.

In fact, the Roanoke region landed a national accolade in October. It was this year’s top pick from among 250 metropolitan statistical areas by Business Facilities, a national publication for site selectors and economic development. The magazine’s editors extolled the area’s low unemployment (7.1 percent compared to a national rate of 10.2 percent), rising home prices and diversifying economy as proof that it’s “positively pointing in the right direction.”

That kind of exposure is a big plus in the marketing of the region’s commercial real estate market. As Virginia’s fourth largest metropolitan area, the Roanoke region came through the recession pretty well. “Roanoke is insulated, to some degree, from the vast swings the economy sees,” says Bob Copty, a senior vice president in Thalhimer’s Roanoke office. While the region experienced some closings, its core industries of health care, automotive components and advanced manufacturing remained intact.

The region’s only Fortune 500 company, Advance Auto Parts Inc., continues to invest in the area. It plans to spend more than $4 million expanding its corporate headquarters at Crossroads Corporate Business Center in Roanoke. The move will allow the company to consolidate two locations into one, with 900 employees expected to work eventually out of the new office.

Overall, Copty describes demand for market office space as “surprisingly robust.” The region had a vacancy rate of 11.3 percent by the end of the third quarter, according to Thalhimer’s market report, well below the national rate of 13 percent. One success story can be found in the neighboring New River Valley, home to Virginia Tech and its Corporate Research Center (CRC).

As businesses spin out from research enterprises in the park, the area is benefiting, says Jeanne Stosser, president and CEO of GMC Leasing and owner of SAS builders. “It’s a great feeder spot,” she says.

The CRC includes 27 buildings with 140 tenants and 2,200 employees. It plans to roughly double its size with the help of a $1.9 million federal grant, which will cover much of the infrastructure costs. Research and businesses there now focus mostly on high-tech fields such as biotechnology, engineering and design through partnerships with Virginia Tech, a top 50 research university.

Northrop Grumman, the country’s second largest defense contractor, opened an office in October and already is talking about a second one. It plans to work with the university’s college of engineering on research contracts, nuclear engineering and alternative energy.

Not doing as well is the area’s industrial market. Some automotive related businesses, such as Johnson Controls and JTEKT of Botetourt County, have announced closings due to a slowdown in the industry. By the third quarter, overall vacancy in the industrial/flex market hit nearly 15 percent, according to the Thalhimer report. Buffering that spike was the recent opening of LiteSteel Technologies’ new North American plant in Botetourt. The Australian company built a $30 million facility that eventually will employ 55 people.

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