Why Is Virginia Beach One of the Most Compelling Commercial Real Estate Markets on the East Coast?
Virginia Beach stands as the largest city in Virginia by population and one of the most diversified commercial real estate markets in the Mid-Atlantic region. With approximately 455,000 residents and a Hampton Roads metro area population of around 1.5 million, the city offers investors a rare combination of military economic stability, a tourism economy generating roughly $3.9 billion in annual impact, and a growing cybersecurity and technology corridor that is attracting national attention.
The fundamentals paint a picture of a market with multiple demand drivers operating simultaneously. Tourism supported approximately 34,076 jobs in 2024 and drew around 14.3 million visitors to the city. The military presence, anchored by NAS Oceana, Joint Expeditionary Base Little Creek-Fort Story, and nearby Naval Station Norfolk (the world's largest naval base), contributes more than $15.4 billion in direct economic impact across the Hampton Roads region annually. The cybersecurity sector is expanding rapidly, with Virginia leading the nation in cybersecurity employment and defense contractors like BAE Systems, General Dynamics, and Lockheed Martin maintaining significant operations in the area.
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Commercial real estate performance across Hampton Roads reflects this economic diversity. Retail vacancy tightened to approximately 3.9% by Q3 2025, with Virginia Beach capturing around 30% of all regional leasing activity. The office market posted 131,000 square feet of positive net absorption in Q4 2025, bringing vacancy to 12.8%. Industrial rents grew roughly 3.2% year-over-year to $10.30 per square foot, and the multifamily market settled at around 5.2% vacancy with average asking rents of $1,644 per month.
For investors and developers evaluating commercial loan programs, Virginia Beach's combination of military stability, tourism revenue, infrastructure investment, and technology sector growth creates a compelling case for capital deployment across multiple property types.
What Are the Key Submarkets for Commercial Investment in Virginia Beach?
Virginia Beach's commercial real estate landscape spans a diverse set of submarkets, each shaped by distinct economic drivers, tenant profiles, and investment characteristics. Understanding these submarkets is essential for borrowers structuring loan applications and identifying the right opportunities.
Town Center and Pembroke represent Virginia Beach's de facto downtown and the most significant mixed-use development in the Hampton Roads region. The City of Virginia Beach has invested approximately $200 million, while Armada Hoffler and partners have contributed around $500 million to create a 17-block, pedestrian-friendly district featuring Class A office space, luxury apartments, upscale retail, and cultural venues. The adjacent $200 million Pembroke Mall redevelopment is adding a seven-story hotel, 272 apartments, and public parking, further cementing this area as the commercial core of Virginia Beach.
Oceanfront and Resort Area drive Virginia Beach's tourism economy. The $335 million Atlantic Park project, backed by Pharrell Williams's Venture Realty Group, is transforming the oceanfront with new restaurants, shops, more than 300 multifamily homes, office space, a 70,000 square foot entertainment venue, and a surf park. Parking garages for the project opened in 2025, with the full development progressing through 2026. The city's $47 million beach replenishment project and 17th Street Boulevard improvements signal long-term infrastructure commitment to the resort corridor.
Lynnhaven is one of Virginia Beach's strongest retail submarkets, anchored by Lynnhaven Mall and surrounding commercial corridors. Retail vacancy in this area runs well below the regional average of 3.9%, and properties along Lynnhaven Parkway command strong tenant demand. The $8.6 million sale of Lynnhaven Square, a fully leased retail center, illustrates investor confidence in this submarket.
Hilltop serves as an established suburban commercial node with a mix of retail, dining, and professional office tenants. The Hilltop area benefits from high household incomes and residential density, making it attractive for medical office, specialty retail, and service-oriented businesses.
Corporate Landing and Dam Neck Corridor cater to defense contractors, technology firms, and government-adjacent businesses. Proximity to NAS Oceana and the Dam Neck Annex creates demand for flex space, secure office environments, and specialized industrial facilities. The cybersecurity corridor continues to expand here, driven by federal contracts and the region's concentration of cleared defense workers.
I-264/I-64 Corridor connects Virginia Beach to Norfolk and the broader Hampton Roads metro, making properties along these routes attractive for logistics, distribution, and office tenants who serve the regional market. The Newtown Road area near the I-264 interchange benefits from light rail access and ongoing multifamily development.
Borrowers exploring opportunities across these submarkets can use our commercial mortgage calculator to model financing scenarios for specific properties and locations.
What Types of Commercial Loans Are Available in Virginia Beach?
Virginia Beach's lending environment offers a full spectrum of commercial financing options, supported by the region's economic diversity and the strong institutional presence of military and tourism demand drivers. Understanding which loan programs align with your investment strategy is critical to securing competitive terms.
Conventional Commercial Mortgages remain the primary financing vehicle for stabilized properties. Rates start at approximately 5.23% for five-year terms, with LTV ratios of 65% to 75% and amortization periods of 15 to 25 years. Local and regional banks with Hampton Roads market expertise often provide the most competitive terms for borrowers with established relationships.
SBA Loans serve owner-occupants looking to purchase or renovate commercial property. The SBA 504 program provides up to 90% financing with fixed rates, ideal for medical practices, restaurants, professional firms, and defense contractors establishing a presence near NAS Oceana or Corporate Landing. SBA 7(a) loans offer flexibility for working capital and mixed-use acquisitions.
Bridge Loans fill the gap for transitional properties and value-add acquisitions. Hampton Roads bridge lenders offer 12 to 36 month terms at 7% to 14%, with leverage up to 75% to 80% of as-is value. Bridge financing is particularly active for hospitality conversions near the Oceanfront and repositioning of older retail centers throughout Virginia Beach.
DSCR Loans have gained traction among Virginia Beach investors for multifamily and mixed-use properties. DSCR loans underwrite based on property cash flow rather than borrower income, with most lenders requiring a minimum 1.20x to 1.25x ratio. The strong rental demand generated by military families and tourism workers makes Virginia Beach particularly well-suited for DSCR-qualified investments.
CMBS and Life Company Loans provide non-recourse financing for larger transactions ($5 million and above) with fixed rates and 7 to 10 year terms. Construction Loans finance ground-up projects at 7% to 10%, requiring 25% to 40% equity and documented development experience.
Contact Clearhouse Lending to discuss which loan program best fits your Virginia Beach investment strategy and property profile.
How Does the Military Presence Drive Commercial Real Estate Demand in Virginia Beach?
Virginia Beach's military installations serve as one of the most powerful and stable economic engines in the entire Mid-Atlantic region. Unlike tourism or technology, defense spending provides a level of demand consistency that insulates the local commercial real estate market from typical economic cycles.
NAS Oceana is the Navy's East Coast master jet base, home to F/A-18 Hornet and Super Hornet squadrons and employing approximately 11,000 military and civilian personnel. Joint Expeditionary Base Little Creek-Fort Story supports amphibious operations, special warfare units, and training activities across its waterfront campus. Together with the Dam Neck Annex and nearby Naval Station Norfolk, these installations create an economic ecosystem that extends far beyond the base gates.
The Navy's direct economic impact exceeds $15.4 billion annually across the Hampton Roads region, and more than $15 billion in federal contracts and grants flow to the area each year, with approximately 90% originating from the Department of Defense. The proposed 2026 National Defense Authorization Act includes $380 million for privatized Navy barracks at installations throughout Hampton Roads, $188.6 million for dry dock modernization at Norfolk Naval Shipyard, and $15 million for pier upgrades to support next-generation aircraft carriers.
This military spending translates directly into demand for commercial real estate. Defense contractors need office and flex space near base facilities. Military families create consistent rental demand for multifamily housing. Base personnel support retail, dining, and service businesses throughout Virginia Beach. And the security clearance requirements of many defense positions create a workforce that tends to remain in the region long-term, providing stability that few other demand drivers can match.
Borrowers financing properties near military installations can explore bridge loan options for acquisitions requiring repositioning or value-add strategies.
How Is Virginia Beach's Tourism Economy Shaping Commercial Investment?
Tourism represents one of Virginia Beach's two anchor economic pillars alongside the military, and the sector's performance directly fuels demand for hospitality, retail, restaurant, and mixed-use properties throughout the Oceanfront and beyond.
Virginia Beach welcomed approximately 14.3 million visitors in 2024, a 1.9% increase from the prior year, generating roughly $3.9 billion in total economic impact. Tourism supported around 34,076 jobs, representing approximately 19% of all local employment. The sector generated roughly $340.8 million in state and local tax revenues, reducing annual taxes for each Virginia Beach household by approximately $1,832.
Nearly $1.1 billion was spent on food and beverages alone, with lodging accounting for around 27% of overall visitor expenditures. Day visitors made up approximately 59% of total visitation, indicating strong regional draw from the broader Hampton Roads metro and surrounding states.
The $335 million Atlantic Park development at the Oceanfront represents the most significant tourism investment in Virginia Beach's recent history. Phase I includes new restaurants, shops, experiential attractions, more than 300 multifamily homes, office space, a 70,000 square foot entertainment venue, and a 2.67-acre Wavegarden Cove surf park. This project, combined with the city's ongoing beach replenishment efforts and the 17th Street Boulevard infrastructure improvements, signals a long-term commitment to transforming the Oceanfront from a seasonal beach destination into a year-round entertainment district.
For investors considering hospitality and tourism-adjacent properties, understanding the seasonal dynamics is critical. Summer months from June through September generate the bulk of visitor spending, while the shoulder seasons and winter months require properties that can attract local and regional patrons. Properties near the Oceanfront that serve both tourists and year-round residents typically achieve the most stable performance.
Use our commercial bridge loan calculator to evaluate short-term financing for Oceanfront property acquisitions.
What Role Does the Cybersecurity and Tech Corridor Play in Virginia Beach's CRE Market?
Virginia Beach's technology sector, particularly its cybersecurity corridor, represents the city's fastest-growing economic driver and an increasingly significant source of commercial real estate demand.
Virginia leads the nation with approximately 20,000 more cybersecurity positions than any other state, and the industry is projected to grow roughly 28% by 2026. Virginia Beach benefits directly from this trend, with major defense contractors including BAE Systems, General Dynamics, and Lockheed Martin maintaining significant cybersecurity operations in the area. The city offers ultra-high-speed subsea cable infrastructure, access to federal defense operations, and a pipeline of trained talent from Old Dominion University, Norfolk State University, and Tidewater Community College.
Entry-level cybersecurity positions in Virginia Beach offer salaries ranging from approximately $70,000 to $115,000, while senior roles in software engineering and data engineering command salaries approaching $200,000. This high-wage employment base creates demand for Class A office space, particularly in Corporate Landing and the I-264 corridor, as well as premium multifamily housing throughout the city.
The technology sector's growth is diversifying Virginia Beach's economy beyond its traditional military and tourism pillars. As remote work patterns evolve and more tech companies recognize the advantages of the Hampton Roads region, including lower costs than Northern Virginia, proximity to military clients, and quality of life, commercial real estate demand from this sector is expected to accelerate through the remainder of the decade.
For borrowers considering investments in tech-oriented office and flex space, permanent loan programs work well for stabilized assets with established technology tenants. Use our DSCR calculator to evaluate whether the property's cash flow supports debt service requirements.
What Are Current Commercial Mortgage Rates and Terms in Virginia Beach?
Commercial mortgage rates in Virginia Beach reflect broader national trends while incorporating the regional dynamics of the Hampton Roads market. As of early 2026, borrowers can access competitive financing across multiple loan programs, though rates vary significantly based on property type, borrower strength, and loan structure.
The lending environment in Hampton Roads has become more nuanced. Lenders view Virginia Beach favorably due to the stability provided by military spending and the diversity of the local economy. Multifamily properties receive the most competitive terms, with apartment loan rates starting at approximately 5.11% for agency-backed financing. Retail properties benefit from the region's tight 3.9% vacancy, which gives lenders confidence in cash flow stability. Industrial assets attract competitive financing given the growing logistics and distribution demand.
Office lending is more selective, reflecting the 12.8% vacancy rate across the Hampton Roads market, though Virginia Beach's office performance, particularly in the Town Center submarket, outperforms the regional average. Borrowers seeking office financing should expect lower leverage (55% to 65% LTV) and higher rates than multifamily or retail equivalents.
Construction lending is available for well-capitalized developers with demonstrated experience, particularly for projects in designated Strategic Growth Areas like Pembroke/Town Center, the Oceanfront, and Burton Station. The city's form-based zoning code in the Central Business District facilitates mixed-use development that lenders find attractive due to diversified income streams.
How Should Borrowers Approach the Virginia Beach Commercial Loan Process?
Securing a commercial loan in Virginia Beach requires understanding local lender preferences, preparing comprehensive documentation, and matching your property profile with the right financing program.
Virginia Beach's lending community includes national banks, regional community banks such as TowneBank and Atlantic Union Bank, credit unions, CMBS conduits, and private lenders. Borrowers with established local banking relationships often find more competitive terms and faster execution than national platforms, particularly for loans under $10 million.
Prepare a complete loan package including a current rent roll, trailing 12-month operating statements, property condition reports, environmental assessments (Phase I at minimum), and a personal financial statement. For Virginia Beach-specific underwriting, lenders evaluate property location relative to military installations, tourism corridors, and the I-264/I-64 transportation network, along with flood zone considerations for properties near the coast or inland waterways.
Timeline expectations vary by loan type: bridge loans close in 14 to 30 days, conventional bank loans in 45 to 75 days, CMBS loans in 60 to 90 days, SBA loans in 60 to 120 days, and construction loans in 90 to 120 days. Virginia Beach properties in flood zones may require additional documentation and insurance coverage that can extend timelines by one to two weeks.
Contact Clearhouse Lending to begin the pre-qualification process for your Virginia Beach commercial property and receive personalized rate quotes.
What Do Borrowers Most Often Ask About Virginia Beach Commercial Loans?
What are current commercial mortgage rates in Virginia Beach?
Commercial mortgage rates in Virginia Beach start as low as approximately 5.23% for conventional financing on stabilized properties. Apartment loan rates start at around 5.11% through agency programs. Bridge loans range from 7% to 14%, and SBA 504 loans offer fixed rates starting around 5.5% to 6.5%. Actual rates depend on property type, borrower creditworthiness, loan-to-value ratio, and debt service coverage. Multifamily and retail properties with strong occupancy generally receive the most competitive rates in the Hampton Roads market.
What is the minimum down payment for a Virginia Beach commercial property?
Minimum down payments for Virginia Beach commercial properties range from 10% to 35% depending on the loan program. SBA 504 loans require as little as 10% down for owner-occupied properties. Conventional commercial mortgages typically require 25% to 35% down (65% to 75% LTV). Bridge loans require 20% to 30% down. DSCR loans generally require 20% to 25% down. Lenders may require additional equity for properties in flood zones or for borrowers with limited commercial real estate experience.
How does the military presence affect commercial property values in Virginia Beach?
The military presence in Virginia Beach serves as an economic stabilizer that supports commercial property values across the market. NAS Oceana, Joint Expeditionary Base Little Creek-Fort Story, and nearby Naval Station Norfolk generate more than $15 billion in annual economic impact across Hampton Roads. This spending creates consistent demand for office, flex, retail, and multifamily properties. Defense contractors cluster near base facilities, military families maintain strong rental demand, and the security-clearance workforce tends to remain in the region long-term. Lenders view military-adjacent markets favorably due to this demand stability.
What impact does tourism have on commercial lending in Virginia Beach?
Virginia Beach's $3.9 billion tourism economy supports approximately 34,076 jobs and generates around $340.8 million in tax revenue. Lenders evaluate tourism-dependent properties, particularly hospitality and Oceanfront retail, with attention to seasonal revenue patterns and year-round occupancy potential. Properties that demonstrate strong off-season performance receive more favorable terms. The $335 million Atlantic Park development and ongoing infrastructure investments signal long-term confidence in the Oceanfront market.
Are there special financing considerations for coastal properties in Virginia Beach?
Yes, properties in Virginia Beach's coastal zones face additional financing requirements. Federal flood insurance through NFIP is mandatory for properties in FEMA-designated flood zones, and lenders may require excess flood coverage for higher-value properties. Flood insurance costs have risen under FEMA's Risk Rating 2.0 methodology, which affects operating expense projections and debt service coverage calculations. Properties in the Oceanfront and inland waterway areas should budget for these costs in their underwriting. The city's ongoing beach replenishment and stormwater infrastructure investments help mitigate long-term flood risk.
How long does it take to close a commercial loan in Virginia Beach?
Closing timelines vary by loan type. Bridge loans close in 14 to 30 days. Conventional bank loans require 45 to 75 days. CMBS loans take 60 to 90 days. SBA loans require 60 to 120 days. Construction loans take 90 to 120 days due to additional documentation requirements. Properties in flood zones or with environmental considerations may add one to two weeks. Borrowers can accelerate timelines by preparing complete packages before submitting applications, including current financials, rent rolls, Phase I environmental assessments, and flood zone documentation.
How Can You Position Your Virginia Beach Commercial Investment for Success?
Virginia Beach's commercial real estate market offers a distinctive combination of military economic stability, tourism revenue, technology sector growth, and strategic coastal location that creates compelling opportunities for investors and developers across every property type. The city's military installations provide recession-resistant demand that few markets in the country can match. Tourism's $3.9 billion annual impact fuels hospitality, retail, and mixed-use investment. The growing cybersecurity corridor adds a high-wage employment base that supports premium office and multifamily demand. And the city's $700 million Town Center investment, $335 million Atlantic Park project, and ongoing infrastructure improvements demonstrate a commitment to long-term growth.
The lending environment rewards borrowers who approach the market with realistic expectations, thorough documentation, and a clear understanding of how Virginia Beach's unique economic drivers affect their specific property type and submarket. Whether you are acquiring a multifamily property near NAS Oceana, financing a retail center in Lynnhaven, or exploring mixed-use development in the Town Center growth corridor, the right financing structure can significantly impact your investment returns.
Contact Clearhouse Lending to connect with lenders who specialize in Virginia Beach commercial real estate financing and receive customized rate quotes for your next Hampton Roads investment.