A medical office in Williamsburg has sold for $1.75 million.
320 Monticello LLC sold the 9,000-square-foot office building at 320 Monticello Ave. to Stellar Ventures LLC as an investment. The building is 100% leased and located directly across the street from William and Mary’s School of Education and Midtown Row apartments. Current tenants include a family counseling business, a massage/physical therapy business and an eyebrow service, Erik Conradi, an associate with Cushman & Wakefield | Thalhimer Capital Markets Group, told Virginia Business.
Conradi handled the sale negotiations on behalf of the seller.
Drew Harbrecht has joined Thalhimer as senior vice president and will lead Thalhimer Multifamily, the firm’s residential property services division.
He joins from Charleston, South Carolina-based Greystar Worldwide, where he led a management portfolio of nearly 10,000 units in Central Virginia and the Washington, D.C., Maryland and Virginia corridor. He will be based in Thalhimer’s corporate office in Glen Allen. A Radford University graduate who holds a bachelor’s degree in management and marketing, he previously worked in Richmond.
Harbrecht has more than 17 years of management experience and is active in the Urban Land Institute and has multiple industry accreditations, including with the Institute of Real Estate Management and the National Apartment Association.
“We are thrilled to welcome Drew Harbrecht as the new leader of Thalhimer Multifamily and as a member of the firm’s executive leadership team,” Lee Warfield, president and CEO of Cushman & Wakefield | Thalhimer said in a statement. “Drew brings an impressive depth of experience in the multifamily asset services and management world. From institutional-quality apartment communities to value-add assets, he knows what it takes to provide best-in-class service for clients, owners and residents. Under Drew’s leadership, Thalhimer is focused on expanding its multifamily portfolio and enhancing the visibility of our business capabilities. Drew’s leadership style supports a positive culture and a level of engagement that will inspire his entire team to perform at the highest level.”
Thalhimer Multifamily is a fully integrated property management firm handling acquisitions, dispositions, troubled asset turnaround, property operations and other related services. Its management portfolio includes more than 10,000 units in Virginia and North Carolina.
Glen Allen-based real estate company Capital Square has relocated to a new, expanded corporate headquarters in Henrico County’s Innsbrook area, not far from its original headquarters.
Capital Square has subleased the space at 4851 Lake Brook Drive in the Innsbrook Corporate Center until March 2028. The new office, which is 44,867 square feet, is more than double the size of its previous office, at 10900 Nuckols Road, also in Innsbrook.
The new office has multiple conference room configurations with a glass wall and garden views, an onsite classroom for training, updated technology, a full-service cafe, a fitness center with locker rooms, parking and other amenities.
“This workplace of the future for real estate professionals provides a sense of home, where team members can gather and brainstorm, with a positive impact on their careers and relationship with the firm. The new headquarters creates an upward spiral of success for all stakeholders,” Louis Rogers, founder and co-CEO of Capital Square, said in a statement.
Both Capital Square’s expanded development and in-house property management divisions will be housed in the space.
Since Rogers founded Capital Square in 2012, the firm has completed more than $7.5 billion in transaction volume.
Capital Square is a developer of multifamily properties and has been the largest developer of multifamily housing in Richmond’s Scott’s Addition neighborhood.
A 10,044-square-foot office and warehouse building in Norfolk sold Tuesday for $1.3 million.
The building, on 1.71 acres at 1301 Marsh St., was previously owned by Daughters Trust 3557. Piedmont Land Development bought the property, which is fully leased, as an investment. It is currently leased to Hepaco, an environmental cleanup company.
William C. Throne and Robert L. Phillips with Cushman & Wakefield | Thalhimer handled sale negotiations on behalf of the buyer.
A 20-unit apartment community in Botetourt County sold Tuesday for more than $2 million.
Located at 151 College Drive in Daleville, the property’s first buildings were built in the early 1900s as a school, which was later affiliated with Bridgewater College before closing in 1933, according to Cushman & Wakefield | Thalhimer. The Daleville College Apartments were renovated before the sale.
DCA Partners bought the property from Daleville College Partners for approximately $2.07 million.
Clay Taylor with Cushman & Wakefield | Thalhimer’s Markets Group represented DCA Partners in the purchase.
The economy in the Federal Reserve’s Fifth District (a multistate region including Virginia, North Carolina, South Carolina, West Virginia and Maryland) contracted slightly in recent weeks, according to the latest edition of the Federal Reserve’s Beige Book, released Wednesday.
Published eight times per year, the Beige Book is based on anecdotal information about economic conditions gathered from the 12 Federal Reserve Banks. It is compiled from reports by bank and branch directors, as well as information gathered from business contacts, economists, market experts and other sources. Wednesday’s release is an update from the Fed’s Sept. 6 report.
Here’s what the most recent Beige Book edition revealed about the direction the economy is taking:
Employment and wages in the Fifth District grew modestly over the previous few weeks. Companies reported continued trouble finding skilled workers, such as CDL drivers and motorcoach drivers. However, a staffing firm that specializes in executive-level marketers had too many candidates for the number of available jobs.
Prices continued to increase at an elevated rate, but growth was lower than this time last year. Manufacturers reported an unchanged growth in prices received and a slight increase in prices paid for nonlabor inputs. Services firms saw a marginal slowdown in prices received and a decline in nonlabor input prices. Labor costs for both continued to grow.
Manufacturers in the Fifth District reported mixed results, and several cited macroeconomic factors, like fears of a potential recession, as reasons for slowdowns. A gaskets manufacturer reported it was halting hiring, citing fears of a potential economic downturn. A fabric manufacturer said consumer demand declined because retailers had too much inventory, while a steel manufacturer reported strong demand during the same period.
Fifth District ports reported weak demand. Imports were lower both year-over-year and month-over-month, mainly because fewer consumer goods were coming into port. Export volume remained flat, however. Container dwell times returned to normal.
Trucking firm respondents said demand was flat this reporting period, but several trucking companies shut down, allowing carriers to slightly raise freight rates as they exited and reduced market capacity. Companies did not see the normal seasonal uptick this period.
Consumer spending in the district grew slightly, but spending growth varied by category. Food service, grocery stores and office supply stores reported steady or increased sales, while furniture, appliance and home remodeling and repair stores reported declining sales.
Travel and tourism activity slowed slightly this period, partly because of a typical seasonal shutdown and partly because of the threat of hurricanes in coastal destinations, according to respondents. Business travel picked up, helping to offset the reduced leisure travel.
Elevated prices, a lack of inventory and high mortgage rates constrained home sales in recent weeks, and the number of new listings in the Fifth District was down year-over-year. Days on the market increased slightly. Home prices held steady, although some were reduced for homes that had been on the market for more than 30 days.
Commercial real estate development and construction reduced significantly. The availability of credit and cost of capital were the main barriers to projects moving forward, as credit underwriting requirements tightened. Industrial and retail leasing demand continued to outstrip supply, escalating rents.
In the financial sector, loan demand continued to slow, primarily in consumer and commercial real estate portfolios. Banks struggled to maintain deposits.
Nonfinancial services providers reported stable demand and revenues. In terms of labor, applicant pools grew but remained under historical norms, and wage pressure continued.
Bill Goggins, senior vice president and Virginia division manager of Raleigh, North Carolina-based Clancy & Theys Construction, will retire at the end of the year, the company announced Tuesday.
Based out of the company’s Virginia office in Newport News, Goggins has been with Clancy & Theys for nearly 30 years. Chad Cowger, vice president and project executive, will succeed Goggins.
In his time with Clancy & Theys, Goggins has overseen some of the firm’s largest Virginia projects, including Dollar Tree’s Chesapeake headquarters, Norfolk’s Wells Fargo Center and the Sandler Center for the Performing Arts in Virginia Beach. Goggins joined the company in 1994, five years after it opened its Virginia office, growing the office from just a handful of employees to more than 80, while the company grew to more than 400.
“Bill has left an invaluable mark on the Virginia division and Clancy & Theys as a whole. His leadership, steadfast work ethic and vast construction knowledge have been the foundation for the Virginia office’s success since he took over the division in 2007,” Baker Glasgow, president of Clancy & Theys, said in a statement. “At the beginning of his leadership, Bill was dealt an impossible hand with the onset of the 2008 financial crisis. However, through hard work and perseverance, Bill led the office to brighter pastures that awaited on the other side.”
Goggins serves on several boards, including Old Dominion University’s Civil Engineering Technology Advisory Committee, ODU’s Coastal Resilience Committee, the Associated General Contractors of Virginia’s legislative committee and the executive board of the Colonial Virginia Council of the Boy Scouts of America.
The developer of an estimated $80 million apartment building in Chesterfield County’s Springline at District 60 mixed-use development broke ground at the site on Sept. 28.
The James at Springline will have 298 apartments and 28,000 square feet of ground-level retail space. Connecticut-based Collins Capital Partners is the lead developer. The project is scheduled for a 2025 completion.
The development will have office pods, a conference area, fireplaces, an interior courtyard with pool and lounge areas, a roof deck with a fitness center and garage parking.
The project is part of the $210 million, 42-acre first phase of the county’s Springline at District 60 development, located on Midlothian Turnpike off Chippenham Parkway. Chesterfield County cleared the way for development in March by starting demolition on the former Best Products building in what was the Spring Rock Green shopping center.
“We’re thrilled that [The James at Springline’s] groundbreaking marks the beginning of an exciting new mixed-use development in Chesterfield that will offer residents an opportunity to live, work, shop and play in one place,” Collins Capital Partners Managing Principal Art Collins said in a statement.
The first phase will also include a 150,000-square-foot office building, a sports entertainment and tournament venue, a specialty grocery store and a parking garage, and the center will be an open space that can host concerts, markets, festivals or other events.
The Chesterfield Economic Development Authority bought the land from Bond Cos. in 2021 for $16 million, and the county board of supervisors approved the development plan in April 2022. At the time of rezoning in 2022, the initial development cost estimate for the overall project was $675 million, according to a project spokesperson.
Remaining phases are still in planning stages. As of March, the county expected to have 1,200 residential units total, split between apartments and townhouses, and plans to add another office building, an extended-stay hotel, entertainment venues and a police station.
The Port of Virginia continues to drive commercial real estate activity in Hampton Roads as shipping and logistics companies seek footholds. The region’s office vacancy rate rose this year — from 8.1% at the end of the first quarter to 8.4% at the end of the second quarter — but is “relatively healthy compared to similar-sized markets,” according to Cushman & Wakefield | Thalhimer’s MarketBeat office market reports.
That’s largely because of a lack of new inventory, which is also driving rents up. But although the region’s office market reflects a lack of supply, its industrial real estate market is booming from new demand for warehouse space, driven by proximity to the port.
At the end of the second quarter, industrial leasing prices were up 25.3% year-over-year and have risen 9% since the start of 2023, with a 2.3% vacancy rate, Thalhimer reports.
Although the first quarter saw a slight slowdown in activity because of rising interest rates, demand for warehouses of 200,000 square feet increased as summer ended and interest rates stabilized, says Geoff Poston, a senior vice president with Thalhimer.
For local users such as HVAC suppliers, the market for warehouses of 20,000 to 50,000 square feet has stayed competitive, mainly because new development is focused on bigger warehouses.
“Our market [is] really a tale of two different worlds,” Poston says, now that shifting trade patterns have put the port — and Hampton Roads — on the national stage.
Leaders of a regional engineering firm figured finding office space in the Town Center of Virginia Beach would be a breeze. Newspapers were reporting that demand for offices was down nationally.
But that isn’t the case in the Hampton Roads area, where the office vacancy rate was 8.1% for the first quarter of 2023, according to a report by Cushman & Wakefield | Thalhimer. That’s about half the national average of 16.1%, and in some markets, the vacancy rate has hovered around 30%.
“It’s not that there’s not available inventory, it’s that what they want has already been snapped up because everyone wants the same kind of space,” says Rob Wright, a senior vice president at Cushman & Wakefield | Thalhimer in Virginia Beach who’s helping the firm — whose name he’s keeping private — find a location.
The pandemic upended employees’ expectations of working 9 to 5 in an office, and executives have found they need to provide the right incentives and environment so their staff sees a reason to come to the office, he says. They want them to be collaborative, see the benefits of teamwork and then be able to walk someplace nearby for lunch or an afterwork drink.
“Dollar Tree did that at the Summit Pointe project when they merged with Dollar General,” says Wright. “Their CEO basically said, ‘If we’re going to stay in Chesapeake, Virginia, we’re going to build a city within a city. We’re going to build perks for our employees. We’ve got to have space for them to have multifamily apartments right there on our campus. We want to have the best restaurants on our campus, the best entertainment venues and breweries.”
That decision has paid off — Summit Pointe’s two high-rise office buildings, one of which is Dollar Tree’s headquarters, are filled, and tenants are paying some of the highest rents in the Hampton Roads area, Wright says. A third office building is planned.
Guesswork on leasing
Reflecting nationwide patterns, Class A office space in newer commercial developments like Town Center in Virginia Beach and City Center at Oyster Point in Newport News is in high demand across Hampton Roads. But older buildings with Class B or C office space? Not so much. Besides retail and restaurants, office workers also want free, easy-to-find parking, Wright notes.
“I think what we’re seeing in this modified, nontraditional, not-9-to-5 world is that when people have to pay for parking, there is less motivation to go into the office,” Wright says. “There’s just some sticking point of not wanting to go and formally pay for parking versus when you have free parking. Maybe you feel better about popping in for a short workday.”
Downtown Norfolk, along with Hampton, are the softest submarkets in the Hampton Roads area. Besides parking challenges, a major factor is “large blocks of functionally obsolete build-outs” that are unappealing, according to Cushman & Wakefield | Thalhimer’s report.
Wright says it’s difficult right now for executives who have to make long-term decisions about leasing office space without a crystal ball to predict what their needs may be a decade from now.
“I don’t think we’re seeing dramatic reductions in overall square footage requirements,” he says. “What I have noticed is national companies with offices around the country have changed their requirements more than regional and local companies have.”
Some national companies have left the area, while others, such as Norfolk-based Sentara Health, have expanded, Wright says. “Whenever we’ve had these bigger blocks of square footage come up, there has been backfill occupiers grabbing them up, so that’s a good sign for the overall market.”
Lowe’s is expected to open its 1.5 million-square-foot regional distribution center in Suffolk’s Virginia Port Logistics Park in the third quarter, says Lang Williams with Colliers. Photo by Mark Rhodes
Port-driven industrial
As for the industrial market in Hampton Roads, it’s remained healthy thanks to the Port of Virginia, an economic driver for the entire state. Amid heavy demand for imports during the pandemic and delays at other U.S. ports over the past two years, many retailers located logistics presences in Norfolk and surrounding localities, says Geoff Poston, senior vice president of Cushman & Wakefield | Thalhimer’s industrial group.
For the first quarter of 2023, industrial real estate had a 2% vacancy rate. “When all the ports across the country were backed up, we were the most efficient port,” Poston says. “Retailers were like, we can’t get into L.A. or Long Beach, we can’t get into New York. Let’s go to Norfolk. They don’t have any issues.”
In 2022, the Port of Virginia processed more than 3.7 million 20-foot equivalent units (TEUs) at its terminals, setting a record. Cargo movement and handling has resulted in higher demand for industrial space near the port’s terminals from distributors and third-party logistics companies.
Amazon.com, for example, built a 3.8 million-square-foot robotic fulfillment center in Suffolk and a 650,000-square-foot processing center in Chesapeake. In June, two industrial warehouses in Chesapeake sold for $24 million, and they’re fully leased to tenants that include Fortune 500 government contractor CACI International and third-party logistics firm Kalman & Co. Since July 2020, 79 companies have announced plans to establish manufacturing and distribution presences in Virginia, investing nearly $4 billion, according to an April 2023 study conducted by William & Mary.
TradePort Logistics, for example, fully leased and moved into Northbridge’s new 334,800-square-foot Chesapeake Logistics Center in May, says Lang Williams, a
Norfolk-based senior vice president with Colliers. TradePort has plans to construct a purpose-built transload facility near the Port of Virginia in the coming months.
Two other projects expected to open in Suffolk in the third quarter of this year are Lowe’s 1.5 million-square-foot regional distribution center in the Virginia Port Logistics Park and the 227,000-square-foot distribution facility that Los Angeles-based Industrial Realty Group (IRG), one of the largest real estate developers in the nation, is building on 40 acres in Suffolk. It will be fully leased to RoadOne IntermodaLogistics, a national intermodal, warehouse and logistics services company.
IRG is also working on two build-to-suit facilities in Suffolk and Portsmouth, totaling 1 million square feet, for Unis, a third-party fulfillment and transportation company.
Companies are willing to locate near the port — and even a bit further away from the terminals — because it’s a fairly sure bet, given the port’s investment of about $1.4 billion to expand its overall capacity and cargo handling capabilities. This includes dredging the harbor to 55 feet so it can accommodate two ships at a time, “which is a game changer,” Poston says.
Demand is so high, Williams adds, that developers are starting to look to places along Interstate 64 like New Kent County, where AutoZone has broken ground for an 800,000-square-foot facility, and James City County, where Green Mount Logistics Center is expected to have a 373,536-square-foot Class A spec distribution facility ready in the fourth quarter of this year.
“So, we’re excited,” Williams says, “because we’re going to have more options for these companies to lease, which will be good.”
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