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Tag: commercial real estate

Pembroke Square scales back some parts of project

Pembroke Square, the $200 million redevelopment of Pembroke Mall in Virginia Beach, is moving forward but at a smaller scale, according to the president of Pembroke Realty Group.

Pembroke Square Associates LLC first announced plans for the redevelopment of the aging mall’s 54 acres in November 2021, with groundbreaking for its first phase having taken place in December 2022. Workers started demolition on the former SunTrust Bank building last week. The bank building, at the entrance to the property on Virginia Beach Boulevard, is being demolished to make way for apartments, retail space, a hotel and a senior living community.

However, the hotel will now be seven stories instead of 14 and will be a single-branded Hilton, instead of a dual-branded hotel, Ramsay Smith, asset manager for Pembroke Square Associates and president of Pembroke Realty Group, told Virginia Business on Monday. The hotel was originally slated to be one of the first Tempo/Homewood Suites by Hilton.

The scaling back is due to escalation of construction costs, as well as higher interest rates and labor costs, Smith said. This part of the project is under redevelopment and redesign, and they hope to start construction in the third or fourth quarter of 2024, he added.
The situation is similar with the multifamily luxury apartment community, phase three of the project. Instead of 12 stories, it will be seven stories, but the number of apartments has not been determined because this project also is being redesigned. A parking garage will be beside the apartments, instead of beneath it. Construction will likely start in the fourth quarter of next year.
Work continues on Aviva, the seven-story, 153-unit senior living community, in partnership with Beth Sholom Village, which is scheduled to open in September or October 2024. The community will have 121 independent units, 20 assisted living units and 12 memory care units, and work has started on the second level, Smith said.

A fourth phase is planned, but details are scarce. Smith mentioned plans to begin demolishing the interior part of the mall later this year to prepare for an entertainment venue behind Latitude Climbing + Fitness, but developers are now working with the unannounced tenant on plans.

Meanwhile, exterior tenants, including Kohl’s, Latitude Climbing + Fitness, DSW and other retailers, are still open for business.

“We’re a little behind in terms of schedule, but overall, it’s the uses that matter,” Smith said. “We still have the right use mix.”

He added that the development team is looking to potentially construct a build-to-suit office “or some other use that will be complementary.”

Breeden finishes projects in Albemarle, Chester, Petersburg

The Breeden Co. has completed construction on an 10-building apartment community in Albemarle County and has broken ground on a Virginia Beach apartment complex, and its subsidiary, Breeden Construction, has finished apartment communities in Chester and Petersburg.

Completed in June, Berkmar Landing apartments in Albemarle has 261 units: 53 one-bedroom units, 172 two-bedroom apartments and 36 three-bedroom units. About 94% have been rented, according to the company.

Construction on the $54.6 million project began in December 2020. It’s the first Breeden property in the Charlottesville area and is located at 1100 Monacan Lane.

In Virginia Beach, the developer broke ground earlier this month on Ascend at Hilltop, a $46 million multifamily project. Breeden Construction is the general contractor on the project and Breeden’s property management division will manage it once construction is finished.

Located off Laskin Road, the community will have 115 two- and three-bedroom apartments, ranging from 1,128 square feet to 1,416 square feet. The first units are expected to be completed in fall 2024.

Breeden Construction finished work on The Station, a luxury apartment community at 4101 Runner Loop in Chesterfield County that it served as general contractor on. The $27.5 million project began in March 2021 and has five buildings with 65 one-bedroom apartments, 126 two-bedroom units and 10 three-bedroom apartments, all ranging from 650 square feet to 1,300 square feet. The complex also has a 4,000-square-foot clubhouse, pool with cabanas and outdoor fireplace and grilling station.

In May, Breeden Construction finished a $16.8 million affordable housing project in Petersburg for the Petersburg Redevelopment and Housing Authority. Construction began in 2021 at the community located at 37 Slagle Ave.

Pin Oaks Estates has six buildings, with 98 one-, two-, three- and four-bedroom apartments, along with a clubhouse, on-site management office, a fitness center and computer lab.

Ninety-two of the original 150 apartments in the complex were demolished to make way for the new ones.

 

Warehouse portfolio in Chesapeake sells for $24M

The Port of Virginia Distribution Center, a two-building, 334,881-square-foot industrial portfolio in Chesapeake, has changed hands.

Chesapeake Industrial Park LLC acquired the property at 2620-2626 Indian River Road for $24 million, according to Cushman & Wakefield | Thalhimer, which represented the seller. Phoenix Chesapeake Industrial Investors LLC was the previous owner, according to Chesapeake property records. Phoenix purchased the property in 2018 for $8,825,000.

The buildings are located on 11.28 acres near the Elizabeth River and are 100% leased to five tenants, including Fortune 500 government contractor CACI International Inc., defense contractors with ties to a nearby Navy base, third-party logistics firm Kalman & Co. and a food distribution company.

Sale negotiations were handled by Bo McKown and Eric Robison, both of Cushman & Wakefield | Thalhimer’s Capital Markets Group, along with industrial specialist Ellis Colthorpe of Thalhimer’s Hampton Roads team, who provided market leasing assistance.

Buc-ee’s to open in New Kent by 2025

It’s official. Buc-ee’s, the Texas-size travel center chain, completed its purchase of property in New Kent County and will open its first Virginia location in the next two years, with three more slated across the state, S.L. Nusbaum Realty Co. said in a news release.

A groundbreaking date for the New Kent site has not been set because the company is finalizing its building plans, said Nathan Shor, a senior vice president with S.L. Nusbaum Realty and exclusive tenant representative for Buc-ee’s in Virginia. Shor, who represented the seller in the transaction, would not say where Buc-ee’s is planning to locate its additional locations in the commonwealth.

Buc-ee’s New Kent LLC purchased 27.686 acres located at Exit 211 off Interstate 64 from Kent Farms Holdings Company, LLC for $6,506,210. The property will be constructed as a Buc-ee’s Super Center and include more than 75,000 square feet of retail space, 120 fueling positions, multiple electric vehicle chargers and parking for more than 650 vehicles, including bus and RV parking.

New Kent County’s Economic Development Department announced in March on its Facebook page that Buc-ee’s, the Texas-based retailer that bills itself as having the cleanest restrooms in America and the “friendliest beaver” mascot, had filed a conditional use permit with the county Planning and Zoning Department, generating hundreds of comments and thousands of shares.

At more than 75,000 square feet, the new Buc-ee’s location will be among the company’s largest. While the Buc-ee’s website says that its New Braunfels, Texas, location is the largest convenience store in the world at 66,335 square feet, that site is being dethroned by a 74,000-square-foot Buc-ee’s under construction in Sevierville, Tennessee, according to CBS affiliate television station WVLT. It appears the New Kent location could top the Tennessee Buc-ee’s.

The Buc-ee’s chain has opened more than 25 locations throughout the South in the past two decades.

 

Norfolk City Council votes to purchase MacArthur Center

On Wednesday evening during a special meeting, Norfolk City Council members approved plans for the city to purchase the struggling MacArthur Center mall downtown for up to $18 million. 

The 23-acre MacArthur Center is owned by Wells Fargo & Co., which holds the mall following a loan default by the mall’s previous owner, Connecticut-based Starwood Property Trust. 

Council took two actions Wednesday: In the first vote, councilors approved up to $18 million to buy the mall, which will come from three sources: $12 million from the city’s unassigned general fund balance reserve, up to $3 million from its capital improvement fund and up to $3 million from the land acquisition fund. According to the purchase agreement, the price of the mall is $11.05 million, with the rest going to consulting, legal and other fees. Norfolk Mayor Kenneth Cooper Alexander said he expects the deal to close in 30 to 45 days.

All council members, except Tommy Smigiel Jr. of Ward 5, voted in favor of the $18 million allocation. Smigiel objected because the downtown area receives more money and faster action than projects in other parts of Norfolk, he said.  To his colleagues on council, Smigiel added, “I respect you guys, but I’m going to keep reminding us of that equity issue. It is an equity issue when it comes to voting on things like this, so we need to do everybody’s projects throughout the city when they come up.”

In the second vote, council members unanimously approved ratifying a consulting agreement between the city and GEI Advisors Inc., a consulting engineering and environmental firm.

The mall was listed for sale in January by JLL, though no price was listed at the time. The mall includes 914,751 square feet of leasable area. Current mall anchors are Dillard’s Inc., with 253,616 square feet, and Regal Cinemas, with 80,210 square feet. Another 160,000-square-foot anchor spot is vacant. The mall’s three anchor spaces account for 493,826 square feet, or about 54% of the total space at the mall, which also has a multistory parking garage with about 4,000 spaces. But in recent years, the mall has lost major anchors such as Nordstrom, in April 2019, the Apple Store, in 2021, and, more recently, restaurants Texas de Brazil and California Pizza Kitchen.

The city will now own everything at MacArthur Center — including the mall property, parking garages and the land it all sits on — except for the Dillard’s building, which is owned by the retailer.

Several city residents spoke during a public comment period about the two ordinances, with some saying the city was moving too quickly and questioning “the rush,” while others supported the move. 

On Tuesday, Norfolk Mayor Kenneth Cooper Alexander told Virginia Business that buying the mall would enable the city to “play an active and strategic role.” He noted that MacArthur Center would continue operating as a mall and that the city would have discussions with the mall’s tenants. He suggested that the transition would be “seamless.”

The most recent assessment of the mall was about $25 million — about $20.7 million in land value and $4.2 million in improvement value. That’s down significantly from its July 2022 assessment, when it was valued at $51.8 million, including $24.8 million for the land, city records show.

The mall is now 62% vacant, according to JLL. Starwood Property Trust bought the mall in 2014 for $265.5 million from Michigan-based Taubman Centers Inc., as part of the $1.4 billion purchase of seven shopping malls. However, Starwood defaulted on a $750 million loan in 2019, and MacArthur Center is now owned by Wells Fargo and managed by Syracuse, New York-based Spinoso Real Estate Group. The city owns the land the mall sits on at 300 Monticello Ave. and has a leasehold interest.

 

Hampton Roads warehouses sell for $8.4M

A portfolio of three warehouses in Hampton Roads sold for $8.4 million in mid-May.

Tidewater Fleet Supply, an independent distributor of fleet, truck, trailer and heavy equipment parts, leases the properties.

Located at 3666 Progress Road, the Norfolk warehouse sold for $6.03 million, according to city property records. The parcel is approximately 4.82 acres. At 1324 Lindale Drive in Chesapeake, the approximately 1.6-acre property sold for almost $1.8 million, property records show. The warehouse in Hampton on 2502 58th St. is on roughly 0.51 acres.

B&D Acquisitions LLC bought the properties from Parrott Properties LLC. Ricky Anderson and Chamie Burroughs with Colliers International represented the buyer.

James City County farmland sells for $12M

A Houston-based industrial real estate company has purchased a 328-acre former farm in James City County for $12 million with plans to develop facilities for manufacturers, importers and warehousing and distribution companies.

Cushman & Wakefield | Thalhimer and sales partners Berkshire Hathaway HomeServices RW Towne Realty announced the sale of The Enterprise Center at Hazelwood Farms on May 22.

Lovett Industrial purchased the property, selecting it because of its proximity to the Port of Virginia and Interstate 64 between Hampton Roads and Richmond, according to a news release.

Geoff Poston and Ellis Colthorpe, both of Cushman & Wakefield | Thalhimer, along with Kimber Smith and Janet Moore of Berkshire Hathaway HomeServices RW Towne Realty, handled negotiations on behalf of the seller. Cushman & Wakefield | Thalhimer has been awarded leasing and marketing services for the future development project.

“We look forward to the next phase of development and lease-up, attracting highly coveted industrial users to the region in support of the Port of Virginia. The site is very well-positioned to accommodate users heading west from the Port of Virginia to the Northeast and Midwest regions by leveraging its strong labor supply pool and recent nearby transportation improvements,” Poston said in a statement.

The property sold on April 28, Poston told Virginia Business in an email. According to reports, the property was previously owned by descendants of George and Cinthia Hazelwood, who began purchashing land in James City County in 1885.

Former Henrico bank branch sells for $1.6M

A former Atlantic Union Bank branch in Henrico County has sold for $1.6 million.

8209 W Broad Street LLC, which is registered to an address in Chesterfield County, purchased the 3,579-square-foot former bank office on approximately .58 acres from Atlantic Union Bank.

The property is located at 8209 W Broad St.

Will McGoogan of Cushman & Wakefield | Thalhimer handled the sale on behalf of the seller.

Chesterfield shopping center sells for $4.92M

A Chesterfield County shopping center anchored by a Food Lion has sold for $4.92 million.

Cushman & Wakefield | Thalhimer’s Capital Markets Group represented seller 360 Associates LLC in the sale of Deer Run Village, which also features seven small shop tenants, located at 13947 and 13941 Raised Antler Circle in Chesterfield County, according to an announcement Thursday.

The 56,900-square-foot property was 100% leased at the time of the sale and was acquired on May 26. Information about the purchaser was not immediately available.

Catharine Spangler in Thalhimer’s Richmond office handled disposition efforts on behalf of the seller, along with Danielle Beckstoffer of Thalhimer’s retail leasing team.

Riverdale project could be ‘transformative’

Partnering with the city of Roanoke, developer Ed Walker started redevelopment of 100 acres encompassing the sprawling, former campus of American Viscose, a rayon plant that closed in 1958. 

“This is a chance we have as a community to really do something transformative,” Roanoke Economic Development Director Marc Nelson says.

Located in the city’s southeast quadrant and dubbed Riverdale after the historic name of the neighborhood, the project will include both historic rehab and new construction.

As part of his agreement with the city, Walker will invest at least $50 million over the next 17 years. Walker says it will be the last project of his career.

“These projects take a decade — and this one will take longer — so this is it,” he says. “If I’m lucky, I’ll live long enough to see it somewhat complete. It’s the kind of place that’s never finished. It’s so large and complex.” 

Before Walker’s company purchased the property, a group of investors operated it for decades as the Roanoke Industrial Center. Walker hopes to retain many of the businesses currently located there.

By 2043, he hopes the Riverdale neighborhood will offer “everything a great place has — lots of different kinds of people creating a diverse experience that’s enjoyable, safe, affordable, creative, economically powerful, experiential and healthy.” Specifically, he expects it will offer residences, offices, retailers and eateries as well as art studios and outdoors-focused programming.

Riverdale’s first phase, which could be completed by 2029, will include 375 apartments and at least one 3,000-square-foot commercial building.

In January, Roanoke City Council approved a $10 million loan to Walker’s company, Riverdale Southeast LLC, to cover property acquisition and site remediation. If developers invest at least $50 million over 17 years, the loan will be forgiven, according to a performance agreement. Additionally, the developer will receive a real estate tax rebate for 17 years. Currently, the property generates about $100,000 annually, according to Roanoke City Manager Bob Cowell.

A master plan for the project will be put together this year, factoring in input from area residents, city planners, leaders in outdoor sports and national consultants.

Richmond-based Chmura Economics & Analytics looked at the projected impact of Riverdale on construction, commercial operations and household spending in the city of Roanoke from 2023 to 2040 and estimated the initial development plan will have a cumulative economic impact of more than $326 million.