Please ensure Javascript is enabled for purposes of website accessibility
Upcoming Event

Best Places to Work in Virginia

Hamburger Menu Hamburger Menu

Tag: commercial real estate

Divaris Group acquires N.C. mixed-use leasing, advising firm

Virginia Beach-based Divaris Group has acquired North Carolina-based real estate planning, advisory and leasing firm The McGarey Group, the firm announced Friday.

Financial terms and other details of the acquisition were not disclosed.

The McGarey Group, led by President and CEO F. Denver McGarey, is now operating within Divaris Advisory, a division of Divaris Group. McGarey’s team will maintain its current roles, with its four employees transitioning to Divaris. McGarey Group has employees in Pinehurst, North Carolina, Ann Arbor, Michigan, and in San Diego.

“The McGarey Group has played a vital role in transforming numerous communities through landmark developments, spurring economic and social renewal,” Divaris Group Chair and CEO Gerald Divaris said in a statement. “Denver and his team have ambitious work ethic, unwavering commitment to integrity and an impressive track record of delivering exceptional results, enabling them to forge powerful strategic alliances across all areas of mixed-use development.”

Companies making up the Divaris Group include Divaris Real Estate Inc. and Divaris Property Management Corp. The McGarey acquisition expands Divaris Real Estate’s services throughout the mid-Atlantic and to Arizona, Michigan, California and beyond, Divaris said. The McGarey Group has worked on 65 projects involving 41 million square feet across 22 states as well as in China and Japan. McGarey Group provides comprehensive planning, advising and core leasing of mixed-use retail projects, including projects involving professional and college sports teams.

In a statement, McGarey called merging with Divaris “the most perfect fit.”

“This amalgamation of advisory, leasing, marketing, management, development and acclaimed transactional brokerage services gives our clients a tremendous advantage,” McGarey said. “Throughout this process, we had an unobstructed view to the sophistication of their verticality and, more importantly, to the remarkable character and integrity of the Divaris family and company.”

News of the acquisition comes less than two weeks after Divaris announced it had added 2.3 million square feet of new property management and engineering assignments following a joint venture with Washington, D.C.-based commercial real estate firm KLNB in which Divaris will manage property obtained by that company.

Founded in 1974 in South Africa and headquartered in Virginia since 1981, Divaris Group is an international real estate services, brokerage and property management company that manages and/or leases more than 37.3 million square feet of office, retail and industrial space throughout the nation. IDivaris Real Estate Inc. has offices Virginia Beach, Newport News, Norfolk, Richmond and Roanoke, as well as in Charlotte and Raleigh, North Carolina, Beverly Hills, California, and Washington, D.C.

Editor’s note: An earlier version of this story mistakenly stated the location of The McGarey Group. The company is based in North Carolina.

Hickory Point Townhomes sells for $25M in Newport News

Arlington-based Ritz Banc Group, a real estate, private equity and alternative asset management firm, bought Hickory Point Townhomes, a 175-unit apartment complex at 399 Hickory Point Blvd. in Newport News, from New York-based AION Partners for $25 million, Cushman & Wakefield announced Monday. 

The new owner pland to continue a comprehensive renovation program implemented by the previous owner. 

The 175,600-square-foot property has 172 two-bedroom apartments and three three-bedroom apartments. The community also has a swimming pool and cabana. 

Ritz Banc Group’s portfolio includes multifamily communities in Virginia Beach, Winchester, Portsmouth, Chesapeake, Reston, Chantilly and Richmond. 

Construction starts on 288 Lofts in Midlothian

Norfolk-based S.L. Nusbaum Realty Co. has started construction on 288 Lofts, a $28 million, 160-unit apartment community in Chesterfield County’s Midlothian area.

The first apartments are expected to be completed in fall 2023. Located at 400 Katrina Court on about 11 acres at the northeast corner of State Route 288 and Midlothian Turnpike, 288 Lofts will offer one-, two- and three-bedroom apartments with amenities including a clubhouse, business center, fitness center and a pool.

The community was designed by TS3 Architects PC; Details Ltd.; Siska Aurand Landscape Architects Inc.; and Townes Site Engineering. Morgan-Keller Construction is the general contractor.

 

S.L. Nusbaum promotes retail leasing exec to VP

S.L. Nusbaum Realty Co. has promoted Maggie Spillane to vice president, the Norfolk-based realty company announced Tuesday. 

Spillane joined the company’s shopping center leasing department in 2020 as an associate, providing landlord representation and leasing services to a variety of retail centers in Hampton Roads. Prior to joining S.L. Nusbaum, she was director of commercial real estate with McKinley Companies Inc., where she oversaw all operations of the company’s commercial portfolio, which had 1.5 million square feet of office, retail and other properties. 

Murray Rosenbach, senior vice president and director of shopping center leasing, called Spillane an “invaluable” team member who hit the ground running immediately. “She has illustrated a strong work ethic and a positive can-do attitude in every aspect of her contributions to success of her clients and S.L. Nusbaum Realty Co.,” Rosenbach said in a statement.

Spillane graduated from Virginia Wesleyan University with a bachelor’s degree in management business and economics.

Waterford Apartments sells for $55M in Va. Beach

Waterford Apartments in Virginia Beach is under new ownership, after Blackfin Real Estate Investors LLC acquired the 376-unit apartment complex for $55.35 million, the real estate investment company announced.

Located off Shore Drive near Lake Smith, the one- and two-bedroom apartment community was built in 1980 and previously renovated to include walk-in closets, maple custom cabinets, granite countertops, updated lighting and fixtures, dishwashers and other upgrades, according to a news release from Blackfin. It is at near-full occupancy.

This acquisition is Blackfin’s second in Hampton Roads in 2023. In January, the real estate investment company purchased Riverlands Apartments, a 404-unit apartment complex in Newport News, for $44.2 million. Blackfin owns several apartment communities in Virginia, North Carolina, Tennessee, Florida, South Carolina and Maryland. It’s Blackfin’s 10th acquisition in Hampton Roads and its 14th acquisition overall during the past six months.

Hank Hankins, Victoria Pickett, Charles Wentworth and Garrison Gore, all of Colliers, represented the seller in the transaction.

Newport News office building sells for $2.87M

A Newport News office building has sold for $2.875 million, Cushman & Wakefield | Thalhimer announced in February.

Sashe LLC purchased the 24,526-square-foot office building at 11839 Rock Landing Drive in Oyster Point Park. Cushman & Wakefield | Thalhimer declined to disclose the seller.

The building is currently occupied by Engineering Development Laboratory Inc., an electronics manufacturing services firm that populates and tests printed circuit boards. The company has been in the building since 2002, when it was built, and will remain there for only a limited time following the sale, Steve Patterson, EDL’s managing director, told Virginia Business.

Teresa Nettles and Clay Culbreth, of Cushman & Wakefield | Thalhimer, handled negotiations on behalf of the seller.

Amazon delays construction on HQ2

Amazon.com Inc. is delaying construction on the second phase of HQ2, its $2.5 billion East Coast headquarters in Arlington County.

The news comes as Amazon plans to open HQ2’s first phase, Metropolitan Park, in June, and as the Fortune Global 500 tech company laid off a record 18,000+ workers amid concerns over slowing revenues and a potential recession.

Amazon had anticipated the groundbreaking for its second phase, PenPlace, to occur this year. While the e-tailer has not offered an updated timeline for construction on PenPlace, Amazon has begun some pre-construction work, including applying for permits, and expects to continue such efforts this year.

In a statement, Amazon Vice President of Global Real Estate and Facilities John Schoettler said, “We’ve already hired more than 8,000 employees in HQ2 and we’re excited to welcome them to our new Met Park campus this June. We’re always evaluating space plans to make sure they fit our business needs and to create a great experience for employees, and since Met Park will have space to accommodate more than 14,000 employees, we’ve decided to shift the groundbreaking of PenPlace (the second phase of HQ2) out a bit.”

Bloomberg first reported the construction delay.

Amazon originally announced that HQ2 would create 25,000 jobs by 2030, and the company says its hiring goals have not changed.

During the COVID-19 pandemic, Amazon rapidly grew its global workforce, ending 2021 with more than 1.6 million employees, up from 798,000 in the fourth quarter of 2019, according to CNBC. The company began layoffs in November 2022, at the time expected to total 10,000 employees, and in January, that number grew to 18,000, according to The Wall Street Journal. Amazon, which also paused corporate hiring at the same time, is one of several tech giants that have begun large-scale layoffs in recent months, including Google LLC, which cut 12,000 employees, and Meta Platforms Inc., which cut more than 11,000 people.

Amazon has pulled back on other real estate projects over the past year. Citing the need to reevaluate designs for hybrid work environments, Amazon pausing construction in July 2022 on six office buildings in Bellevue, Washington, and Nashville, Tennessee, according to Reuters.

The company has not yet made a decision on whether it will modify its PenPlace plans. Plans for HQ2’s second phase currently include 3.3 million square feet of office and retail space spread across three 22-story buildings, as well as the distinctive spiral Helix building, along with 100,000 square feet of retail space and about 2.5 acres of public space. In April 2022, Arlington County approved the plans for PenPlace, which. include 20,000 square feet for Arlington Community High School.

Amazon purchased the 11-acre development site for PenPlace for $198 million in June 2022 from Bethesda, Maryland-based developer JBG Smith Properties, Amazon’s HQ2 development partner. Unless the Arlington County Board grants an extension, Amazon’s site plan approval will expire on April 23, 2025, if the company has not received a footing to grade permit to construct the second phase’s first building by then. Amazon’s use permits for the proposed public park and high school will also expire on April 23, 2025, if construction or operation has not started by then, according to Arlington County Board agenda documents.

“We continue to work with Amazon to advance plans for PenPlace, and look forward to helping Amazon realize its complete vision for HQ2,” JBG Smith CEO Matt Kelly said in a statement.

HQ2’s roughly 2.1 million-square-foot first phase consists of two 22-story office buildings, about 50,000 square feet of retail space, a park and a 700-person meeting center.

In February, Amazon announced that employees would be required to work in person at least three days a week beginning in May, a divergence from its previous remote work policy. A group of Amazon employees released a petition calling for remote work to continue, according to CNBC.

Amazon is eligible for up to $750 million in incentives from a state economic development package based on its annual hiring goals at a stipulated average annual wage. While the company became eligible to submit its first payment application on April 1, 2020 — reflecting its job creation through Dec. 31, 2019 — and receive its first payment in fiscal year 2024 — which begins July 1, 2023 — Amazon instead submitted a progress report, according to Suzanne Clark, Virginia Economic Development Partnership’s managing director of communications and marketing.

Amazon submitted progress reports in April 2021 and 2022 as well. The e-tailer has until April 1 this year to submit its first application for payment, which would reflect its performance from 2019 through 2022. Amazon would then be eligible to receive its first grant payment in fiscal year 2027, meaning on or after July 1, 2026.

The company said it didn’t want to begin requesting payments until it reached key milestones, like the opening of Met Park, because it intends to be a community partner. In the memorandum of understanding between the state and Amazon, the tech giant’s cumulative job creation goal was 4,983 by Dec. 31, 2022. With 8,000 new jobs so far, Amazon is well ahead of its hiring timeline.

Arlington County Board Chair Christian Dorsey said the delay is not a cause for concern. “As we all negotiate the post-pandemic reality, everyone from every sector is thinking about its long-term plans in a new light, and sadly, we don’t all have all of the answers,” he said, “so it’s not incredibly surprising that Amazon is taking a pause before beginning the second phase of a project for which they haven’t fully opened the first phase.”

Arlington will continue its infrastructure projects around the site, like the 12th Street South Complete Street Project, which will create a streetscape with landscaping, sidewalks, pedestrian ramps and streetlights on 12th Street between Clark and Eads streets. The project will also create center-running transit-only lanes.

Filling in

Industrial real estate is a hot commodity in Southwest Virginia.

“It’s hard to find available space of anything that’s above 15,000 to 20,000 square feet,” says Jonathan Belcher, executive director of the Virginia Coalfield Economic Development Authority (VCEDA), which represents Lee, Wise, Scott, Buchanan, Russell, Tazewell and Dickenson counties and the city of Norton.

Leaders in the area had discussed putting up industrial spec buildings — structures erected with a goal of attracting tenants after construction. But then inflation hit. “It’s just become so cost-prohibitive,” Belcher says. Until prices go down, he and other Southwest Virginia economic development leaders have had to look “more closely at what existing inventory there is in an area.”

New Jersey-based custom resin and vinyl fabric manufacturer Ronald Mark Associates Inc. (RMA) looked to existing inventory for its new Virginia manufacturing operation. In November 2022, RMA announced plans to invest $13.5 million to establish a manufacturing operation at the former Komatsu plant in Bluefield.

Executives at Komatsu, a manufacturer of construction, mining, forestry and industrial heavy equipment, announced in January 2021 their plans to close the Bluefield facility, which produced underground mining products. According to news reports, 120 workers lost their jobs.

In late January, RMA President Michael Satz said he had just hired a production manager who would help him hire 28 more employees. “If Komatsu had over 120 people on staff, hopefully we can find some of those people and bring them back.”

Manufacturing and shipping

In another example of repurposing existing buildings, Signco, a Chicago-based custom sign manufacturer, announced plans in March 2022 to invest $650,000 to establish operations at the former MC Signs facility in Bluefield. Timothy Danielson, director of economic development for Tazewell County, said the company had 21 employees working at the Bluefield operation by early December 2022. “It’s another great addition to the manufacturing base in the area,” Belcher says.

Chilhowie also had big manufacturing news last year.

In June 2022, Illinois-based Scholle IPN, a flexible packaging supplier, announced plans to invest $31.1 million to expand its operation in the Smyth County town by 73,000 square feet to accommodate new manufacturing lines. The company also plans to add 800 feet of new rail track to support the inflow of resin.

Kendra Hayden, economic development project manager for Smyth County, said in early December 2022 that the company had laid a concrete pad for the expansion. 

Construction should be completed by late summer or early fall, according to Jake Tabor, business retention and expansion manager for the Mount Rogers Regional Partnership, a nonprofit regional economic development organization.

In Washington County, construction is underway on a 251,000-square-foot distribution center for FedEx Ground. The facility is expected to create 250 jobs, according to Jason Boswell, director of community development for the county.

The warehouse is expected to be operational in 2023, a spokesperson for FedEx said in a statement to Virginia Business.

Tech talent

Southwest Virginia also attracted technology employers in 2022.

In August 2022, Paymerang LLC, a Chesterfield County-based payment and invoice automation company, announced plans to create 50 jobs in software development, payment operations and cloud engineering in Wise County. The new positions will be housed in Big Stone Gap’s downtown coworking space.

As of early December 2022, the company had hired about a dozen of the new employees, according to Will Payne, managing partner of consulting firm Coalfield Strategies LLC, which leads business development for InvestSWVA, a public-private business attraction and marketing campaign for Southwest Virginia that assisted with Paymerang’s move to Wise County.

In October 2022, two Tazewell County residents announced plans to locate a data center hosting and cryptocurrency mining business called Blackstone Data Services LLC at the county’s Bluestone Business and Technology Park.

“We think it will be successful,” Tazewell County Administrator Eric Young says of the project. “Hopefully other data centers will come out into rural areas.”

Co-founders Seth White and Craig Earls have installed two mobile data centers at the park. These centers house technology used for bitcoin mining, a process where high-performance computers solve math equations to validate bitcoin transactions.

White and Earls are working with Appalachian Power and county officials in the hopes of increasing the amount of power available at the technology park. As of December 2022, Blackstone Data Services had 1.5 megawatts of power available to use, according to Earls. Ideally, they’d like access to 10 to 12 megawatts. That will likely require a substation to be built, he says.

“We’re a small company right now,” adds White. “We’ve got aspirations to grow beyond that — assuming we can get more power.” 

 

Ups and downs

Compared with the previous two years, 2022 was less of a roller coaster for the housing market in Virginia, but it still presented challenges for many would-be first-time homebuyers.

As inflation rates grew, peaking at a 40-year high of 9.1% in June 2022, the Federal Reserve increased interest rates rapidly. Inflation fell to 6.5% in December 2022, but the higher rates put the brakes on the housing market in Virginia with an abrupt screech.

Over the course of 2022, 123,000 homes sold statewide, about 20% less than in 2021 but closer to pre-pandemic activity, according to Virginia Realtors. The sharpest declines were seen in Northern and Central Virginia. Bidding wars were less common last year than during the height of the pandemic, but it still wasn’t a great market for buyers, as the state’s median sales price jumped about $25,000 to $375,000 in December 2022, compared with December 2021.

However, in February, mortgage rates started to decline, prompting renewed demand. According to a Wall Street Journal report, the average 30-year home loan rate has come down by nearly a full percentage point from a 20-year high above 7% in November 2022 — although that’s still double the 3% rates from November 2021. 

On the commercial side, many large-scale projects are now in the works across the state. In Richmond, the ball is rolling on the $2.44 billion Diamond District mixed-use development centered around a new baseball stadium for the Richmond Flying Squirrels, set to be completed in time for the 2025 baseball season.

At the end of 2022, the Richmond Economic Development Authority and the Greater Richmond Convention Center Authority received five proposals from developers to redevelop the City Center Innovation District, a 9.4-acre downtown area that includes the closed Richmond Coliseum, which the city wants demolished. A 10-person evaluation panel is scheduled to narrow the group of five during the first quarter of this year.

In Hampton Roads, two of famed entertainer and Virginia Beach native Pharrell Williams’ larger projects made progress in 2022: the $1.1 billion redevelopment of Military Circle Mall in Norfolk and the $350 million Atlantic Park project in Virginia Beach.

Negotiations started last year, but as of late January, Williams’ Wellness Circle team had not yet officially signed documents to redevelop Military Circle Mall, which would include 1,100 residential units, a 200-room hotel and a 16,000-seat arena. In November 2022, the music superstar prodded Norfolk leaders to move forward with the project, saying “The ball’s in their court.”

Meanwhile, the Oceanfront-based Atlantic Park, Williams’ surf park project with Virginia Beach-based Venture Realty Group, secured pending financing in January and is getting closer to groundbreaking, with completion set for summer 2024. The first phase includes 120,000 square feet of retail, 310,000 square feet of residential and 15,000 square feet of office space.

Northern Virginia is seeing massive development along the Silver Line’s Loudoun County extension, which opened in November 2022 after an eight-year delay. Reston Town Center, which has 5.1 million square feet of office space, is set to add 700,000 to 800,000 square feet more in the next few years, part of a $3 billion investment by Boston Properties Inc., and developer Comstock Inc. is busy building 7 million square feet of offices and residential space at Reston Station. The company has plans for 2.5 million square feet of multiuse space at Loudoun Station in Ashburn.

In Danville, the long-awaited White Mill project broke ground in early 2023. The $100 million public-private redevelopment of the 550,000-square-foot former textile mill, now known as Dan River Falls, is a joint venture between the city’s industrial development authority and The Alexander Co. It will have 147,000 square feet of commercial space and 150 apartments geared toward employees of the forthcoming Caesars Virginia casino.  

To purchase the complete list click here. 

 

To purchase the complete list click here. 

 

 

To purchase the complete list click here. 

 

Warehouse portfolio with two Va. properties sells for $21.86M

Seven warehouses leased to Lansing Building Products, including two in Virginia, sold for $21.86 million, Cushman & Wakefield | Thalhimer announced Friday.

The portfolio of warehouses totals 209,883 square feet, and the properties range from 20,000 to almost 50,000 square feet each. On average, 89% of each property is warehouse, and 11% is office space. The tenant, Lansing Building Products, supplies exterior building products to contractors and has more than 2,000 employees.

The two Virginia properties are in Newport News and Norfolk. The 47,664-square-foot warehouse in Newport News is located at 12661 McManus Blvd. The 40,050-square-foot Norfolk warehouse is located at 3644 Village Ave.

New Jersey-based B&D Holdings bought the properties. Eric Robison with Cushman & Wakefield | Thalhimer’s Capital Markets Group and Rett Turner with Thalhimer’s Global Occupier Services Multi-Market Team represented the seller. Lansing entities owned the Virginia properties, property records show.

The other warehouses were in Statesville and Wilmington, North Carolina; Oklahoma City; Myrtle Beach, South Carolina; and Ogden, Utah.