Sometimes the best decision a builder can make is not to build.
That’s the conclusion Lucas Thornton, managing partner at Hist:Re Partners in Roanoke, recently reached, although his plans for an office building may happen in the future.
Thornton’s downtown mixed-use development, The Bower, was set to open by late June with 90 one- and two-bedroom apartments atop first-floor retail space at 17 Campbell Ave. SW, the site of the former Campbell Court bus terminal. But he’s put the second phase — an 82,600-square-foot office building on Salem Avenue Southwest — on hold. Instead, Thornton intends to construct a $500,000 park where the office building would have gone. It should be ready later this summer, he says.
“The reality is that COVID has cast a long shadow over the office market. Multitenant office buildings now are difficult” to market, Thornton says, but demand for residential and retail remains solid. About 30% of the apartments in his $25 million project are pre-leased. He also has retail tenants lined up for three out of four spaces, though Thornton says he’s not ready to make those plans public.
As in the rest of the state, the office space market in Roanoke remains uncertain. In its 2023 annual survey, Poe & Cronk Real Estate Group estimated downtown Roanoke’s office occupancy rate at 86%, down a couple points from 2022 and below an ideal rate of 90%.
Poe & Cronk President Matt Huff has seen Roanoke’s occupancy numbers as low as 80% and as high as 94%.
“I think [Thornton] looked at the economic landscape and correctly decided it’s probably not the time,” Huff says, but both are confident offices have a future.
“As corporate America sort of settles on its priorities,” Thornton says, “a site like ours we believe will be very attractive because more traditional formats and footprints might not work as well.”
Making room for The Bower required the demolition of the Campbell Court Transportation Center, which Valley Metro, the Roanoke Valley’s public transportation provider, had operated out of since 1987. Third Street Station, an open-air bus station, opened in June 2023 and serves as Valley Metro’s central transfer hub.
Thornton hopes The Bower’s park will give Roanokers and visitors another place to spend time. “I can imagine everything from an ice rink in the winter … to concerts in the summer.”
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