A 20-unit apartment property in Norfolk sold for $3.1 million on March 20.
Located at 1314 and 1318 Little Bay Ave., the property has 20 one-bedroom units that are each 600 square feet. The units were built in 1970.
Tidewater View sold the property to Nouveaux Little Bay. Justin Ferguson, Altay Uzun, Theo Jolley and Jack Carroll with Marcus & Millichap’s Hampton Roads and Richmond offices represented the seller.
A Days Inn in Salem sold for $3.1 million on March 26.
Located at 1535 E. Main St., the two-story hotel has 70 rooms. It was built in 1974.
Evergreen Hotels purchased the property from Devkison LLC, according to property records. Milin Mehta, Chase Dewese, Jack Davis and Joce Messinger with Marcus & Millichap’s Charlotte Uptown and Charleston offices, in North and South Carolina respectively, represented the seller. Brian Hosey assisted in closing the transaction.
A 17-unit apartment property in Portsmouth sold for $2.4 million, Marcus & Millichap announced Tuesday.
Built in 1987, Effingham Green Condos has 17 two-bedroom, one-bathroom units across two buildings on 2 acres. The property is located at 1007 Green St.
Capps Equity sold the property to Nouveaux Effingham. Justin Ferguson, Altay Uzun, Theo Jolley and Jack Carroll with Marcus & Millichap’s Hampton Roads and Richmond offices represented the seller.
Pembroke Square will begin the next phase of demolition Monday on the former Pembroke Mall in Virginia Beach, as part of a $200 million mixed-use redevelopment project.
The roof and columns of the mall’s structure will be removed at the northeast entrance, north of Kohl’s on the Constitution Drive side of the former mall. A portion of the mall’s interior was already been demolished in preparation for the next phases of development.
A senior living community that’s part of the redevelopment, Aviva Pembroke, at the corner of Jeanne Street and Constitution Drive, is under construction with plans to open this October. Aviva Pembroke will be seven stories with 153 units. It is expected to have 121 independent units, 20 assisted living units and a dozen memory care units. The building has been topped out, and the company is sequencing exterior finishes right now, Smith said.
The second phase of the redevelopment project will include a Tempo by Hilton hotel in partnership with The Landmark Group that will open in 2025. Plans for the hotel were scaled back to seven stories last year and it’ss under a full redesign, Smith said. Developers reconsidered the hotel plans after interest rates shot up and construction costs escalated. Smith said ground could break on the hotel possibly in December, but more likely in the first quarter of next year. It will have 163 rooms and take 22 to 24 months to build.
There’s also a residential portion of the project, and like the hotel, the plans for that apartment building have been scaled down from 12 stories to seven stories. Predevelopment work is being completed before developers finish a new design. Development of the apartments is running about six months behind schedule, Smith said, and a groundbreaking is likely to take place in mid-2025, with a 22- to 24-month schedule for construction. The yet-to-be-named building will have 272 apartments and an adjacent parking garage with 611 spaces, instead of being located under the building as originally planned.
Another area of the property could handle an office tower, Smith said, but plans for that are on hold amid a decline in office demand, so it would need to be a build-to-suit opportunity.
Pembroke Square Associates first announced plans for the redevelopment of the aging mall’s 54 acres in November 2021. Groundbreaking for its first phase took place in December 2022.
Northern Virginia remains the country’s largest data center market, according to a report released Monday by real estate company JLL.
The 581 megawatts of capacity leased by energized — or built-out — data centers in Northern Virginia for 2023 represented a new record, according to the JLL report. Data centers leased 184 MW in capacity in energized buildings in Northern Virginia for the first half of 2023, and 397 MW in energized buildings during the second half of the year. (Data center leases are measured primarily by critical power supply, the electrical load devoted to a data center’s IT infrastructure such as data servers, communications switches and routers.)
By comparison, the primary North American data center markets saw 4.3 gigawatts of transactions in 2023, according to JLL report. Secondary markets added 554 megawatts for the year.
It’s the fourth straight year Northern Virginia has experienced record demand, according to the report, and secondary markets saw significant declines in their share of overall data center demand as a result.
The total inventory of gross square feet dedicated to data centers in Northern Virginia is about 51 million square feet, the report states, with about 167,000 square feet vacant and 13.4 million square feet under construction. An additional 58.6 million square feet of data center development is planned in Northern Virginia. The primary Virginia localities measured by the report were Loudoun and Prince William counties.
In 2023, the region led the nation in data center leasing activity, with 1.6 gigawatts of transaction volume, including anticipated deliveries in the next few years, according to the North American Data Center Report.
For all of North America, data center transaction volume in single-asset and portfolio sales was up to $4.6 billion for 2023, up from $2.8 billion in 2022, a 67% increase, according to the report. Figures for Northern Virginia were not available.
The power used by data centers in Virginia doubled between 2018 and 2022, according to Richmond-based utility Dominion Energy. That capacity is expected to double again statewide by 2028, based on customer orders, according to the report. Vacancy is below 2% and cloud computing makes up 82% of the demand in Northern Virginia. Behind that, other technology makes up for about 15% of the demand. Raw numbers by industry were not available.
According to the JLL report, there is a lack of available data center leasing options offering more than 1 megawatt. To address current constraints and meet future demand, Dominion Energy has two transmission lines under construction in Northern Virginia to serve the data center market.
More than 70% of the world’s internet traffic comes through Data Center Alley, six square miles in Loudoun County’s Ashburn area, and in 2022, Northern Virginia accounted for 64% of the total new data center capacity brought online in primary markets across the U.S., according to the North American Data Center Trends Report by CBRE.
However, data centers have become a point of contention in Northern Virginia, particularly in Prince William County. Supervisors voted late last year to approve the Prince William Digital Gateway, a 2,100-acre, 23 million-square-foot campus that is expected to be the world’s largest data center facility, with an expected $500 million in local annual tax revenue when finished. The vote came after a 27-hour public meeting filled with residents opposing and supporting the project, and state lawmakers are pushing for more oversight of local data center decisions.
But localities in Central Virginia and points east and west are also courting data centers, and in January 2023, Amazon Web Services announced it would invest $35 billion by 2040 to establish multiple data center campuses across the commonwealth. There’s growing interest in areas outside Northern Virginia due to lower land prices and more available property, officials say.
It was a rough year for prospective homebuyers, especially those seeking houses in Northern Virginia and the Richmond area.
Home sales in Virginia were the lowest the market has seen since 2014, dropping 20% from 2022 to 2023, according to data released in January by Virginia Realtors. Hampton Roads and Shenandoah Valley home sales also dropped precipitously. Across the state, 98,464 residences sold last year, down from 123,244 in 2022. And with fewer listings, prices went up too, with the median sale price at $390,000, up 4% from 2022.
High interest rates set by the Federal Reserve to lower inflation meant many borrowers stayed put, waiting for a better moment to make a move. That time may come for some buyers in 2024, as the Fed is expected to lower interest rates three times this year, likely starting in March or May.
Not only are high rates giving homebuyers pause, they’re also impacting Realtors, brokers, lenders and others in the industry. Laura Lafayette, CEO of the Richmond Association of Realtors, said last fall that “golden handcuffs” are keeping homeowners from selling, translating into less work for real estate professionals. “I think most Realtor associations across the state are budgeting for a modest loss in membership.”
Despite challenges in residential real estate, there was progress in commercial real estate over the past year. In Virginia Beach, the $335 million Atlantic Park project, led by Venture Realty Group and Pharrell Williams, broke ground in March 2023, and the $2.4 billion Diamond District project in Richmond was set to start phase one in early 2024. In February, Caesars Virginia topped off its permanent Danville casino, which is expected to be open by the end of this year.
Meanwhile in Arlington, the first two towers of Amazon.com’s HQ2 East Coast headquarters campus opened in June 2023 — although even the e-tailer is acknowledging the impact of work-from-home and hybrid employment, pausing construction on phase two of the campus.
Next door, in Alexandria, the opening of Virginia Tech’s first Innovation Campus building has been delayed until 2025 due to construction supply chain problems.
Data center growth continued strong in Loudoun, Prince William and Stafford counties, although some residents and elected officials have expressed outright opposition to massive data center campuses taking up rural and historic land.
Meanwhile, construction firms in Virginia and beyond are saying that labor shortages, interest rates and supply chain issues are likely to continue impacting their businesses this year.
Stephen E. Sandherr, CEO of Associated General Contractors of America until March 31, said that 2024 “offers a mixed bag for construction contractors. On one hand, demand for many types of projects should continue to expand. Meanwhile, they face significant challenges when it comes to finding workers, coping with rising costs and weathering the impacts of higher interest rates.”
Data centers, water and sewer infra- structure and roads are all among high- dollar projects contractors expect to compete for in 2024, and business owners and politicians are all pushing for more affordable housing.
“Everyone is struggling with this issue, but we can learn from each other,” notes Tom Barkin, president and CEO of the Federal Reserve Bank of Richmond. Land availability and cost, he notes, are key issues in Virginia, with finished lot costs accounting for nearly 20% of the average sales price of a new single-family home in 2022.
Virginia Beach real estate investment trust Armada Hoffler expects to name Chief Operating Officer Shawn Tibbetts as its CEO next spring, when current CEO Louis Haddad plans to retire. Tibbetts has been promoted to president and will remain COO, Armada Hoffler announced Thursday.
Tibbetts has been COO since he joined the company in 2019 after serving as the Port of Virginia’s president and COO. He spent nine years at the port.
Daniel Hoffler, the company’s founder and executive chairman, will relinquish his chairman role in June, and Haddad will become executive chairman, while remaining CEO, until his retirement in 2025. Pending a shareholders’ vote at the company’s 2024 annual meeting, Hoffler will continue to serve as chairman emeritus.
In his expanded role, Tibbetts will continue to oversee all aspects of the company’s operations, guiding strategic initiatives and fostering innovation, according to a news release from Armada Hoffler.
“Shawn has consistently demonstrated exceptional leadership qualities and strategic vision throughout his time with us,” Haddad said in a statement. “We have full confidence in Shawn’s ability to lead our company to even greater heights. His promotion to president is a well-deserved recognition of his outstanding contributions and will undoubtedly bring continued success to Armada Hoffler.”
Under Tibbetts’ leadership, Armada Hoffler’s portfolio net operating income grew by 45%, and Tibbetts oversaw the execution of more than $1.2 billion in transactions.
“I am honored to assume this role and deeply appreciative of the support from the board of directors, including Dan and Lou,” Tibbetts said in a statement. “I am excited to continue to build upon the incredible foundation Armada Hoffler has established over the past four decades and continue to exceed the expectations of our shareholders.”
Tibbetts earned his bachelor’s in business administration from James Madison University and his MBA from William & Mary, as well as completing the Advanced Management Program at Harvard Business School.
Armada Hoffler is the real estate giant behind Virginia Beach’s Town Center. The firm’s flagship project was built as part of a public-private partnership. As of last fall, it had 51 large-scale commercial assets and had developed more than $800 million in new projects. It has operations in seven mid-Atlantic states and also provides general construction and development services to third-party clients. It was founded in 1979 by Hoffler.
UPDATED: Feb. 16, 10 a.m.
CoStar Group, which already has a major presence in Richmond, will invest $20 million to move its global corporate headquarters from Washington, D.C., to Arlington County’s Rosslyn area, Virginia Gov. Glenn Youngkin announced Tuesday.
Known for its online real estate marketplaces Apartments.com and Homes.com, the real estate analytics and data company also purchased the 560,000-square-foot Central Place Tower building at 1201 Wilson Boulevard from Bethesda, Maryland-based JBG Smith Properties and Newark, New Jersey-based PGIM Real Estate. CoStar paid $339 million for the property, according to a report from Bisnow based on CoStar’s own commercial real estate data.
About 500 corporate office employees will be relocated from downtown D.C. to Arlington, and CoStar plans to add 150 jobs at the new headquarters, where it expects to occupy 150,000 square feet in late 2024.
“The financially strategic acquisition of this building will provide the perfect home for the more than 500 employees at our current headquarters. We’re incredibly thankful for our 14 years calling Washington, D.C., home, and we will continue to be a part of this community even as we move across the river to Arlington County,” CoStar founder and CEO Andy Florance said in a statement.
In making the announcement, Youngkin said, “Virginia’s a great choice for a new corporate headquarters location, and we are excited that CoStar Group, a leading provider of online real estate marketplaces, information, and analytics in the property markets, sees the economic advantage in moving to the commonwealth. … We are proud that CoStar has chosen Virginia as its home.”
Arlington is already home to Fortune 500 companies RTX, Boeing and AES, as well as Amazon.com’s HQ2 East Coast headquarters and Nestlé’s North American headquarters.
CoStar Group will pay $13.95 million to Arlington County to obtain exclusive, sole use of the 12,000-square-foot Observation Deck in the Central Place Tower, which was the region’s highest public observation deck, offering panoramic skyline views. At 391 feet tall, the 31-story building is also the tallest in the Greater Washington region. Designed by D.C. architecture firm Beyer Blinder Belle, the building was completed in 2017. CBRE assisted with marketing Central Place. The tower’s other features include a two-story, Calacatta marble lobby with a floor-to-ceiling video wall. There’s also an outdoor public plaza offering 45,000 square feet of dining and retail space.
According to Arlington County Manager Mark Schwartz, CoStar’s nearly $14 million payment to secure Observation Deck access is contingent upon approval by the county Board of Supervisors, and will be allocated toward the reconstruction of Rosslyn’s Gateway Park to be completed nearly 10 years earlier than planned. After CoStar submits required land use applications and receives approvals, the county would vacate its Observation Deck easement.
“CoStar Group’s move to Arlington is a huge win and a testament to our high quality of life, dynamic urban centers, unparalleled talent pool and business-friendly environment,” said Arlington Economic Development Director Ryan Touhill. “CoStar Group’s outright purchase of the building also signifies confidence in our commercial real estate market, which is key to our ongoing efforts to reduce office vacancies.”
Founded in 1987, CoStar employs more than 6,200 workers in 14 countries and is included in the S&P 500 and Nasdaq 100 indexes.
In addition to the Homes.com and Apartments.com residential real estate online portals, CoStar Group’s other divisions include CoStar, a provider of commercial real estate data, analytics and news; LoopNet, a leading online marketplace for commercial real estate; Ten-X, the world’s largest online commercial real estate exchange; and STR, a hospitality data and analytics division it acquired in 2019. CoStar may be best known by the general public for its Apartments.com advertisements with movie star Jeff Goldblum, including a big-budget, special effects-heavy 2024 Super Bowl ad.
CoStar moved to D.C. from Bethesda in 2010. Washington, D.C., has been plagued by record downtown office vacancy rates and an aging stock of office buildings, with buildings older than 24 years old making up about 75% of vacancies last year. Additionally, violent crime rose nearly 40% in the District last year, a point that has come up in local speculation about why Monumental Sports & Entertainment is planning a $2 billion move from D.C. to Virginia that has become a political hotpoint during the 2024 General Assembly session.
In November 2022, CoStar broke ground on its $460 million expansion in downtown Richmond, where the company employs more than 1,000 people at its research and data analytics headquarters, established in 2016. CoStar has said it plans to add 2,000 employees to the city’s local workforce when its new, 750,000-square-foot Richmond campus is expected to open in 2026.
Last year, CoStar made an $18 million commitment toward Virginia Commonwealth University’s CoStar Center for Arts and Innovation in Richmond. The $253 million center, which could begin construction this year, will house VCU’s School of the Arts and interdisciplinary programs involving business, sciences, medicine and engineering.
The Virginia Economic Development Partnership worked with Arlington Economic Development to secure CoStar’s headquarters relocation for Virginia. Youngkin approved a $1.25 million grant from the Commonwealth’s Opportunity Fund to assist Arlington with this project, and he also approved a $3.5 million Virginia Economic Development Incentive Grant for the project. Funding and services to support the company’s workforce training needs will be provided through VEDP’s Virginia Jobs Investment Program.
Editor’s note: This story has been updated to include additional details of CoStar’s acquisition of Central Place Tower.
Dove Landing, a 318-unit apartment complex in Virginia Beach, has changed hands, Berkadia announced Jan. 31.
Chesapeake-based Community Investment Group bought the property for $36 million from Enterprise Community Development, a nonprofit affordable housing provider in the mid-Atlantic, according to a news release from Berkadia.
Dove Landing, at 5301 Justin Court, was built in 1982, renovated in 2015 and has 318 one- and two-bedroom apartments. The community also has a pool, dog park and laundry facility. The property will be improved and transformed, according to the release.
The deal closed Jan. 18.
“We are proud to add Dove Landing to our quickly expanding portfolio of multifamily properties within the Southeast,” Brad Newton, community executive officer of CIG, said in a statement.
Drew White of Berkadia DC Metro, Carter Wood of Berkadia Norfolk and Cole Carns of Berkadia Richmond led the sale on behalf of the seller.
Patrick McGlohn, Brian Gould, Miles Drinkwalter and Natalie Revers of Berkadia DC Metro, joined by Hunter Wood of Berkadia Richmond, secured a $31.85 million acquisition loan from New York-based Ease Capital on behalf of the buyer.
Drew Jackson, former president and CEO of Michigan-based Concorde Holdings, has joined Glen Allen-based real estate company Capital Square as senior managing director of private wealth solutions, the firm announced Tuesday.
Jackson also joined the executive management team.
A Radford University graduate, Jackson has more than 25 years of experience in supporting wealth advisers and clients, alternative investments and developing a transaction-based business model. Before joining Concorde, he was part of the wealth strategies groups at Scott & Stringfellow and BB&T Securities (now Truist Financial).
“We are thrilled that Drew Jackson, a well-respected and exceptionally knowledgeable leader in our industry, has joined Capital Square’s leadership team. He brings deep roots in the [broker-dealer] and [registered investment adviser] communities and is a passionate spokesman on the desirability of alternative investments as a mechanism for tax efficiency, reduced risk and increased returns,” Louis Rogers, founder and co-CEO of Capital Square, said in a statement.
“The demand for alternative investments has never been stronger, but the programs are inherently complex and oriented towards the ultra-wealthy. Drew will help Capital Square expand access to these important investment options and further democratize alternative investments, opening up the platform to broader advisor and investor groups and driving the next phase of Capital Square’s growth.”
Capital Square is a developer of multifamily properties and has been the largest developer of multifamily housing in Richmond’s Scott’s Addition neighborhood. Capital Square currently has eight projects totaling about 2,000 apartments with development costs in excess of $590 million. Since 2012, the firm has completed more than $7.8 billion in transaction volume.
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