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Tag: commercial real estate

Fed’s Fifth District economy sees mild expansion

Economic activity in the Federal Reserve’s Fifth District (a multistate region including Virginia, North Carolina, South Carolina, West Virginia and Maryland) expanded mildly 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 nation’s 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 Nov. 29, 2023 report.

Here’s what the most recent Beige Book edition revealed about the direction the economy is taking:

Employment in the Fifth District grew moderately in the past few weeks, although the tight labor market continued to put upward pressure on wages. Some respondents reported operational changes as a result, like a specialized software company that expects to cut investment plans this year because salaries increased by 15% of the firm’s total revenue and the company needs to continue hiring workers to meet customer demand.

Price growth continued to slow slightly, according to the Fed, but year-over-year inflation remained “somewhat elevated.” Service providers saw a 3.8% increase in prices received, down half a percentage point from the previous reporting period. Manufacturers reported a 2.8% increase in prices received, up slightly from the previous report.

Manufacturing activity in the region slowed in recent weeks. While contacts in some industries tied to consumers’ discretionary spending reported declines, like a wine producer who reported a 30% drop in sales, some contacts saw unexpected increases in demand. An automobile fabric manufacturer reported an uptick in new orders, notable because its customers historically have pulled back on spending each December.

Fifth District ports’ trade volumes were down in recent weeks. Imports were lower year-over-year as wholesalers continued to work on reducing high inventory levels. Loaded exports, though, were up. Spot shipping rates to the East Coast increased because carriers had issues at the Panama Canal and the Red Sea. Container dwell times fluctuated.

Freight volumes for trucking firms were slightly lower than in the prior report, and firms did not see a seasonal uptick. In the full truckload segment, food, medical, automotive and retail shipments provided the greatest demand. Trucking companies did not experience significant backlogs on new equipment orders but occasionally had issues receiving some parts.

Retailers in the Fifth District reported steady to slightly increasing demand and revenues. Travel and tourism respondents reported steady to increasing sales, hotel occupancy rates and passenger air travel.

Residential real estate activity declined modestly due to an expected seasonal slowdown. Home prices increased moderately, while days on the market increased slightly but remained below historic averages. Construction costs had moderated, builders reported, but shortages of some building materials and specialty subcontractor labor continued.

Commercial real estate market activity was flat in the previous few weeks. The retail segment remained strong, particularly among fast casual restaurant chains. Class A office space tightened as firms upgraded their space and moved away from central business districts. Construction projects were largely limited to the industrial and multifamily sectors.

In the financial sector, loan demand continued to soften modestly. The biggest slowdown in demand was in residential mortgage lending. Deposit balances remained flat, and institutions continued to see competition for available funds.

Overall revenues and demand for services for nonfinancial service providers in the Fifth District remained stable. Competition put pressure on pricing and maintaining current clients. Firms reported wages and workforce availability were continuing challenges.

Suffolk industrial property sells for $7.5M

An industrial warehouse building in Suffolk has a new owner.

American Industrial purchased the 256,800-square-foot industrial warehouse building on 11.6 acres from Nansemond Cold Storage for $7.5 million, according to a Dec. 29, 2023, Cushman & Wakefield | Thalhimer news release.

American Industrial will upgrade and improve the property, which is located at 115 Dill Road, to meet demand for mid-sized distribution space starting at 36,000 square feet.

William C. Throne, of Cushman & Wakefield | Thalhimer, handled sale negotiations on behalf of the seller.

Breeden Construction completes Newport News apts.

Richmond-based Breeden Construction has finished work on the Lift & Rise on Jefferson, a community with 81 townhomes and garden-style apartments in Newport News.

The $18.5 million project, done for the Newport News Redevelopment & Housing Authority and Pennrose, a Philadelphia-based developer, started in June 2021 with cleanup and preparation of land on Jefferson Avenue and 28th Street, and then three buildings were constructed. Breeden Construction was the general manager.

The development has a community room, commercial space, an on-site management office, a fitness center and rooftop terrace, along with the 81 apartments. It will have both affordable and market-rate apartments and is part of the greater Marshall-Ridley Neighborhood Transformation Plan.

“Being involved in this neighborhood transformation plan has been a privilege,” Brian Revere, president of Breeden Construction, said in a statement. “This project has been beyond a mere construction endeavor; it has enabled us to forge meaningful relationships and open doors to new prospects within the community. The positive impact has been far-reaching and beneficial for all parties involved.”

Marwaha adds Petersburg apartments to portfolio

Henrico County-based real estate investment and management company Marwaha Investments purchased a 34-unit apartment building across the street from its other properties in Petersburg and intends to rebrand it as part of Dunlop Street Lofts.

The nearly 35,000-square-foot building, located at 310 N. Dunlop St., has apartments between 600 and 1,000 square feet. Marwaha, which bought the property for $3.1 million from an investor in Virginia Beach, plans to renovate the apartments into Class A properties. The work will completed in the next 60 to 75 days, including improving the drainage system to prevent flooding in lower-level apartments; the roof has already been replaced. The building is currently 83% occupied.

Tom Rosman, Ryan Rilee and Justin Sledd of One South Commercial represented Marwaha in the deal.

The acquisition is part of a larger plan for Marwaha.

In January 2023, Marwaha Investments purchased several buildings including Dunlop Street Lofts at 214 Dunlop St., Union Street Lofts, Market Street Lofts and South Street Lofts for $17 million, from RREAF Holdings, a Texas real estate investment trust. The building at 214 Dunlop St. has 64 units between 500 square feet and 1,200 square feet each, ranging from studios to one-bedroom and two-bedroom apartments.

“Our plan has been to increase the operational efficiency of the building and providing comfortable and Class A apartments to our residents,” Gagan Marwaha, principal of Marwaha Investments, told Virginia Business. “We have spent [$500,000] on deferred maintenance such as roofs, HVAC, landscaping, updating some of the apartments with Class A finishes, lighting [and] updating [the] security system, elevator and sprinkler system.”

Renovations to 214 Dunlop St. were completed in July 2023.

Marwaha has increased occupancy from 66% to 97% as of Jan. 5 and has plans to expand the property by acquiring a 1.5-acre adjacent parcel at the corner of Dunlop and Commerce streets and converting it into a community part for its residents. It will have a dog park, children’s park, grills and open areas and will be accessible to all 10 buildings in Petersburg, Marwaha said.

 

 

Three Norfolk retail buildings sell for $3.3M

Three retail buildings on a portion of a site used for commercial auto sales and service in Norfolk sold for $3.3 million on Dec. 22, 2023.

Michael Sifen Inc. purchased an approximately 5.39-acre portion of 7520 N. Military Highway from Freedom Industrial. The site includes a roughly 30,188-square-foot building, a two-story, roughly 3,030-square-foot building, and an approximately 11,112-square-foot building, according to Colliers. Norfolk property records list commercial auto sales and service as the property use, and the remaining portion of the property holds a Tesla store and service center.

Jeff Parker, Patrick Gill and Chris Read from Colliers represented the seller.

Virginia Beach retail building sells for $5.5M

A retail building in Virginia Beach sold for $5.5 million on Dec. 18, 2023.

Located at 5169 Virginia Beach Blvd., the freestanding retail building is 59,162 square feet, and the plot of land is almost 136,999 square feet, according to city property records. The current tenant is a Havertys Furniture store.

5169 VB BLVD LLC purchased the property from OLP Havertportfolio. Pat Mugler and Ricky Anderson from Colliers represented the buyer.

8-story office building in Fairfax County sells for $9.5M

An eight-story office building in Fairfax County sold for $9.5 million on Dec. 19, 2023.

Located at 4035 Ridge Top Road, the Crown Ridge at Fair Oaks is a 194,699-square-foot Class A office building near the intersection of U.S. Route 50 and Interstate 66. The previous owner recently completed a $1.1 million upgrade, including a common amenity area for tenants that includes conference facilities, private meeting rooms and lounge areas with TVs, a gas fireplace, a shuffleboard table and a kitchen area, according to a Cushman & Wakefield | Thalhimer news release. Amenities also include an on-site café and a fitness center with showers, lockers and towel service.

WTHHWD bought the property from Crown Ridge HQ7. Brothers Jamie A. Scully in Cushman & Wakefield | Thalhimer’s Fredericksburg office and David Scully from Cushman & Wakefield | Thalhimer’s Tysons office handled the sale negotiations on behalf of the buyer.

Bon Secours tops off new Suffolk hospital

Bon Secours held a topping-out ceremony Thursday for its $80 million, 98,000-square-foot hospital, Harbour View Medical Center, in Suffolk, expected to be completed in 2025.

The surgically focused hospital will have 18 medical/surgical beds and four operating rooms and serve as an extension of the services offered on the campus, which currently has an emergency department, outpatient imaging, outpatient lab services, an ambulatory surgical center and physician practices. The services will be expanded to include a hospital with inpatient beds and operating rooms.

In the ceremony, a construction crew lifted the final steel beam on the new medical center, which had signatures from doctors, nurses, associates and community members.

Bon Secours broke ground on the hospital in October 2022.

Roanoke apartment complex sells for $7.25M

Mount Pleasant Villas apartments, a 90-unit community in Roanoke, has changed hands.

Raleigh, North Carolina-based Sweetbay Capital, a real estate private equity firm, acquired the apartment complex from JC Capital Rutrough for $7.25 million in early December, according to Cushman & Wakefield | Thalhimer. 

It’s the company’s third acquisition in Roanoke.

Clay Taylor from Cushman & Wakefield | Thalhimer’s Capital Markets Group represented Sweetbay Capital in the purchase of the property.

Sweetbay owns multiple multifamily communities in Virginia and the Carolinas. Mount Pleasant Villas is the company’s fourth acquisition.

Henrico greenlights $450M live-work-play community

The Henrico County Board of Supervisors on Dec. 12 greenlit Kinsale Center, a massive redevelopment project in the Willow Lawn area from insurance company Kinsale Capital Group and Richmond-based Marchetti Development. The $450 million mixed-use development is expected to bring nearly 700 residences, an eight-story “high end” hotel, 32,300 square feet of retail and 345,000 square feet of new office space to the 29-acre former Elevance Health (formerly Anthem) campus at the northeast intersection of West Broad Street and Staples Mill Road. 

According to county documents, the project would be developed over several phases, with the first phase including a hotel and mixed-use building, as well as 261 apartments. The second phase would include a residential building with 258 units on the northeast corner at the intersection of Maywill and Thalbro streets. Phase 3 would include two new six-story office buildings and a parking garage with nearly 1,400 spaces along Thalbro Street and at its intersection with Staples Mill Road. Phase 4 would include another new office building at the intersection of Staples Mill Road and West Broad Street and a mixed-use building with 173 units along Staples Mill Road, according to a Henrico County staff report and information presented to the Board of Supervisors.  

The residential buildings would be five to seven stories each, and the office buildings would be around the same scale. The development would have 5-foot-wide sidewalks and may add 10-foot sidewalks along new interior streets. The retail space, taken by upscale boutiques, would be incorporated into the office, multifamily and hotel buildings, 

There are two office buildings already on the site.

One of those buildings, the older of the two, on the north side, will be renovated inside and out “to look like a 2023 modern office building,” said Joe Marchetti Jr., cofounder of Marchetti Development. That building will become Kinsale’s new headquarters and is about 254,000 square feet. Kinsale will take 215,000 square feet and Elevance will use the basement, about 35,000 square feet, he said. It should be ready by fall 2025. The rest of the projects would be delivered starting in 2026.

Marchetti said the focus is to get the Kinsale in its building and then start marketing the other sites as they go forward.

In the county documents, the project is described as “a cutting-edge modern mixed-use neighborhood nested within the vibrant community of Henrico County.” Kinsale Capital Group owns the project, and alongside the developer, Marchetti, Baskervill is the design architect and Kimley-Horn is the civil engineer. 

In this area of the county, near the border with Richmond, there’s an emergence of several communities that are redeveloping as live-work-play centers, said Anthony Romanello, executive director of the Henrico Economic Development Authority.

Marchetti said the property is the gateway to Henrico County, coming out of the City of Richmond, and one of the most centrally located.

One aspect he pointed out as particularly important is that a full-service hotel is included in the plans, which he said is a differentiator for that area. Marchetti said it could have about 150 rooms but the number is flexible.