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byline: Michael O'Connor

Adding a notch

Out of 141,854 Virginia entrepreneurs surveyed in 2016 by the U.S. Census Bureau about their firms, 31% didn’t have an exit strategy; 15% planned to walk away from the business; and 12% planned to sell or transfer ownership to a co-owner.

Another 20% of Virginia entrepreneurs surveyed planned to sell their businesses to someone who was not already an owner of the business. Such was the way things played out for Notch, a technology consulting firm founded in Richmond in December 2014. About three years later, Notch was acquired for an undisclosed sum by Capital One Financial Corp., which was a Notch client at the time. Most of Notch’s employees joined the bank’s Center for Machine Learning.

“I saw the opportunity to carry on what our focus was in a venue or a setting that had a lot of really talented people and a clear mission,” says Paul Hurlocker, a Notch co-founder and former CEO. “It’s still an environment where people can drive change, and there’s just an entrepreneurial spirit.”
David Castillo, managing vice president of machine learning at Capital One, said in a statement that the company is focused on rethinking how banking works and building customer experiences based on data and enabled by technologies like machine learning.

“Prior to Notch joining the Capital One team, we developed a strong relationship partnering on key projects to advance our machine learning transformation,” said Castillo. “Ultimately, we saw that Paul [Hurlocker] and team would be a natural fit to come on board.”

Hurlocker, now a vice president at Capital One’s Center for Machine Learning, says Notch was born out of a desire to create a company with a challenging technical environment that would attract recent graduates. Notch was founded by Hurlocker and David Derr, who also now works at Capital One; the pair had crossed paths while working at Amentra, a consulting startup that later was acquired by Red Hat, a Raleigh, N.C.-based software company. 

“Ultimately, what we talked about was the opportunity to create a company that was focused on machine learning and data engineering,” says Hurlocker.
Derr’s brother, Matt, joined Notch in 2015 as a partner after he finished his doctorate in machine learning from University of California, San Diego. The company that became Notch would go on to deliver over 60 projects to more than 30 clients before the Capital One acquisition, Hurlocker says.

Born in Wilmington, N.C., Hurlocker grew up in Atlanta before moving to Northern Virginia. He studied economics at Radford University, where he began teaching himself how to code.  After graduating from Radford in 1996, Hurlocker worked as a software engineer in the Atlanta area, mostly in the travel industry. His work included building early web-based travel booking sites. He returned to Virginia to work in Richmond for Amentra as the company’s 20th employee. Working there got him interested in “the entrepreneurial journey,” says Hurlocker.

After Red Hat, Hurlocker had stints at Affinion Group, a marketing and advertising firm, and PlanG, a charity donation startup. He is married and has two children.

To observers like Todd Nuckols of Lighthouse Labs, a startup accelerator in Richmond, it’s not unusual for Virginia startups to be acquired by other companies. Nonetheless, he sees that pattern as the exception rather than the rule. Nuckols says Notch’s acquisition exemplifies the way Richmond’s startup market has expanded.

“It says that we have the talent to innovate in the technical landscape and be successful at building companies that are attractive to external purchasers, either for their talent or for the marketplaces that they build and represent,” says Nuckols. “We’re no longer just a professional-services, IT town. We can build startups, and they can do meaningful work and be attractive to other markets and other buyers.”

Virginia Business sat down with Hurlocker for an interview in February in a conference room at Capital One’s West Creek Campus in Goochland County. Below is a transcript of the conversation that’s been edited for clarity and length.

Virginia Business: Why was the acquisition by Capital One a good move for Notch?
Hurlocker: We created a pretty high-power team, in my opinion, and I saw the opportunity to carry on what our focus was in a venue or a setting that had a lot of really talented people and a clear mission. It’s really appealing that Capital One is still run by its founder.

Being in Richmond, you’re generally aware of what Capital One is doing. They’ve been pushing the envelope for quite some time. I guess we have been pushing the envelope now with the move to the cloud, and that started some time ago, and investments in key areas and technology that enable machine learning at enterprise scale; that’s an environment that makes people like us really excited about building solutions.

 

VB: One thing I hear sometimes about the Richmond startup scene is the feeling there isn’t enough capital to really grow in Richmond the way you might in another bigger market. Do you find that to be true?
Hurlocker: We were bootstrapped, so we had no external investors. I do think there have been time periods where it can be difficult. I know there are groups of investors that have organized, too. Just having a single point of contact, I think, is huge.

Before, it was all about working for larger companies. You never really see people depart. Now, I think you’re seeing a healthy mix of people deciding to go after something a little later in their career, which is frankly what I did, or coming straight out of an incubator relatively new out of school and doing that.

 

VB: What advice would you give to other entrepreneurs?
Hurlocker: I’ve had time to think about all of that because when you’re in it, it’s pretty crazy but good. You’re just so engrossed in it and that’s the way it should be. I read this book, “The Hard Thing About Hard Things,” by Ben Horowitz. I think that it’s cliché, but he basically was like, “There is no formula.” It’s about how you react, how you keep your energy and your focus, but no one can tell you what that journey is like. I think that you have to think about services, companies and products of companies differently in the technology realm.

We believed that, basically, the viability of our business was us being able to grow it and get opportunities. That was our proof that we should grow: It was that we could go and build our business our way. That’s hard to scale sometimes with products. Sometimes it takes a different approach there. It’s all-encompassing and it impacts the people in your life.

I had a family when the journey started. We all went through it together. It was pretty awesome and they were very supportive.

 

VB: What is machine learning?
Hurlocker: It’s a merging of math and engineering, essentially, to do things like to predict whether there’s been a fraudulent activity on an account or to determine how to best engage a customer when they’re on the mobile app or our website, trying to determine why a customer may be calling in and getting them to service more quickly. Another way to talk about it is everyone has some experience with a voice like Siri; those types of interactions use machine learning as well.

 

VB: What’s the goal of machine learning?
Hurlocker: It’s still a nascent early field, but I think what it’s all about is augmenting and enriching the human experience.

 

VB: Since the dawn of time, there have been skeptics of new technologies. Are there hazards with machine learning that society should be worried about?
Hurlocker: One of our areas of focus is around explainability and I think that’s good. Explainability is basically showing how you came to certain decisions or predictions or how you basically created certain experiences, and not just trusting that the model is a black box and it’s going to make the right decision. We’re heavily invested through university partnerships and internal dedicated R&D teams to really drive that.

We need to understand the power of these things and do them in a responsible way. We have used data science since the beginning of the company, and this, in many ways, is an evolution of that type of thing. It’s basically like the merging of technology and data science at really large scale with big datasets and things like that. Ultimately, we have explain­­­­­­­­-abil­­­­­ity and fairness baked in.

 

VB: Does the rise of artificial intelligence and machine learning and its potential impact on children worry you at all as a parent?
Hurlocker: I tend to be optimistic about the power of these things. Generally, we are in control, and it’s up to us how these things are used. When I say “we,” I mean us as a society. I think it’s important to think about these things. There are things we need to be mindful of, but I believe in the value that technology brings, and in particular, that machine learning is bringing. I don’t really have those fears.

The pot thickens

It’s a sunny May afternoon in New Kent County, but dozens of patrons are gathered indoors amid an arcadelike chorus of chirping touch screens displaying bright red cherries, neon lemons and ostensibly lucky numbers.

Players at Rosie’s Gaming Emporium at Colonial Downs withdraw cash from one machine and deposit it in another. They tap buttons at electronic games with titles like “Super Vegas Royale” and “Slush Funds.” Cartoon horses flash at the top of each screen. Security guards quietly stand watch as people make bet after bet. Bright signs display recent jackpots and encourage people to test their chances: “The next big win could be yours.”

“I can’t believe they got away with it in Virginia,” a patron exclaims inside what is the bleeding edge of legal gambling in the state.

The slot machinelike games at Rosie’s are technically not slot machines. Rather than random outcomes, Rosie’s machines are based on actual, albeit anonymous, historic horse races and have been legal in Virginia only since last year. The race being wagered on is identified onscreen after players make their bets. 

Such distinctions can get lost amid the glow of the gaming room floor, however important the technological differences might — or might not — be to state lawmakers.

“I’m not the moral police,” says state Sen. Mamie E. Locke, a Democrat who represents part of Portsmouth, when asked about her position on casinos. “We have many infrastructure needs. We have transportation needs. We have education needs. And this could be a source of revenue that could meet those needs.”

The uncertain outcomes being bet on at Rosie’s mirror the current hopes for casinos in Virginia, where legal gambling, for now, is limited to the kinds of games Rosie’s offers (historic horse racing, also known as instant racing), as well as horse betting, online fantasy sports, the Virginia Lottery and charitable games like bingo.

The push to open Virginia’s first full-fledged casino with table games such as blackjack and roulette has no shortage of players, but whether they’ll be able to get in on the action is an open question.

Current legislation
Legislation this year created a path to expand gambling in five economically distressed cities, but Virginia needs to deal a number of cards before would-be casino operators can claim a winning hand.

Introduced by state Sen. L. Louise Lucas, a longtime Democrat from Portsmouth, SB1126 authorized casino gaming to be regulated by the Virginia Lottery Board. The bill limited casino gaming to Portsmouth, Norfolk, Richmond, Danville and Bristol. However, the legislation goes into effect only if it’s re-enacted in the 2020 General Assembly session. Each locality would be limited to having one casino and would have to hold a referendum to approve any casino proposal. Only casino proposals that represent a minimum capital investment of $200 million would be eligible to obtain an operator’s license.

Gov. Ralph Northam signed SB1126 into law after a number of casino bills were debated in 2019, including legislation that would have allowed localities to hold votes on casino proposals this fall.

Lawmakers opted instead to take more time, directing the Joint Legislative Audit and Review Commission (JLARC) to produce a gaming study by November. JLARC is working with two gaming industry consultants, The Innovation Group and Regulatory Management Counselors, on the report.

JLARC Associate Director Tracey Smith, who is supervising the study, says it will address a few broad questions: If Virginia chooses to expand legalized gaming, how should it be governed, regulated and administered? What approaches to expanded gaming in Virginia would have the best fiscal and economic impacts for localities and the state? And what other policy considerations should inform decisions about whether and how to expand gaming?

“Our starting point will be looking at what would be … the economic impact of locating a casino in the localities that are identified in the legislation,” Smith says.

JLARC is aware that Virginia’s Native American tribes also have an interest in the future landscape of gaming in the state, Smith says, but the study is primarily focused on the potential impact of commercial casinos, as opposed to tribal casinos. The social impact of casinos and gambling also will be included.

The study will not, however, include a recommendation on whether Virginia should expand gaming: “Ultimately that is a policy call that the General Assembly has to make,” says Smith. “Our job in this study is to provide the General Assembly with enough information to really make that decision.”

The players
As the regulatory framework is explored, a number of players have been making moves in anticipation of a new era of gambling in Virginia.

Regardless whether Virginia legalizes commercial casinos, the Pamunkey Indian Tribe, which was federally recognized in 2015, could open a casino through a regulatory process with the National Indian Gaming Commission, says tribal spokesman Jay Smith. The Pamunkey are working on plans to open a resort with a casino in partnership with Norfolk on about 20 acres owned by the city on the Elizabeth River near Harbor Park Stadium. For casino games, federal law requires a compact between a tribe and state government that addresses revenue sharing.

If Virginia legalizes casino gaming, then the Pamunkey would pursue a casino in Norfolk through the state regulatory framework as well. That’s because the state could be quicker to sign off on the Pamunkey’s casino plans than the federal government, allowing the tribe to tap into potential revenue sooner, Smith says.

“They’ve been pursuing this federal path long before the legislation this past session that brought forth commercial gaming,” Smith says. “The tribe didn’t want to be left behind, and so we said, ‘If the state’s ready to move forward, so are we.’”

The casino is part of a larger effort by the Pamunkey to build tribal assets such as a cultural museum or a senior-assisted living facility in the area of its ancestral home, which stretches roughly from Richmond to the Virginia coast, Smith says. Investor Jon Yarbrough has acquired 600 acres in New Kent County with the intent of transferring the land to the Pamunkey as part of the tribe’s development plans, Smith says.

Asked whether the Pamunkey are eyeing a Richmond casino, Smith was noncommittal: “The tribe is focused on its proposed project in Norfolk but continue to look at other properties for a number of economic development, cultural and housing development opportunities.”

Elsewhere in Hampton Roads, a $700 million waterfront development with a casino is being eyed for Portsmouth. John Lawson, the executive chairman of W.M. Jordan Co., is in talks to develop the project on a 6-acre site owned by the city. Lawson says that Virginia Beach hotelier and developer Bruce Thompson could be a partner in the project. Lawson and Thompson have worked together on projects since the late 1990s, including the $81 million renovation of The Cavalier Hotel in Virginia Beach.

In light of the Pamunkey Indian Tribe’s plans, does Lawson think the Hampton Roads market is big enough to handle two casinos? “The first casino in the area should be successful,” Lawson says. “Two would be a challenge.”

At the other end of the state, two local businessmen — United Co. Chairman and CEO Jim McGlothlin and Par Ventures President Clyde Stacy — have floated plans to redevelop a defunct shopping mall in Bristol into a resort and casino. They envision a casino, a hotel, restaurants and other amenities.

“While we are evaluating a range of lodging, dining and entertainment options, our primary focus at this time is to achieve final passage of the legislation during the 2020 [General Assembly] session and passage of the local referendum,” says Andy Poarch, a spokesman for the Bristol Resort & Casino team.

“We plan to be ready to hit the ground running at such time as the General Assembly and the residents of Bristol give us the green light to proceed.”

In Southern Virginia, Danville leaders are also ready to welcome a casino. In February, Danville City Council unanimously passed a resolution in support of legislation that would allow a casino to open in the city with voter approval.

Danville also has been identified as a possible home for historic horse racing machines. Colonial Downs Group announced at the end of May that it had submitted paperwork to begin the process of voter referendums to open Rosie’s Gaming Emporium locations in Danville and Dumfries. There already are Rosie’s locations in New Kent, Vinton and Richmond. Another Rosie’s is planned for Hampton. Additionally, Colonial Downs Group plans to reopen the Colonial Downs racetrack to Thoroughbred horse racing in August. The company is keeping a close eye on the state’s gaming study.

“We have offered to be a resource for the study as the second-largest gaming provider in Virginia, following the lottery,” says Mark B. Hubbard, a spokesman for Colonial Downs Group. “The results of the study and any action during the 2020 Virginia General Assembly session will help guide our future efforts.”

The Virginia Lottery is also watching to see what comes of the JLARC report, says spokesperson John Hagerty. He downplays the possibility that an expanded casino market would eat into lottery ticket sales. “Maryland saw a relatively small but detectable lottery sales decline as it opened … [its] casinos, but those losses were only temporary,” Hagerty says.

Danville Vice Mayor J. Lee Vogler views the possibility of both a Rosie’s and a casino opening in his city as a great opportunity that could help fund necessities such as public safety and education. However, he says, “We should allow the citizens of our city to make that ultimate choice.”

Gambler’s fallacy?
Not everyone is ready to embrace casinos as engines of economic development. The Rev. Dewey Williams of Bristol’s Belle Meadows Baptist Church told Virginia Business in October that casinos would be built “on the backs of people who will lose $30,000 and $40,000 they don’t have.”

Del. Leslie R. Adams, a Republican who represents a district just outside Danville, opposes casinos but says he’s willing to learn more about them. Some studies have tied the presence of casinos to an increase in gambling addiction, though casino advocates dispute this.

“The way things stand now, I don’t see this as good for our region,” Adams says. While he recognizes Southern Virginia isn’t as prosperous as other parts of the state, “that doesn’t mean, well, any opportunity ought to be embraced fully, particularly when it comes with these social concerns.”

While multiple casinos could open across the state, some think if even one new casino opens in Virginia, it will do so at a disadvantage.

Richard McGowan, a Jesuit professor at Boston College who researches the economics of gambling, thinks Virginia is entering the game far too late. The commonwealth will face considerable competition from Maryland, which has six casinos, and West Virginia, where five are open. There were 979 casino gaming locations open across the nation as of December, according to the American Gaming Association trade group.

“Usually a casino depends on patrons coming from outside its jurisdiction,” says McGowan, who some call “Padre Pecado” (or the Priest of Sin) due to his area of expertise. “While casinos are certainly much more socially acceptable and tolerated, they will not provide the cash windfall that advocates will maintain.”

While McGowan says casinos opening near resorts could fare better, history doesn’t bode well for these kinds of projects if Atlantic City is any measure.
Atlantic City embraced casino gambling in 1978, with one reporter observing at the time, “The city will never be the same again.”

Between 2014 and 2016, five of Atlantic City’s 12 casinos closed before the market stabilized with fewer operators, according to The Associated Press. Today, Atlantic City is home to nine casinos, after the Hard Rock Hotel & Casino and Ocean Casino Resort opened last year.

Gaming revenue for casinos in New Jersey has been on the rise, but operating profits are down, according a report from The Press of Atlantic City newspaper. In the first quarter of this year, revenue from Garden State casinos was up 17.6% to $704.6 million, but profits were down 29.6% to $87 million, reflecting an increasingly competitive environment in which operators are spending to woo customers and stand out from the pack.

Virginia’s casino legislation appears to skirt some of those pitfalls as the General Assembly would allow just one casino each in five cities throughout the state, in contrast with the density of Atlantic City casinos. In fact, McGowan says the commonwealth could reclaim some of the tax revenue the state leaves on the table when Virginia residents visit casinos in other states.

The volume of annual casino tax revenue flowing to New Jersey’s coffers peaked at more than $500 million in 2006 — 38 years after the state began collecting it. Since then, casino tax revenue has been on a more or less steady decline. In fiscal year 2018, New Jersey’s cut of tax revenue from casinos was $217 million.

Closer to home, West Virginia’s commercial casinos saw their sixth year of declining revenues in 2017, according to an American Gaming Association report. Commercial casino revenue dropped 4.6% to $624.6 million in 2017 as competition increased from neighboring states, the report said. West Virginia collected $293 million in tax revenue from casinos in 2017 — down from $304.7 million in 2016.

And to our north, Maryland has seen gains since its 2012 referendum to expand legalized gambling beyond slot machines to include dice and card games. Casino gaming revenue in Maryland has risen steadily over the last five years, from $608.3 million in fiscal year 2013 to $1.6 billion in 2018. In fiscal year 2013, $284.34 million generated by casinos went to the Maryland Education Trust Fund. That figure rose to $496 million in fiscal 2018.

Advocates of expanding gaming in Virginia laud examples of tax windfalls such as this, but a 2015 study commissioned by Old Dominion University throws cold water on claims about the tax money casinos could bring to localities. The ODU study examined the likely economic impact a new casino would have on Hampton Roads. The report was done by Douglas M. Walker, an economics professor at the College of Charleston in South Carolina and the author of the book “Casinonomics: The Socioeconomic Impacts of the Casino Industry.”

Walker argues that overall tax revenues might increase after a casino opens in Hampton Roads, but they may do so at the expense of other local businesses.

“While the evidence suggests that, on average, the introduction of a casino will lead to increases in overall tax revenues, the relationship is not as strong as one might imagine,” Walker wrote in his 2015 report. “Spending in casinos may replace some spending that would have occurred in other retail, restaurants, bars, hotels and amusement sectors.” Walker adds that a decrease in revenue flowing to other parts of the local economy would be smaller, though, if the casino attracts people from outside of Hampton Roads.

Given all of this, Walker wonders why politicians are often adamant in their support for casinos as a tax revenue tool: “One possible explanation is that casinos provide a large political benefit to policymakers because it is often much easier to increase casino taxes than it is to raise income, sales or property taxes.”

Walker goes on to say that an expansion of legalized gambling likely will impact existing legalized gambling industries such as the Virginia Lottery. For example, Virginia gamblers could substitute buying a stack of lottery tickets for a trip to the slot machines. In this way, consumer spending on gambling — along with any accompanying tax revenue — would simply shift from one pool to another rather than creating a new market.

As one might expect, the gaming industry touts the economic benefits casinos bring to communities. Casey Clark, a spokesman for the American Gaming Association, says casinos invest heavily in communities, create jobs and increase tourism.

“There are antiquated stereotypes about gaming that continue to persist that … requires some education of people to really understand what it means when these sophisticated, multinational businesses invest in communities,” Clark says.

Whatever the sticking points may be, plenty of state politicians appear ready to wed casinos to the Virginia Way — or at least let voters choose whether that’s what they want.

State Sen. Bill Carrico, a Republican who represents Bristol, introduced legislation this past session related to casino gaming that was incorporated into SB1126. He says he wouldn’t personally vote in favor of a casino but he supports letting residents decide.

“I’m letting the democratic process take place by allowing them to vote on it,” Carrico says.

Portsmouth Democrat Del. Stephen E. Heretick echoes Senator Locke’s enthusiasm for casinos.

“Trying to invent gaming laws … out of thin air is going to be a big challenge for us,” Heretick says, adding that states such as Maryland and New York have a big head start on Virginia. “We want to make it uniquely Virginian.”

YOLO: Tattoos and mortgages

Despite all the Googling, number-crunching and HGTV-watching, Ingrid Medrano still wasn’t ready for just how unpleasant the backyard poison ivy would be at the home she bought in Richmond about two years ago. 

“Oh, God, it was bad,” says the 30-year-old nonprofit worker. “The Realtor, to his credit, he did tell us about it. They were like, ‘There is poison ivy out here.’ And we were like, ‘meh.’”

Medrano, an immigrant from El Salvador, says she and her fiance felt pressured to jump on buying their home or risk losing it to another buyer. 

Heated competition in real estate markets across Virginia has fueled real estate FOMO (fear of missing out) among Virginia’s millennials, according to real estate agents. They say it hasn’t been uncommon during the last year to see bidding wars break out between 20-something and 30-something homebuyers over starter homes.

Brad Thomas, a Roanoke Realtor with Mountain View Real Estate, recently took some millennial buyers to a house that had hit the market that morning. By noon, the sellers had three offers. Like other metro areas statewide, Roanoke has a scarcity of available starter homes, leading to a sellers’ market, with homes fetching multiple offers within a few days.

As wages rise and older millennials reach their late 30s, the generation previously stereotyped for being tattooed and selfie-obsessed is settling down and buying homes in increasing numbers.

About a third of 2017 home sales in the commonwealth went to millennials, according to an analysis by Virginia Realtors Chief Economist Lisa Sturtevant. Nationally, millennials accounted for 37% of all homebuyers from June 2017 to June 2018 — making them the most active generation of homebuyers for the sixth year in a row, according to the National Association of Realtors’ 2019 Home Buyer and Seller Generational Trends study.

“We talk a lot about the millennials wanting to be footloose and wanting to be not tied down,” Sturtevant says, “[but] this demographic cohort is moving into an older age group and, as interest rates are still favorable, it suggests that 2019 should see an increase in [millennials] buying homes.”

All the homebuying is leaving many millennials shaking their heads, however. About 80% of homeowners ages 18 to 34 have at least one regret about their home, compared with 65% of baby boomers, according to a recent Zillow housing survey.

For her part, Medrano wishes she had bought a house that had a half-bath and guest room. “We didn’t really know what we needed until afterwards,” she says.

Homes sold in the Central Virginia/Richmond housing market spent an average of 32 days on the market in May, about the same as a year ago, according to a Long & Foster Real Estate report.

Nationally, homes last year stayed on the market for an average of about 60 days.

“I’m definitely seeing and talking to other agents in my office about them getting into bidding wars,” says Richard Sena, a Richmond real estate agent with Small & Associates Inc.

In addition to making higher offers, buyers are having to find other ways to make their bids more attractive to sellers. Not many millennials can do cash offers but they are recommended if possible, Sena says. Buyers are also offering shorter closings, paying for home inspections or repair fees, and are adding clauses so their offers automatically rise in response to competing bids.

But Sena counsels his buyers to accept that they may be outbid and should stick to a price ceiling. “What is that number for this house that you can say, ‘You know what? I’m glad the [other] guy got it,’” he says.

The American Dream
The Virginia area with the highest rate of millennial homeownership in 2017 was Gainesville in Prince William County. Seventy percent of people ages 25 to 34 there were homeowners, double the statewide rate, Sturtevant says. Contributing factors likely include affordable housing stock and a large number of Hispanic millennials, she says. The Hispanic population represented 62.7% of the increase in U.S. net homeownership from 2008 to 2018, according to the National Association of Hispanic Real Estate Professionals.

“To our discredit, I think a lot of us immediately kind of think [of millennials as] white people, higher-income urban dwellers riding around on their scooters and driving Uber, but there’s a significant share of this young adult population that are racial and ethnic [minorities] and first- and second-generation immigrants for whom homeownership is still very strongly part of the American dream,” Sturtevant says.

Maclaine DeLorie, a Realtor in Prince William County with Move4Free Realty, says the Northern Virginia starter home market is very competitive, raising buyers’ concerns that they may be overpaying.

“Houses are selling at list, if not above list, sometimes with multiple offers within a week or so of being on the market,” DeLorie says, adding that, fortunately for buyers, “interest rates are so low that even if you’re paying whatever the asking price is, even if there is no negotiation, the houses are priced according to the market and the appreciation is insane.”

DeLorie has also noticed that millennial buyers generally do their homework. “It’s not abnormal for them to do research and be informed about what the normal price ranges are or even having information such as knowing it’s a seller’s market.”

The Northern Virginia real estate market also is being impacted by the flood of millennial workers expected to move to the region to work at Amazon’s HQ2 headquarters in Arlington, which will hire more than 25,000 workers during the next 10 years.

On a recent Friday, Stack received an email from a millennial couple requesting an appointment-only listing viewing the next day. “[They were] flying in from Seattle on the red-eye,” Stack says. “It ended up being Amazon buyers.”

Risk averse
Compared with millennials, Generation X represented about 40% of homebuyers when they were in their 20s and 30s, Sturtevant says.

“There is still a sense that young homebuyers are still not quite to the level of young homebuyers [from] past generations in terms of their market participation,” Sturtevant says.

When millennials left college during the Great Recession, they were burdened with student debt and struggled to find jobs during a period of low wage growth, Sturtevant says. Many delayed getting married and having kids, factors that typically motivate first-time homebuyers, Sturtevant says. Millennials are getting married and having kids about five years later than Gen Xers, she says, and their economic experiences have translated into risk aversion.

“This generation was really kind of shaken by the housing market downturn and recession, and so they’re very cautious,” Sturtevant says. “They saw maybe their parents lose equity in their home or they saw neighbors being foreclosed on.”

Pat Stack, a Northern Virginia Realtor affiliated with Weichert Realtors, has also found millennial buyers to be careful. “They don’t buy on impulse. As a generation, they have a very strong awareness of the precariousness of the economy,” Stack says. “Twenty years ago, people didn’t feel that way, and people would buy a house after seeing it once. Millennials tend to look at it three, four times.”

On the whole, Stack says, her millennial clients tend to have high incomes but not as much cash in reserve, making them less inclined to buy homes requiring renovations.

Virginia’s existing housing inventory has struggled to meet millennials’ demand for affordable starter homes, Sturtevant says. And if they can’t find it here, they’ll look elsewhere.

“There’s a sense that folks are leaving [Virginia] once they’re looking around at their homebuying options,” the economist says. “We’ve heard it even within the state: people leaving Northern Virginia for lower-cost parts of the state.”

Vaping is youth “emergency,” Kaine says

On Monday, speaking at a Henrico County library just two miles from Altria Group Inc.’s corporate headquarters, U.S. Sen. Tim Kaine held a roundtable discussion about the teen vaping epidemic — a problem largely fueled by Juul e-cigarettes, a product in which Philip Morris USA’s parent company holds a 35% stake.

“It’s an emergency facing young people,” Kaine said Monday, talking with a small group of youth health advocates during the event at Henrico’s Libbie Mill Library. “The progress that we've made in wiping out youth smoking has been completely turned around because of vaping and e-cigarettes.”

U.S. Surgeon General Jerome Adams declared youth e-cigarette use an epidemic in December, repeatedly citing Juul by name in his advisory statement. The move came a month after the Centers for Disease Control and Prevention and the Food and Drug Administration released a report stating that e-cigarette use among high school students increased 78% from 2017 to 2018.

Juul Labs Inc.’s revenues skyrocketed from 2017 to 2018, rising from $200 million to $1.3 billion. The company projects its sales in 2019 will reach $3.4 billion.

Kaine, who has previously joined other senators in calling on Juul to take action to limit underage usage of its products, also discussed the bipartisan Tobacco-Free Youth Act legislation he’s co-sponsoring with Senate Majority Leader Mitch McConnell. The act would raise the nationwide minimum age to buy all tobacco products and e-cigarettes from 18 to 21. The proposed law would apply to military members and it wouldn’t preempt state and local laws that are tougher on tobacco-related products. The legislation would also incentivize states to enact their own laws to raise the age limit to 21.

Virginia’s General Assembly passed legislation this session raising the age for buying tobacco products and e-cigarettes to 21 in a law set to go into effect July 1, a move that was supported by Altria. The new state law includes an exemption for members of the military ages 18 to 21.

Juul e-cigarette device

Altria spokesman David Sutton said in a statement that the company welcomes Kaine's leadership on what it called an important issue and strongly supports raising the age restriction to 21 for all tobacco products.

“By raising the minimum age to 21, no high school student will be able to purchase tobacco products legally, adding another hurdle to help reduce social access,” Sutton said.

Both Altria and JUUL emphasized the role e-cigarettes play for adult smokers looking for an alternative to traditional cigarettes. Sutton said new technologies like vaping offer promise as an option to meet that demand.

“The FDA has made clear that the future viability of these products is in jeopardy unless more is done to reverse the underage e-vapor use trend,” Sutton said. “Raising the legal age to 21 is a pivotal step to addressing this issue.”

Altria acquired a 35% stake in JUUL in a December 2018 deal that valued JUUL at $38 billion. Altria stock opened at $48.11 a share on Monday after falling 4.5% a share on Friday. The drop coincided with a Bloomberg report on comments from the former commissioner of the Food and Drug Administration that JUUL may struggle to get its e-cigarette approved under new rules.

“We do not want non-nicotine users to buy JUUL products, and are committed to preventing underage access to our products,” JUUL spokesperson Ted Kwong said in a statement to Virginia Business. “We strongly support raising the national minimum purchasing age for all tobacco and vapor products to 21, and have implemented a comprehensive action plan to combat underage access, appeal, and use of JUUL products.”

JUUL cited steps it has taken in the last year such as restricting flavors and winding down its Facebook and Instagram accounts as ways the company is trying to reduce teen Juul use.

Levco expands Hampton Roads holdings

A Richmond real estate investment firm has expanded further into the Hampton Roads market with its latest acquisition.

Levco Management this month completed the $18.275 million acquisition of the Heritage at Settlers Landing apartment community at 553 Settlers Landing Road in Hampton. Built in 2007, the property comprises three four-story buildings. The sellers in the deal were Collins Enterprises LLC and Drucker & Falk.

Levco also owns St. Croix Apartments in Virginia Beach, which recently underwent a $2.5 million renovation. The firm owns eight multifamily properties in Richmond. Levco also has an affiliated construction company called Levco Construction.

Jared Levin, Levco’s managing partner, says his firm financed the deal through a combination of equity and debt. Levco was drawn to Heritage at Settlers Landing by its curb appeal and floor plans, he says. The property is in downtown Hampton, which has a vibrant waterfront with a mix of restaurants and shops.

Levco’s core strategy is acquiring existing apartment communities when the firm sees an opportunity to make upgrades and reposition the properties to better compete in the local market, Levin says.

“We see a tremendous amount of demand for apartments which have rents that are lower than the brand-new luxury properties but are still well-operated, -maintained and have modern finishes and amenities,” he says. “Our goal is to acquire three to four multifamily communities per year with similar business plans as Heritage.”

Levco plans interior upgrades to help Heritage at Settler’s Landing. Planned renovations include new stainless-steel appliances, washers/dryers, flooring, light fixtures, cabinet hardware, faucets and granite countertops in select units.

The 140-unit development has one-, two- and three-bedroom units with monthly rents ranging from $925 to $1,750. Levin says the property is 95% leased.

Levin says the Hampton Roads market has lagged in recovering from the recession when compared with other markets.

“Around three years ago we noticed a positive shift in apartment market fundamentals in this region and began targeting acquisitions in the Hampton Roads area,” Levin says.  “The apartment market in Hampton Roads seems to respond quite favorably to pro-active management and upgrading properties.”

Representing the sellers in the deal were Colliers International brokers George “Hank” Hankins, senior vice president; Will Mathews, managing director; Charles Wentworth, senior vice president; Rawles Wilcox, senior vice president; Victoria Pickett, vice president; and Clay Ellis, associate, with the Colliers Mid-Atlantic Team.

The Heritage at Settlers Landing had been on the market for about five or six weeks before it sold, says Hankins.

The Hampton Roads multifamily market has seen rising rents from year to year and solid occupancy. A lack of new construction has helped stabilize existing inventory and Hankins expects more multifamily deals to close in the months to come.

Virginia unemployment remains low

Unemployment in Virginia remains below the national rate indicating a healthy economy.

Virginia’s May unemployment rate was 3% — the same as a year ago and in keeping with trends seen in recent months, according to seasonally adjusted data released Friday by the Bureau of Labor Statistics. The state’s April unemployment rate was 2.9%.

The national unemployment rate in May remained at 3.6%, also had changed little from a year ago. At 2.1%, Vermont had the nation’s lowest May unemployment rate, while Puerto Rico’s rate was the highest at 8.5%.

Virginia’s low unemployment rate is indicative of a growing economy and a tight labor market, says economist Robert McNab, director of Old Dominion University’s Dragas Center for Economic Analysis and Policy.

“One of the things we've seen over the last couple years is that the Virginia economy has accelerated,” McNab says. “The pickup in the pace of growth is evidenced in the decline in the unemployment rate not only statewide but also across metro areas in Virginia.”

Hampton Roads, Richmond and Charlottesville had May unemployment rates that were below the statewide rate of 3%, he noted.

The commonwealth’s low unemployment rate means Virginia has a tight labor market that is pushing companies to compete for workers. When companies can’t find new employees, they attempt to hire them away from other firms, McNab says.

Terry Rephann, a regional economist at the Weldon Cooper Center for Public Service at the University of Virginia, noted that in May there were about 10,000 more people employed in the education and health services sectors than in May 2018. The increased number could be a consequence of health systems adding staff in response to Medicaid expansion, he speculates.

Peter McHenry, associate professor of economics and public policy at the College of William & Mary, says the health of the economy is drawing people into the labor force.


“I think the economy is doing well enough that … a lot of the people we could realistically get into the labor force are in the labor force,” McHenry says. “I think job growth might be slowing down a bit because people who want a job for the most part have a job.”

Headshots courtesy Old Dominion University and the College of William & Mary 

Spruced-up NoVA office park adding, relocating tenants

A Northern Virginia office park has landed a new tenant and is relocating two others as demand remains steady in the regional market.

The Willow Oaks Corporate Center in Merrifield has entered lease agreements with Fairfax Radiological Consultants, Hardesty & Hanover and Right at Home. The leases total 30,739 square feet. Willow Oaks includes three buildings totaling 584,003 square feet.

Fairfax Radiological has signed on for 23,829 square feet, and Right at Home, an in-home health-care provider for the elderly and disabled, will occupy 4,069 square feet. Both are moving into the building at 8260 Willow Oaks Corporate Drive. Fairfax Radiological’s suite is under construction, and KBS expects the practice to move into its new space in November. Right at Home is an existing Willow Oaks tenant that will relocate to its new suite in August.

Hardesty & Hanover, an infrastructure engineering firm, has taken 2,841 square feet at 8280 Willow Oaks Corporate Drive. It is a new tenant.

KBS, a private equity real estate company, owns Willow Oaks Corporate Center through KBS Real Estate Investment Trust II. The firm said it bought the office park in 2009 for $112 million.

Stephen Close, KBS senior vice president and asset manager, says that during the past few years his firm has renovated Willow Oaks. Changes have included a 3,000-square-foot café, landscaping and upgrades to restrooms. He did not provide the cost of the renovations.

Other Virginia properties in KBS’s portfolio include office buildings in Clarendon, Herndon, Fairfax and Reston. KBS is based in Newport Beach, California.

According to a Newmark Knight Frank office market report, Northern Virginia office space continues to see steady demand this year after a solid 2018. Net absorption in the first quarter of 2019 was 633,028 square feet – the highest quarterly total since the first quarter of 2018.

Close of KBS says Amazon’s HQ2 plans in Arlington haven’t affected the Willow Oaks or its submarket.

Still, Northern Virginia is proving to be a business-friendly market in light of the recent activity there by Amazon and Nestlé USA, said Marc Deluca, a regional president for KBS, in a press release. Nestlé S.A relocated its U.S. headquarters from California to Rosslyn in 2017, and a Nestlé subsidiary, Gerber Products Co., announced plans last year to relocate its U.S. headquarters from New Jersey to Arlington.

In the Willow Oaks lease agreements, Mark Roberts of Savills Inc. represented Fairfax Radiological; Dan Brennan of Larsen Commercial Real Estate represented Right at Home; and Jude Collins of Cushman & Wakefield represented Hardesty & Hanover. Wes Evans and Steve Hoffeditz of Newmark Knight Frank represented KBS.

Trex to deck out facilities in Virginia, Nevada

Responding to increased demand for recently launched products, a decking materials company based in Winchester has pushed up planned upgrades for its operations in Virginia and Nevada.

Trex Company Inc., a decking and railing materials company, announced last week plans for a $200 million capital expenditure program to increase production capacity at facilities in Winchester and Nevada. Trex expects to fund the capital expenditures mainly from operating cash flows.

Shares for Trex received a bump following the announcement of the investments on June 6. On that day, Trex shares closed at $66.90 a share and the following day they closed at $69.11. On Friday, Trex shares closed at $71.38. Trex was founded in 1996 and manufactures wood-alternative decking products made from recylced plastic and wood.

Trex CFO Bryan Fairbanks says a larger share of the capital investment announced last week will take place in Virginia with the likelihood of adding more employees in Winchester. He could not say specifically how the investment would be split between Virginia and Nevada or how many employees may be added in Virginia.

Fairbanks says Trex had planned to do the investment a year from now but demand has been so strong for new composite decking products it made more sense to make the investments sooner. Trex recently rolled out new products as part of its Enhance line, Fairbanks says. In 2018, Professional Builder magazine included the Trex Enhance Composite Decking line on its list of top 100 products.

Plans call for building a new decking facility in Winchester and installation of additional production lines in an existing building in Fernley, Nev. The expanded production capabilities in Nevada are planned to go live in the third quarter, and Virginia’s expanded capacity is planned to begin in the first quarter of 2021.

The announcement comes as Trex’s Nevada plant has faced adversity, according to the company’s most recent quarterly report with the Securities and Exchange Commission. Trex’s Nevada facility had two equipment failures during the first quarter. The failures resulted in the loss of two lines for about 30 days apiece. Those lines are now back in full production. Fairbanks says the new investments are not related to the equipment failures.

“We expect to experience reduced throughput and related expenses in Nevada during the second quarter, but at a reduced rate compared to the first quarter,” the company stated in its quarterly report. “Across our manufacturing facilities, the new product startup costs, the operating inefficiencies from lower run rates and the equipment failures at our Nevada plant amounted to $10 million.”

Trex reported increased net sales for the first quarter compared with this time a year ago. For the first quarter of 2019, Trex had $179.5 million in net sales – up from $171.2 million for the first quarter in 2018.

The company reported a dip in gross profits with $69.3 million in the first quarter of 2019, compared with $76.7 million from the same period in 2018. Fairbanks says the drop had to do with the startup costs related to the rollout of its new Enhance products and that those expenses are expected to taper off.

New traffic pattern

The 2019 General Assembly session was marked by political scandal and election-year gamesmanship, so it came as something of a surprise when the legislature did what previous generations of lawmakers have failed to do: establish dedicated funding for improving Interstate 81.

New legislation for the first time creates dedicated revenue streams and a fund for I-81, along with a committee for prioritizing work along Virginia’s 325-mile portion of the interstate.

Localities along the I-81 corridor will see the price at the gas pump go up when a 2.1% regional fuels tax goes into effect July 1. The revenue generated by the tax, expected to be around $150 million annually, will go toward $2.2 billion worth of improvements recommended for I-81 by the Commonwealth Transportation Board.

‘A historic vote’
It speaks to the urgency of I-81’s problems that enough Republicans and Democrats in the House and Senate backed a plan to raise taxes. An editorial by The Roanoke Times called passage of the legislation a “historic vote.”

“I’ve never actually been a part of such a collaborative bipartisan effort,” says Secretary of Transportation Shannon Valentine. “We were putting a plan together that would address the safety needs along the corridor, the economic needs, the reliability needs that quite frankly have been kicked down the road for decades.”

Widespread congestion and safety issues on I-81 have been well known for years. The challenge in addressing the problem has been figuring out how to foot the bill for improvements.

So, just how bad is the stretch of I-81 that runs from  Winchester to Bristol in western Virginia? Jeff Perkins, president of Boxley Materials Co. in Roanoke, won’t let his college-age children drive home for Thanksgiving on I-81, which first began to be built in 1957. Between 2013 and 2017, more than 11,000 crashes occurred in the I-81 corridor. (In the same period, I-64 saw more than 21,000 crashes and I-95 saw more than 25,000 crashes). The unpredictability of traffic congestion caused by accidents translates into delays for commuters and shipments.

“It costs us money to not be able to move product efficiently,” says Perkins. “If you expect to get so much product out per day and your trucks are stuck in traffic, you just can’t get it all delivered in the day that you expect.”

Winding road ahead
Just before the start of this year’s General Assembly session, Gov. Ralph Northam, a Democrat, stood with four Republican lawmakers from districts along the I-81 corridor to push for a plan that would have added tolls to the interstate to fund improvements.

The lawmakers who backed the tolling legislation were state Sens. Mark D. Obenshain (R-Harrisonburg) and Charles W. Carrico Sr. (R-Grayson) and Delegates R. Steven Landes (R-Augusta) and Terry L. Austin (R-Botetourt).

“I knew that we were never going to make any significant improvements to not only I-81 but the transportation system in this region if we didn’t come up with a funding stream,” said Austin in an April interview. “If we didn’t do it, who knows what the consequences would be.”

The Virginia Trucking Association issued a statement in January opposing tolls on I-81 on the grounds they would raise the costs of moving goods and would divert trucks onto secondary roads. The group supported a diesel fuel tax and a regional fuel tax identified in the I-81 Corridor Improvement Plan produced last year. The plan also studied toll financing for I-81 improvements.

“Tolling is just extremely inefficient,” says Dale Bennett, the trucking association’s president. “Nobody likes paying higher taxes and fees, but our industry is also realistic that highways are important to our business and the customers we serve.”

Previous proposal
It wasn’t the first time tolls have been floated as a solution for I-81.

In 2003, two private-sector groups gave to the Virginia Department of Transportation detailed proposals for widening I-81. Both plans depended on tolls, and they ultimately died.

As the session got underway this year, debate over the best way to finance I-81 improvements ramped up and appeared to be heading toward yet another impasse.

Northern Virginia officials balked at the idea that, under the legislation backed by Northam, I-81 commuters would be able to pay $30 for an annual pass for unlimited use of the interstate. Northern Virginia commuters, lawmakers noted, face tolls daily. The legislation passed in the House and Senate only after the tolling portion had been removed, leaving only provisions to create a fund and to establish directives for a new committee. A number of other I-81-related bills fizzled out.

By the end of session, Northam’s political capital appeared depleted by the discovery of a picture on his medical school yearbook page showing one man in blackface and another in a Ku Klux Klan outfit. The governor initially apologized for the photo and then changed his story, saying he wasn’t either man in the picture. Northam, however, admitted he had once appeared in blackface in a dance contest in 1984.

Nevertheless, faced with legislation that essentially called for more discussion on what to do about I-81, Northam proposed amending the bills passed by the legislature to add the financing options that would raise taxes.

“It was a challenge because I’m as conservative as my colleagues are,” says Austin, a Republican delegate representing a district in the I-81 corridor. “At the same time, I’m pragmatic and realistic in regard to the fact that, when you have a problem, you’ve got to fix it, and it’s not going to fix itself.”

Valentine, the transportation secretary, says her team met with the Virginia Trucking Association early on to try to address its concerns. Both sides looked at how Virginia’s registration fees and taxes compared with the rates of other states along the I-81 corridor.

“We said to them, ‘We just want to either get to the average on the corridor or be below,’” Valentine says, adding part of the goal was to have Virginia businesses remain competitive. “That was how we actually began negotiating what would an increase in revenue look like.”

In addition to the regional fuels tax, the final legislation establishes new funding streams for other interstates in Virginia. Later this year, an increase in state truck registration fees will go into effect. An increased road tax will be phased in beginning in July and fully implemented in 2020. An increase to the diesel tax will be implemented in 2021. The revenue from these sources will be distributed statewide based on truck miles traveled, with portions reserved for the Northern Virginia Transportation Authority and the Commonwealth Transportation Board for other interstate corridor improvements.

The new taxes and fees are expected eventually to drum up each year around $40 million for I-95, nearly $28 million for I-64 and about $20 million that will go to the Northern Virginia Transportation Authority. Another $43 million will be set aside for other improvements in interstate highway corridors. The state projects that, for fiscal 2020, the revenue package will bring in $155.8 million and gradually increase within two years to bringing in around $282 million each fiscal year.

Revenue from all users
Bennett, the trucking association leader, says a sticking point for him was finding a proposal that relied on revenues generated by all users of I-81 — not just truckers.

“One of the things we expressed concern about is that any funding proposal needed to have all users contributing to the funding to the new funding source, and the regional fuel tax does that,” Bennett says.

A key factor in the I-81 debate was the groundwork laid by the I-81 Corridor Improvement Plan adopted by the Commonwealth Transportation Board in December. The plan, prepared by the consulting firm Kimley-Horn and Associates, identified the targeted projects set to be done along the corridor. To develop the plan, 12 public meetings and hearings were held. They attracted 950 people and more than 2,000 public comments.

“There was a true case built and an awareness of the issues brought to the forefront,” says Valentine. “There was no way that people could not see how important this corridor was and how critical the needs were.”

Del. Chris L. Hurst, a freshman Democrat from Blacksburg, says there was a feeling that now was the time for Western Virginia lawmakers to seize the moment. 

“As demographics continue to change in Virginia, many of us who live in this rural part of the Commonwealth really felt like, if we didn’t do the responsible thing that our constituents voted us into office to do, it might become precipitously more difficult to get dedicated funding for Interstate 81 in the future,” says Hurst.

In the end, a funding package that raised regional and state taxes succeeded where previous proposals for tolls had failed. Given that they had tried and failed before, why bother proposing tolls at all?

Marianne Radcliff, a contract lobbyist who represented a group of business leaders in the corridor that formed to support new revenue for I-81, thinks the case for tolls had to fail again to clear the way for a conversation about taxes.

“Bills reliant on taxes to provide the needed revenue were seen as less likely to make it through the committee process, particularly in an election year,” says Radcliff, president of Richmond-based Kemper Consulting. “As a result of the robust discussion surrounding the proposed legislation, tolls, taxes and various combinations of the two were discussed widely. It is fair to say that, in order to end up where we did, with a proposal fully reliant on taxes, the process was necessary to thoroughly vet the effects of all of the alternatives.”

‘This will not fix I-81’
Even as legislators and policy makers celebrate I-81’s new funding stream, questions about the future of the road and the state’s transportation policy remain. 

The I-81 package is just a start and won’t solve all of the interstate’s problems anytime soon. Finishing the $2.2 billion worth of I-81 projects targeted by the new funding could take up to 10 years.  Meanwhile, the Commonwealth Transportation Board has identified additional I-81 projects costing another $2.1 billion that still need to be addressed.

“This will not fix I-81,” says Austin. “This will tremendously improve I-81 and help us reach ultimately — many, many years from now — a fix because it puts in place a dedicated funding stream. But to call it a fix is probably the wrong definition.”

Then there is the problem with the viability of fuel taxes as electric vehicles continue to rise in popularity. Toyota introduced the first mass-produced hybrid car, the Prius, in 1997, and sales for hybrids and electric cars have grown since then. By 2025, hybrids and electric vehicles will account for an estimated 30 percent of all vehicle sales, according to a J.P. Morgan report issued in October.

Stephen C. Brich, commissioner of the Virginia Department of Transportation, says there is concern about the reliance on motor fuels tax as a long-term sustainable funding mechanism. Hampton Roads and Northern Virginia have regional fuel taxes (raising the question of whether other parts of the state will need their own regional fuel taxes so their roads don’t get left behind). Brich says Virginia will need to identify other revenue sources to be able to address the state’s transportation needs.

“We are starting to feel those effects right now just by the entrance of the hybrids and electric vehicles,” says Brich. “The dilemma that we have is only going to be worsened.”

NoVA tower near Amazon HQ2 gets new owner

An office tower in Arlington County sitting near Amazon’s HQ2 has a new owner.

Presidential Tower office building at 2511 Jefferson Davis Highway sold on Thursday for $123.2 million to PT Office Owner LLC, according to Arlington County’s Department of Real Estate Assessments. The 349,303-square-foot building was most recently assessed by the county for $70.45 million.

PT Office Owner lists a Connecticut address for its principal office. It’s the same address as the headquarters for Starwood Capital. Beacon Capital Partners was the seller in the deal, according to Newmark Knight Frank.

Presidential Tower is two blocks away from the Amazon HQ2 site announced last year in the recently dubbed National Landing neighborhood. The office building is 95% leased and has been renovated in recent years. Upgrades have been made to the main lobby, common areas and restrooms.

Newmark Knight Frank’s executive managing directors Jud Ryan and James Cassidy and co-head of U.S. capital markets Robert Griffin worked on the sale.

A Newmark Knight Frank team that arranged financing included vice chairmen and co-heads of capital markets debt & structured finance Dustin Stolly and Jordan Roeschlaub along with vice chairmen Joe Donato and Maury Zanoff.