Despite an uncertain economic environment, Cushman & Wakefield | Thalhimer’s Research Group reports that overall office building sales in the Richmond metropolitan area in 2011 have been robust. Since Jan. 1, the region saw sales of 24 office buildings in 10 sale transactions, representing an aggregate volume of more than $217 million in sales and 2.5 million square feet of product. (Only building sales of more than $2.5 million were included in the analysis).
In contrast, four office buildings, in three transactions, were sold in 2010 with an aggregate volume of $30.3 million and about 640,000 total square feet. The brisker pace of transactions represents a 616 percent increase in office building sales volume. The 2011 figures represent the sale of both occupied properties acquired as investments and vacant buildings acquired for occupancy or redevelopment. The three transactions in 2010 were either vacant or acquired for redevelopment into an alternative use.
“A resurgent capital markets environment, steadily improving local office fundamentals and increased competition for core properties in primary markets has made investing in office markets like Richmond particularly attractive,” Eric Robison, vice president in Cushman & Wakefield | Thalhimer’s Investment Brokerage Group, said in a statement. Speculative investors and users looking for affordable office space have been active in acquiring vacant properties in the region. “Well-heeled investors that have been willing to take on the expense of renovation and lease up risks have been able to acquire well-located assets from lenders for a fraction of the cost of reproduction — and thus are able to pass on these savings to attract future tenants,” said Mark E. Douglas, senior vice president in the Office Brokerage Group.
Thalhimer expects that Richmond will continue to be a location of interest to regional investors given the health of the job market relative to the national unemployment picture. As of September 2011, the national unemployment rate was 9.1 percent, compared with 6.5 percent for Virginia and 7.3 percent in the Richmond Metropolitan Statistical Area (MSA).
|Date of Sale||Property Name||Owner/Investor||Property Price|
|March 2011||10 N. Nansemond Street||Adaptive re-use||$5,000,000|
|March 2011||Overlook I & II||Occupied, investor purchase||$12,600,000|
|April 2011||3831 Westerre Parkway||Owner||$4,352,908|
|April 2011||Riverside on the James||Occupied, investor purchase||$63,750,000|
|May 2011||Liberty Property Trust Portfolio||Occupied, investor purchase||$97,000,000|
|June 2011||Jackson Center||Owner||$2,500,000|
|August 2011||Glen Forest Building||Occupied, investor purchase||$9,300,000|
|September 2011||Richmond Plaza||Owner||$5,500,000|
|October 2011||Deep Run III||Vacant, investor purchase||$12,402,570|
|October 2011||3600 Centre||Adaptive re-use||$4,800,000|
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