DRV to buy Deep Run III
- September 13, 2011
The second empty building that made up the former Circuit City headquarters in Henrico County has a buyer. DRV LLC, a Richmond-based private real estate investment firm, has submitted a contract to buy Deep Run III, a 383,000-square-foot office at 9954 Maryland Drive. The six-story building has been vacant since Circuit City Stores Inc. went bankrupt in 2008.
Another local investment group, DRCC Properties LLC, recently purchased Deep Run I along with 59 acres for just under $6 million. That group was headed by Michael G. Pruitt, a principal with Pruitt & Associates, a local development firm. Deep Run I will soon be the new headquarters for travel insurance firm Mondial Assistance USA, which has leased four of the building’s five floors.
Spilman Short, one of the principals at DRV, said his company is making the purchase as part of a joint venture with a local institutional equity firm. He would not disclose the firm’s name or the purchase price. “I’m under a confidentiality agreement. Our price is extremely good in comparison to the replacement cost or market pricing. We’ll be in a position to pass that value on to any tenants considering that location,” he said.
The building, on 18 acres, is located in a prime location off West Broad Street, just off Interstate 64. Within a five-mile radius are more than 40 hotels and 150 restaurants. Short says he is getting interest from prospective tenants. “I feel that the Pruitt Family and Bill Goodwin, who are involved in the building next door, are a couple of the smartest group of people in Richmond. They bought it at the right price, sat on it for eight months, filled it up, and they did that because of the location. I think they are analogous of McDonald’s. We’re Burger King coming in right beside them.”
DRV, which also has an office in Bethesda, Md., owns several projects in the Southeast, Short said, ranging from retail to office flex and office buildings. The company made another purchase in Richmond recently when it bought the 76,000-square-foot Villa Park I office building in Henrico County for $4.3 million. In that deal, the building was bought out of foreclosure by DRV in a joint venture with Markel/Eagle, a local firm that put up the equity financing, and HC Yu and Associates, a consulting engineering firm that will occupy 15,000 square feet in the building.