Best Real Estate Transaction: Sale
- June 28, 2012
Lingerfelt Development , Richmond
Liberty Property Trust , a public real estate investment trust based in Malvern, Pa.
It’s not every day that a Richmond-based developer does a $100 million deal for 14 suburban office buildings. In what was the largest real estate transaction in the Richmond region in years, Lingerfelt Development paid about $105 per square foot for a 919,000-square-foot portfolio that Liberty Property Trust shed last year, as it moved to dispose of legacy assets in several markets, including Richmond. At one point, the portfolio was under contract to another buyer. When that deal fell through, Lingerfelt jumped in to recapture buildings it had developed in the first place.
With a market price of $98 million, plus additional costs, J. Ryan Lingerfelt says his company paid a good price for what were all Class A buildings with the exception of three flex properties. There was sentimental value as well, since Ryan’s father, Alan T. Lingerfelt, developed many of the buildings and sold them to Liberty in 1995. Now they’re back in the Lingerfelt fold, with most of the properties 96 percent leased.
The deal made Lingerfelt one of the largest owners of Class A commercial real estate in Henrico County’s Innsbrook Corporate Center and surrounding area. “What we’re seeing is that rents are improving, and the market is improving faster than we thought,” says Ryan Lingerfelt.
In fact, growth at such companies as Capital One Financial Corp. is helping to fill what little space remained in the buildings. During the second quarter of last year, Brian F. Witthoefft, another principal with Lingerfelt, says Capital One signed a lease for 135,000 square feet at Liberty Plaza II, an office building at the intersection of Cox and Nuckols Roads in Innsbrook. The space had been vacant for 10 months, with Capital One moving out to its corporate campus at the nearby West Creek Office Park. However, as the company continued to expand operations in the Richmond market, it decided to move back into its old space, which was still available.
Lingerfelt has continued to expand its Richmond portfolio. In April, the company bought three commercial office buildings totaling nearly 300,000 square feet in the Boulders Office Park in Chesterfield County.
What made It stand out
The size of the portfolio and the willingness by a local, real estate development company to reinvest in the Richmond region. “It shows signs of confidence in the local economy. That’s a positive sign for the local market,” says Witthoefft. “Activity breeds activity.”