Forest City Enterprises Inc. has added to its portfolio of commercial real estate holdings in the Richmond region with the acquisition of 11 office buildings in Henrico County. The buildings have a total of about 600,000 square feet.
Forest City did not release the amount paid for the office portfolio, the seller or the specific locations. A release from the Cleveland-based company said the properties are 95 percent leased to a mix of high-quality local and regional tenants.
Jamie Thomas, senior director of GVA Advantis in Richmond, who did not particpate in the deal, told CPN that the buildings are located in the Glen Forest and Commerce Plaza developments that had been owned by Forest City’s longtime partner in the region, Pruitt Associates. Thomas said he did not know the sale price.
“They are well positioned and well maintained,” Thomas said of the properties along I-64 that he described a Class A-minus or B-plus. “They have high occupancy and great location. Forest City picked up some very nice properties.”
It’s the second announcement Forest City has made this week about a high-profile Richmond project. On July 30, CPN reported that the company, in partnership with Pruitt Associates, had broken ground on the Shops at White Oak Village, a 900,000-square-foot retail property in eastern Henrico County. The $161 million mixed-use project on 136 acres in the I-64 corridor will also feature a 140-room Hyatt Place Hotel. Retailers committed to the project, which will include a power center and lifestyle center, include Circuit City, Lowe’s, JC Penney, Sam’s Club, PetSmart and Target.
Charles Ratner, president & CEO of Forest City Enterprises, noted in a press release that the company was employing its “city strategy” in the region. “Forest City is able to enter core urban markets with strong demographics by introducing one property type and then penetrating the market with additional real estate projects,” he said.
Calling the Richmond area “a growth market for us,” Ratner cited the company’s 472-unit apartment complex called River Lofts at Tobacco Row and 1.2-million square-foot Short Pump Town Center retail center as well as the Shops at White Oak Village as the other pieces to the strategy.
While sales of office properties in the Richmond area are down in the past year, “price points continue to ascend as investors are willing to place a premium on good assets,” according to a second quarter Office Market Report by the GVA Advantis Richmond group.
An example this week is the sale of The Boulders Office Park, a Class A property, that Brandywine Realty Trust acquired from SugarOak Properties in an all-cash deal worth $96 million, according to a July 31 CPN report. GVA Advantis noted the deal for the 508,000-square-foot property with five buildings works out to about $189 per square foot. Two sales cited in the GVA Advantis 2Q report were The Overlook I and II Buildings that sold for $17 million, or $133 per square foot, and the ChemTreat Building, which sold for $4.1 million, or $163 per square foot.
About Forest City:
Forest City Enterprises, Inc., a $9.2 billion publicly traded real estate company, is principally engaged in the ownership, development, acquisition and management of premier commercial and residential real estate throughout the United States. An NYSE-listed real estate company (NYSE: FCEA and FCEB), based in Cleveland, Ohio, its portfolio includes interests in retail centers, apartment communities, office buildings and hotels throughout the United States.
By Gail Kalinoski, Commercial Property News
