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Richmonopoly

15(+) Story Office Building Planned for Downtown

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Eric, did you note that floors 12 to 19 are leased?  Also, 12K s/f on the ground level at corner of 8th and Canal Streets are leased.

 

Or, am I misreading it? :tough:

 

Click "Plan" on the website.

Burt, I did notice that.  These are the floors that I presume that MW will be taking.  The available floors below where MW will be are the ones they are trying to fill as a 21-story building.  If they can't find anyone to fill those floors, this will be a 15-story building.  The 12K s/f on the ground level is leased out to someone (don't know who) - perhaps some retail chain?  This is the way I see it, but I could be wrong.

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I will admit, this rendering of what I'm assuming is the tower at 21 stories makes me feel a little better about the scale of the building:

 

AreaMapSidebar.jpg

 

Let's hope that additional tenant space gets filled.

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I will admit, this rendering of what I'm assuming is the tower at 21 stories makes me feel a little better about the scale of the building:

 

AreaMapSidebar.jpg

 

Let's hope that additional tenant space gets filled.

 

Yes, I think you're right.  Looks to be about the same height as the building on either side of it.  Good "eye" TBurban!

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On the website, there is a .pdf that has the official announcement on it.  Contained within the announcement are the details of resolving the traffic flow issues the building will create.

 

Something else I like about the website is that they are "selling" this building as a 20-story (not a 15-story) structure (with an extra story for mechanical - making it 21 stories).  I sure hope they get what they need for, at least, a 21-story building, but wouldn't it be great if someone pops up needing 10+ more stories?  I also still think they should consider a hotel, apartments, or some other use as well to make the building taller - I hope someone steps up and makes such a proposal.  I can live with the flat roof, as long as the building is tall. The Sears tower is boxy and has a flat roof, but it is tall.  I'm not talking about THAT tall for Richmond, but 30 - 40 stories is very doable in the Richmond skyline.  I can dream can't I?

 

If they go beyond 21 stories, my understanding is the whole building has to be re-designed and that could be a big problem as it has to be done by August 2015. 

 

 

I can remember a while back that Dominion was looking to move downtown from their suburban, Glen Allen location.  Since they own the lot downtown, wouldn't it be neat if they could strike a deal to move into the tower as well?  If I'm not mistaken, I believe they were once thinking about building on that lot themselves if they could sell their Innsbrook office.  Only problem:  they haven't sold their Innsbrook office...but, could it be a possibility? Hmmmmm.....Just thinking out loud here.

 

If I recall, Dominion, at the city's urging, bought the big ugly building on the other side of the VEPCO tower.  I wouldn't be surprised if that's what made them more willing to part with this lot. 

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If they go beyond 21 stories, my understanding is the whole building has to be re-designed and that could be a big problem as it has to be done by August 2015. 

 

 

 

If I recall, Dominion, at the city's urging, bought the big ugly building on the other side of the VEPCO tower.  I wouldn't be surprised if that's what made them more willing to part with this lot. 

 

 

Ah, hence the 21-story limit.  That makes sense.  Yeah, it would take too long for them to design another tower with more floors.  Well, let's just hope they can fill this baby up!

 

So Dominion still has a property they can build on once they move out of Innsbrook.  That's actually good to hear.  Thanks JB!

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If they go beyond 21 stories, my understanding is the whole building has to be re-designed and that could be a big problem as it has to be done by August 2015. 

 

 

 

If I recall, Dominion, at the city's urging, bought the big ugly building on the other side of the VEPCO tower.  I wouldn't be surprised if that's what made them more willing to part with this lot. 

 

Do you mean the old Chesterfield Cigarettes building? It looked better before it got wrapped in siding:

http://dig.library.vcu.edu/cdm/singleitem/collection/postcard/id/627/rec/274

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I will admit, this rendering of what I'm assuming is the tower at 21 stories makes me feel a little better about the scale of the building:

 

AreaMapSidebar.jpg

 

Let's hope that additional tenant space gets filled.

Notice that the Williams Mullen Building on Canal between 9th and 10th is not shown in this rendering.

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A couple of things about this project just don't quite.....'add up' to me.

 

First of all, how are the developers making money on this? According to the richmondbizsense.com article the developer is asking ~$29/sqft/yr for the remaining space that hasn't been leased. We might assume MGW paid a little more per foot per year because they got the higher, prime floors, but the fact that they're the anchor tenant and occupying such a large space suggest they may have gotten a bit of a deal. Let's be generous and say that the avg gross rent is $30/ft/yr. For a 275,000 sq ft building that grosses $8.25 million/year. Now assume a 30% expense ratio and that's down to $5.775 mil/year [For the record, 30% expenses is really low for office property..it might be closer to 40% or higher]. This is not including taxes and assumes 100% occupancy from day one.

 

Obviously my math is really quick and dirty (don't have the time or energy at the moment) but I don't see how this could ever make any money if the $110-150 million cost is accurate.

 

The cost of construction at $110 million and 275k sq ft comes to about $400/square foot which seems pretty high, particularly for Richmond. For reference, a 2009 article on Crains NY put class A office space construction costs in NYC at $290/square foot (not incuding land costs, I believe).

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Hey guys -

Good conversation.

540_804 - my understanding is that the rental rates quoted are NNN and not full service. So, grossed up, it's more like $37-$38 on a full service basis which should make more sense.

On the cost per s.f., significant structured parking is required by the market in Richmond and adds considerably to the cost $15,000-$30,000 per space). The parking is factored into the project cost but not the project's leasable square footage.

Also need to factor parking revenues into the income (I'm guessing $125-$155 per space per month). There are 520 spaces.

With those tweaks the income should look better.

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If they go beyond 21 stories, my understanding is the whole building has to be re-designed and that could be a big problem as it has to be done by August 2015. 

 

 

 

If I recall, Dominion, at the city's urging, bought the big ugly building on the other side of the VEPCO tower.  I wouldn't be surprised if that's what made them more willing to part with this lot. 

Based on what the vacancy rates will do to asking rents in the existing inventory, I would be surprised if this bldg gets much bigger but you never know. ( hope it does ).

Dominion picked up 750 parking space buying Richmond Plaza for virtually nothing. Should have no problem parting with this parking lot. RP occupies a full city block and could present a fantastic redevelopment opportunity at some point.

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Safe to say this deal probably couldn't have gotten done without Dominion getting the 750 spots from RP to offset what it's losing from the new building.

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Good conversation...

 

What about the 2015 World Road Cycling Championships?  Will there be sufficient hotel space downtown?  If not, that could be a good marketing strategy to get this tower taller.  There has to be hotel chain that is expanding and would be interested in the space.  As much as I would love for the tower to be filled by only local tenants, I don't see that happening.  This would be a premier spot that would not only benefit the hotel from a branding perspective, but also the city in general with a signature tower to be proud of.   Residential would work too.  I think if there was enough buzz about it, we could get the developer to reconsider the height.

Edited by evanf

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This isn't what we wanted when we met for the 2007 Downtown Master Plan.  I still want a decent building with a dome or some kind of angle than right downtown. Never dream I guess.

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Hey guys -

Good conversation.

540_804 - my understanding is that the rental rates quoted are NNN and not full service. So, grossed up, it's more like $37-$38 on a full service basis which should make more sense.

On the cost per s.f., significant structured parking is required by the market in Richmond and adds considerably to the cost $15,000-$30,000 per space). The parking is factored into the project cost but not the project's leasable square footage.

Also need to factor parking revenues into the income (I'm guessing $125-$155 per space per month). There are 520 spaces.

With those tweaks the income should look better.

 

Ah, that makes a lot more sense.

 

I remember hearing a developer toss out a figure in the $37-40/ft/yr range as being necessary to make new Class A feasible in the Richmond area.

 

In an almost completely unrelated note, I wonder if we'll ever see Three James Center expanded as it was designed to handle an additional 6 floors.

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I like the whole building idea -- especially at 20-30 stories -- but I must say, having worked downtown for a few years, that I'm concerned about what it's going to do to the afternoon traffic pattern heading south on Eighth Street toward the Manchester Bridge. I wonder why no one has thought of the possibility of doing what they've done in Pittsburgh and other cities -- keep the road where it is and let it pass under part of the building! It would definitely make for a very interesting design of the likes that we don't have, make for a very interesting "gateway" into the city, and be a design element that would be striking from the street level!

 

Here's what I'm talking about:

 

http://maps.google.com/maps?q=pittsburgh,+pa&hl=en&ll=40.445736,-79.998327&spn=0.001571,0.001633&sll=37.537231,-77.439333&sspn=0.00518,0.008256&t=k&hnear=Pittsburgh,+Allegheny,+Pennsylvania&deg=90&z=20&layer=c&cbll=40.445732,-79.998407&panoid=wuPV9fQ_wnUdslSiK5LESg&cbp=12,69.04,,0,-0.12

Edited by Mball

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I like the whole building idea -- especially at 20-30 stories -- but I must say, having worked downtown for a few years, that I'm concerned about what it's going to do to the afternoon traffic pattern heading south on Eighth Street toward the Manchester Bridge. I wonder why no one has thought of the possibility of doing what they've done in Pittsburgh and other cities -- keep the road where it is and let it pass under part of the building! It would definitely make for a very interesting design of the likes that we don't have, make for a very interesting "gateway" into the city, and be a design element that would be striking from the street level!

 

 

That wouldn't be a bad idea, however the developer (I'll be honest) I don't think the developer really cares much for design or anything, they are just satisfying the tenants' needs, and that's about it. Architecturally complex things like roadways through buildings would definitely be a striking "gateway" however it will also probably kick up the costs (maybe? dunno) and the entire tower probably will end up going through a re design process if they actually did consider this. However, 9th street becoming two way will help i think, therefore I don't think there really needs to be a road through the tower. I mean, definitely I would not mind seeing this happen, it definitely would be neat and unusual (in a good way) visually to drivers coming off the Manchester Bridge. And besides, our own Master Plan even points to a "signature tower" on that lot. I really don't know why..... but we've already been through that.

 

On the off topic of roads through buildings, Franklin Street will be restored and going under the Main Street Station train shed as part of that whole makeover/construction project.... unrelated but it does involve roads through buildings (sorta) .... :P

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Good conversation...

 

What about the 2015 World Road Cycling Championships?  Will there be sufficient hotel space downtown?  If not, that could be a good marketing strategy to get this tower taller.  There has to be hotel chain that is expanding and would be interested in the space.  As much as I would love for the tower to be filled by only local tenants, I don't see that happening.  This would be a premier spot that would not only benefit the hotel from a branding perspective, but also the city in general with a signature tower to be proud of.   Residential would work too.  I think if there was enough buzz about it, we could get the developer to reconsider the height.

 

 

I've never heard of an office building with a hotel in the bottom of it.  Keep in mind that the only reason this is being built (as opposed to remaining a patch of ugly, ugly surface parking) is because MW sought out a developer to see if someone was interested in building a building that MW could lease.  We can't let the perfect be the enemy of the good.  I'm always embarrassed by that lot when I have folks in from out of town. 

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I've never heard of an office building with a hotel in the bottom of it.  Keep in mind that the only reason this is being built (as opposed to remaining a patch of ugly, ugly surface parking) is because MW sought out a developer to see if someone was interested in building a building that MW could lease.  We can't let the perfect be the enemy of the good.  I'm always embarrassed by that lot when I have folks in from out of town. 

 

Yea, I guess hotel and residential would be more common.  Although mixed-use is becoming more popular and some buildings (take the Burj Khalifa for a wild example) have all three.  I'm glad something is going there, just wish it was taller... especially since that's what was discussed in the master plan.

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I've never heard of an office building with a hotel in the bottom of it.  Keep in mind that the only reason this is being built (as opposed to remaining a patch of ugly, ugly surface parking) is because MW sought out a developer to see if someone was interested in building a building that MW could lease.  We can't let the perfect be the enemy of the good.  I'm always embarrassed by that lot when I have folks in from out of town. 

Neither have I; but I have heard of office buildings with hotels on "top" of them. It seems, according to info in today's Times-Dispatch, that no proposal on this project has reached city council. Further, the report states that a council member wants a striking building on that site. The current lot is an embarassment. I just don't understand the logic to replace it with another one.

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They should go back to the drawing board. With the irregular shape of the block, it could offer a more interesting building and possibly force them to build up. I also think the cobblestone way should be kept or preserved in some way as it is the boundary of the Great Turning Basin and the last one left.

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They should go back to the drawing board. With the irregular shape of the block, it could offer a more interesting building and possibly force them to build up. I also think the cobblestone way should be kept or preserved in some way as it is the boundary of the Great Turning Basin and the last one left.

 

If they "go back to the drawing board", MW is likely out as a tenant as it has to be in a new office by mid-2015.  If this could be built on spec without an anchor tenant, it would have been built years ago.  I totally share your disappointment about the nature of the building, Cadeho, but I'm inclined to believe that the alternative is another 15 years with an empty surface parking lot.  How many years ago was it that Millennium Tower tried to do exactly what you're suggesting and where did that leave us (except for some brand new empty lots that formerly housed semi-historic structures).

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