vdogg

Block 2 Tower

15 posts in this topic

Surprisingly this project is still alive, it's status was last updated July 5th. Even more surprising is there appears to have been some movement on it. Floors 6-11 are spoken for according to this. I think they have to be 75% leased before they can begin construction, so we still have a ways to go, but one ADP sized tenant should push us over the top.

http://www.loopnet.com/Listing/15888409/4565-Virginia-Beach-Boulevard-Virginia-Beach-VA/

Here's a link to the archived thread for reference.

 

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Cool. With 4525 Main still not stabilized, I had given up hope on Block 2 for a while. Figured they'd want to get the former leased out first. But you're right. One big tenant for Block 2, and 4525 will be forgotten.

On another note, given the current office climate (especially at $33/ft), I do think it would be unrealistic to expect that any floors will be added beyond 22. I thought I'd just throw that out there given that everyone around here (myself included) would love nothing more than to see something beyond 30!! Drat! LOL.

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I'd be very happy with anything over 20 at this point, we need another highrise at Town Center. I did notice the price, it really jumped out to me because I don't think it was that high the last time I checked this listing over a year ago. That price is high even for downtown Norfolk, so I don't know how they think they can justify it out here in Virginia Beach. They could stand to come down a bit, they seem to have priced themselves out of the market.

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Posted (edited)

Right, I agree. And that's the reason they give to their investors during those quarterly conference  calls as to why 4525 is not yet stabilized. I believe they were asking somewhere around $31 there (now $29.50) , as well, which was apparently the highest ask in all of Hampton Roads for Class A! 

Edited by baobabs727

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https://www.google.com/amp/s/seekingalpha.com/amp/article/4067884-armada-hoffler-properties-ahh-ceo-louis-haddad-q1-2017-results-earnings-call-transcript

4525 seems to be doing fine. This is the first quarter report though maybe there is something in the second report. An approximate 7% vacancy is not bad when looking at building another tower.

"In addition to this robust development activity, we are very pleased with the performance of our existing portfolio. Although there will be very little impact on the current year, the new 40,000 square foot tenant at 4525 Main, combined with the existing Town Center tenants who relocated, upgraded, and expanded into this building, will bring occupancy to over 93%. We have achieved our goal of holding rents at this the Premier address in the region.

Nearly as significant these relocations created vacancy and lower price point space elsewhere in Town Center that appeals to a wider variety of perspective tenants. To this end, four new tenants are poised to sign leases that start to backfill second generation space.

We are well on our way to bringing office occupancy at Town Center back to its historic level in the mid-to-high 90. "

Looks like Q2 won't be available till August 1st but they seem to be on track towards fully leasing that building this year. Still think they need to come down from 33 though.

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Posted (edited)

Saying that the tower is "one ADP sized tenant should push us over the top" is kind of disingenuous though. ADP's location to Norfolk was major news and one of the biggest economic development stories in Hampton Roads in a couple decades. I'm sure at some point, something will go on block 2. Probably something pretty large. But if I had to put the odds of anything serious happening on the scale being discussed in the next five years, I'd say the odds are about 25-1... and that's probably optimistic.

Edited by HRVT

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Nothing disengenuous about it at all. These things tend to create their own synergy. Think of the explosion of retail in TC after YEARS in the doldrums. All it takes is one major nationally recognized tenant to cause others to give us a second look. The location of the marea cable is another example. Now you have Facebook and Microsoft and others knocking at our door for Data Center locations. You're right, ADP is a major coup that has raised the profile of the ENTIRE region. Saying something similar can happen in VB doesn't take anything away from Norfolk. We should want all cities in this region to succeed.

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1 hour ago, HRVT said:

Saying that the tower is "one ADP sized tenant should push us over the top" is kind of disingenuous though. ADP's location to Norfolk was major news and one of the biggest economic development stories in Hampton Roads in a couple decades. I'm sure at some point, something will go on block 2. Probably something pretty large. But if I had to put the odds of anything serious happening on the scale being discussed in the next five years, I'd say the odds are about 25-1... and that's probably optimistic.

Something has been lost in translation.  I think you may have misunderstood. What VDOGG was saying was that IF they were to land a tenant the size of an ADP @290k sq. ft., they would more than reach critical mass to begin construction given that floors 6-11 are apparently already spoken for per the Loopnet listing.  Actually, by my calculations and given that pre-leased figure, they wouldn't even have enough room for an ADP per current plan!

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Thanks baobabs. ADP needed 287,000 sq feet and this building is north of 350. One ADP or a couple of sub ADP's should do it. It does not HAVE to be a fortune 500. ADP was just a convenient example. That said, I stand by my prior post above. Another ADP moving to this area is certainly not out of the question.

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Posted (edited)

Oh yes, I totally agree with you. I think there are probably more close calls re: relocations/expansions every 5 to 10 years than we think.

ADP was strongly committed to either Chesapeake or Norfolk. And that was after an exhaustive nationwide search. They said our region won hands-down. They were looking for high education levels, multiple universities, loads of skilled workers including military veterans and their spouses plus millennials (very important), a reasonable cost-of-living, reasonable avg. wages, a good climate and good quality of life, cultural and entertainment attractions, low taxes, favorable local and state business climates, etc.  

Both Virginia Beach and Norfolk  are always on the hunt for a whale. Virginia Beach especially so now that they're investing so much $$ in that bio medical/biotech campus and with the advent of the landing of those multiple international data cables.

It will happen. Nobody knows when, but it wouldn't surprise me if something big came about within the next 10 years . 

Edited by baobabs727
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I'm not sure where to ask this but since this lot is the closest, if this is developed what happens to the Taco Bell? Is it on the same lot? Separate lot? What would it take for them to sell the property? What could possibly go there? It seems pretty small for a large structure and with it being right at the intersection, it would probably be a "statement" building right? 

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7 hours ago, baobabs727 said:

Something has been lost in translation.  I think you may have misunderstood. What VDOGG was saying was that IF they were to land a tenant the size of an ADP @290k sq. ft., they would more than reach critical mass to begin construction given that floors 6-11 are apparently already spoken for per the Loopnet listing.  Actually, by my calculations and given that pre-leased figure, they wouldn't even have enough room for an ADP per current plan!

Yeah, I'm aware that it won't take anything quite at the level of ADP (that was a once a decade type of economic announcement). But this tower is still a very long way from being close to going up. It has a few floors spoken for, but doesn't even appear to be 1/4 the way leased. A development even half the size of ADP would probably be enough and is more realistic. But how often do even those opportunities come around? I hope I'm wrong, but there's a reason that this project has been in neutral for the last ten years. The demand for office space just isn't as prevalent as it was 10-15 years ago, which just goes to exacerbate the challenge of luring a big company in (or even a large chunk of the operations of a medium-sized one). 

That said, VDOGG certainly hit the nail on the head when it comes to rooting for ALL cities in the area to succeed. Despite what local mayors/city councils seem to think, a rising tide would lift all boats (well, a figurative tide... a literal one could be disastrous). Instead, local councils seem more concerned with torpedoing the efforts of the competing cities nearby rather than cooperating.

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2 hours ago, Virginia City said:

I'm not sure where to ask this but since this lot is the closest, if this is developed what happens to the Taco Bell? Is it on the same lot? Separate lot? What would it take for them to sell the property? What could possibly go there? It seems pretty small for a large structure and with it being right at the intersection, it would probably be a "statement" building right? 

Taco Bell is completely separate.  It's operating under a land lease which I believe may have as many as 15 years left on it? Here's an article on it from back in the day.

https://www.google.com/amp/pilotonline.com/business/taco-bell-is-last-holdout-at-virginia-beach-town-center/article_ea02ee6a-e984-56db-83b0-2594ce663fcd.amp.html

 

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I perused yesterday on Davaris' website for listing (not loopnet) and of all the Town Center space listings, block 2 tower was not listed.  Why?  

But (a little tid bit), on the main Town Center listing (not of individual buildings) the focus was on block 9 with rendered angles I had not yet seen before and a map in PDF of TC showed the grass in front of Sandler center as "Sander Center Expansion".  

    Just some things I noticed.

Edited by metalman

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Don't know. I think that site has tended to focus on the current phase they're leasing for. So long as they keep updating the loopnet listing, block 2 is still in play.

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