Amid a difficult office landscape, an 11-building portfolio in suburban Richmond, Virginia, traded at the end of 2022 in one of the largest office sales in the market last year. The consequential deal earned a 2023 CoStar Impact Award for sale/acquisition of the year in Richmond, as judged by a panel of local industry professionals.
Richmond-based real estate firm Lingerfelt sold the portfolio to Seminole Trail Properties for $118.95 million in a December deal brokered by Craige Pelouze of Commonwealth Commercial Partners. The largest suburban office transaction last year, the portfolio totals roughly 726,000 square feet near the Interstate 64/I-295 interchange in three of Richmond's premier markets: Innsbrook, Glenside/Broad and Short Pump.
Office sales have been tenuous as extended remote work policies have dampened demand for office space. That has been coupled with rising interest rates and general economic concerns that have pushed investors into better-performing sectors, such as multifamily and industrial.
Helping to propel the portfolio deal forward though is the rezoning process Lingerfelt began in 2020 to secure a mixed-use designation for five of the 11 properties. In November 2021, the company was approved to build 1,375 multifamily units on existing parking areas around the five buildings. Charlottesville, Virginia-based Seminole Trail intends to move forward with the multifamily development.
“While Lingerfelt is strategically divesting parts of its current real estate portfolio, it is very active in the industrial and multifamily sectors,” the company said in a statement at the time.
About the project: The low- and mid-rise properties were primarily built in the 1980s and 1990s and range from 44,089 square feet to 81,208 square feet. The park is about 82% leased to a tenant roster that includes Northwestern Mutual Life Insurance Co., Scott Insurance, Advantasure and Patient First, according to CoStar data.
What the judges said: The deal was likely an extremely complex transaction during a difficult economic time to sell office real estate, the judges said.
They made it happen: Craige Pelouze of Commonwealth Commercial Partners brokered the deal.
