USAA to Leave Norfolk, Move 500 Employees to Chesapeake

By Adrian Maties, Associate Editor

USAA plans to relocate more than 500 employees from its current office in Norfolk to Chesapeake by December. The San Antonio-based financial services company will move from its mid-Atlantic regional office at 5800 Northampton Blvd. to Battlefield Technology Center II in Chesapeake, according to Inside Business. USAA employees will provide claims support for 9.6 million clients at the company’s new location.

Located at 520 Independence Parkway in Chesapeake, USAA’s future home is an 81,478-square-foot building that was completed in 1998. The company’s new space will be about 10 percent larger than the 73,000 square feet it now occupies at The Concourse at Northampton, a 319,444-square-foot, four-story building lowned by USAA Real Estate Co., a USAA affiliate. Battlefield Technology Center II is less than 10 miles from Downtown Norfolk and 14 miles from Norfolk International Airport.

Another Concourse at Northampton tenant, Amerigroup Corp, is in expansion mode. The healthcare insurance company signed a long-term lease at the building last year and by spring 2015, it plans to more than triple its workforce there from 500 to 1,600.

According to CBRE Group Inc., the office vacancy rate in the Hampton Roads area increased to 16.9% during the fourth quarter of 2012 as the market recorded 106,780 square feet of negative absorption.

The best-performing submarket at year’s end was Central Norfolk, thanks in large part to leasing activity at the USAA building, which accounted for much of the submarket’s 256,246 square feet of absorption.

Charts courtesy of CBRE Group Inc.

HDL Launches 95 KSF Phase 2 of HQ Expansion in Richmond

By Adrian Maties, Associate Editor

Health Diagnostic Laboratory, Inc.started construction this week on the second phase of its $100 million headquarters expansion in Richmond’s Virginia BioTechnology Research Park. Phase 1 of the project was completed in February.

Located at the corner of East Jackson and North Fifth streets and bordered to the southeast by Navy Hill Drive, the second phase will provide 95,000 square feet of office and wet laboratory space and will house 400  employees. To make way for thenew building, a two-story facility used by HDL to house its sales support, client services, and technology teams will be demolished. Completion is scheduled for April 2014.

The new building will be linked to the expansion’s 112,000-square-foot, six-story first phase. That facility, which houses 650 employees, is located at the corner of East Jackson and North Fifth streets on the former site of HDL’s now-demolished BioTech 3 building. Also on the campus is HDL’s 76,000-square-foot, three-story original headquarters, dubbed BioTech 8.

Fulton Bank, StellarOne and Xenith Bank will provide financing for the $25 million Phase II. All told, HDL’s new headquarters will be a 283,000-square-foot complex with a rooftop park and green space, a 24/7 gym for employees. Its atrium will contain spiral slides connecting the sixth, fifth, and fourth floors

“It is our mission to prevent and reverse heart disease and related diseases, and this real estate expansion is allowing us to do so as a team in a values-based, innovative environment in downtown Richmond,” Tonya Mallory, HDL, Inc.’s president & CEO, said.

Photo: HDL, Inc.

Patricio Enterprises Leases 427,000 SF; Virginia Beach Properties Hit the Market

By Adrian Maties, Associate Editor

In one of the year’s largest local industrial leases, Patricio Enterprises, a diversified business solutions firm and federal contractor based in Stafford, has leased 427,115 square feet at 2705 Commerce Road in Richmond from Alleghany Warehouse Co.  CBRE Inc.’s Richmond office brokered the transaction.

Located just north of Commerce Road and Bells Road, the facility offers 2.6 million square feet of industrial warehouse space. “Patricio approached us about a sizable warehouse requirement linked to a government contract. We were able to come to terms and structure a lease agreement in a very short period of time,” commented said Rob Dirom, a CBRE first vice president. Dirom and Joseph Marchetti III of represented Alleghany.

In other industrial news, General Foam Plastics has named Binswanger and John Lee & Associates, Inc. as the exclusive agents for the sale of two industrial properties in Virginia Beach.

The 200,000-square-foot, single-story buildings are situated on 32 acres in the Oceana Business Park at 1440 London Bridge Road. Completed in 1995, the buildings feature 6-inch-thick reinforced concrete floors; clear ceiling heights of 25 feet, 6 inches; metal halide lighting; and parking for approximately 200 vehicles. Interstate 264 is four miles south of the property, while Norfolk International Airport and the Port of Virginia complex are  approximately 15 miles west.

Photo credits: Google Maps.

Armada Hoffler Kicks Off $89M Mixed-Use Tower in Virginia Beach

By Adrian Maties, Associate Editor

Armada Hoffler broke ground last weekon the $89 million 794,000-square-foot Main Street Tower at Virginia Beach Town Center.
Located between Main and Columbus streets, the project will be Town Center’s fifth phase.

Nine floors of the 14-story complex will be offices. Main Street Tower will also feature 18,000 square feet of ground-floor retail, 288 apartments and a 950-car parking garage.

The project’s financing package includes $70.4 million of private investment, an $18 million contribution from the city and $1 million in local grant funding for additional infrastructure.

Norfolk-based Clark Nexsen PC is designing the tower and plans to relocate its headquarters to the building from Norfolk, along with 350 of its 550 employees. The firm of Cox Kliewer is designing the apartments. Armada Hoffler plans to complete the office tower in July 2014 and open the multi-family portion that fall.

Gov. Bob McDonnell and Virginia Beach Mayor Will Sessoms spoke at the ceremony, along with Tom Winborne, CEO of Clark Nexsen, and Armada Hoffler’s president & CEO, Lou Haddad.

Photo: Clark Nexsen

Gold Key/PHR, Norfolk Strike Deal for $126M Hotel, Convention Center Complex

By Adrian Maties, Associate Editor

Taking a step toward fulfilling a decade-old quest, Norfolk city officials announced a deal March 1 to build a $126 million hotel, conference center and parking facility downtown.

As part of a public/private partnership, Gold Key/PHR Hotels & Resorts will build a 300-key upscale hotel, a 50,000-square-foot conference center and 600-space parking structure at the corner of Main and Granby Streets, on a site the city spent around $16 million to clear.

Gold Key/PHR & Resorts will finance the $64 million cost of the hotel. The city will pay for the $42.5 million conference center using revenue from the Public Amenities Fund, which levies a 1 percent tax on meals and lodging. Officials say that the fund generates enough money to cover the debt service on the conference center without additional sources of financing. Revenue from the city’s parking fund will cover the $19.5 million cost of the parking structure.

“This is an important moment for Norfolk,” commented Mayor Paul D. Fraim. “The hotel and conference center project follows closely on the heels of Waterside’s revitalization. These companion projects add $150 million of new development, more than a thousand new jobs and will grow and diversify our economy.”

Bruce Thompson, CEO of Gold Key/PHR Hotels & Resorts, said that SLS HOTEL in Los Angeles, W Hotels, the Delano Miami, The Hudson in New York City and other properties will provide inspiration for the hotel’s design.

Rendering courtesy of the City of Norfolk.