the JAMES CENTER RICHMOND VIRGINIA

Transcription

1 the JAMES CENTER RICHMOND VIRGINIA

2 THE JAMES CENTER RICHMOND, VIRGINIA A GENERATIONAL OFFICE OPPORTUNITY INVESTMENT SUMMARY ADDRESS One James Center 901 E Cary Street, Richmond, VA Two James Center 1021 E Cary Street, Richmond, VA Three James Center 1051 E Cary Street, Richmond, VA YEAR BUILT NET RENTABLE AREA 1,001,940 SF ONE JAMES CENTER TWO JAMES CENTER THREE JAMES CENTER Holliday Fenoglio Fowler, L.P. ( HFF ), a Virginia licensed real estate broker, has been retained as the exclusive sales representative for The James Center (the Property ), comprised of three iconic office towers in the Richmond, Virginia CBD. The Property is centrally located in the River District of Downtown Richmond offering convenient access to historic Shockhoe Bottom, high-end residential, corporate decision makers, and numerous nearby amenities. Richmond maintains a diverse, thriving economy, featuring a 3.7% unemployment rate (7th lowest in the country according to the Bureau of Labor Statistics as of July 2016), eleven Fortune 1000 companies headquarters and a well-educated work force. Richmond, historically known for its agricultural roots, presently features a well-diversified employment base with a heavy presence of advanced manufacturing, finance and insurance industries. Richmond s economy continues to expand behind its flourishing fundamentals, well educated workforce, and a pro-business market, which greatly benefits from some of the lowest combined state and local tax rates in the nation. In summary, this investment offering represents a rare, generational opportunity to acquire three of Richmond s most iconic assets. Investors will immediately benefit from James Center s attractive credit tenant roster, coupled with an irreplaceable CBD location at a highly attractive cost basis. Moreover, current occupancy of the Property is significantly below historical occupancy, leaving investors with considerable upside potential. One James Center 426,096 SF (21 stories) Two James Center 340,974 SF (22 stories) Three James Center 234,870 SF (14 stories) ACRES OCCUPANCY Portfolio 66. One James Center 50.0% Two James Center 92.0% Three James Center 58.0% PARKING One James Center Two James Center Three James Center THE JAMES CENTER 2 0.5/1,000 SF 1/1,000 SF 1/1,000 SF

3 PERFECTLY POSITIONED ASSET WITHIN THE RICHMOND CBD RICHMOND INTERNATIONAL AIRPORT 15 MILES The James Center features two on-site restaurants and greatly benefits from its connection to the Omni Hotel and its three restaurants; Trevi s Grille, Trevi s Lounge, Trevi s Market and Starbucks. Additionally, the property is within walking distance to over one hundred restaurants ranging from fast casual to fine dining, including notable restaurants such as Pasture, Rapp Session and the Dining Room at the Berkeley Hotel. The Property is ideally located along James River in the heart of flourishing Downtown Richmond offering multiple attractions and entertainment outlets including the James River Park System, Bon Secours Washington Redskins Training Center, Richmond Coliseum and Stone Brewry. Visitors have multiple lodging options including the four star Omni Hotel ( directly adjacent to the James Center), the Berkley hotel, the Jefferson Hotel and Westin Richmond. THE JAMES RIVER RIVERSIDE ON THE JAMES RIVERFRONT PLAZA VISTAS ON THE JAMES THE LOCKS FEDERAL RESERVE MEADWESTVACO JAMES THREE (BEHIND) WILLIAMS MULLEN SHOCKOE SLIP NEIGHBORHOOD COURTYARD RICHMOND 195 THE OMNI JAMES TWO JAMES ONE ONE JAMES RIVER PLAZA CROWNE PLAZA BANK OF AMERICA CENTER SUNTRUST CENTER GATEWAY PLAZA CAPITOL PLACE VIRGINIA STATE CAPITOL U.S. COURT OF APPEALS FOURTH CIRCUIT CAPITOL SQUARE RICHMOND PLAZA THE JAMES CENTER 3

4 SIGNIFICANT OPPORTUNITY TO PURCHASE ICONIC ASSESTS BELOW REPLACEMENT COST TWO JAMES CENTER With an estimated replacement cost of $350 to $375 per square foot, potential investors are presented with an excellent opportunity to invest at an extremely attractive basis, in turn, driving significant bottom line growth. Bolstered by an epicenter location and abundant surrounding amenities, investment opportunities such as this one are truly generational. THREE JAMES CENTER PGSF PER LAND SF PER PARKING SPACE PERCENT OF COST LAND COSTS $10,019,400 $10 $87 3% HARD COSTS $260,504,400 $260 74% SOFT COSTS $60,116,400 $60 17% TOTAL BUILDING COST $330,640,200 $330 94% ONE JAMES CENTER PARKING COSTS $20,038,800 $20 $20,000 6% TOTAL COSTS $350,679,000 $ % HIGHLY-ATTRACTIVE COST BASIS STABILIZED COST SIGNIFICANTLY BELOW COMPETITION Investors are given a rare opportunity to buy the James Center at significant discount to both replacement cost and sale comparable cost. An investor s stabilization of the Property, inclusive of subsequent lease-up and capital costs, offers a significant discount to recent sales comparables. In the last 25 months, Richmond s CBD has seen five significant office transactions (those defined as $40,000,000 and higher) resulting in a weighted average price per square foot of $222. With the recent trade of the William Mullen s Tower (marketed by HFF), pricing in downtown Richmond for stabilized office assets have reached over $375 per square foot. THE JAMES CENTER 4

5 PRE-RENOVATION RENOVATION RENDERINGS VALUE-ADD ENHANCEMENT OPPORTUNITY Prospective owners have a superb opportunity to harness considerable upside through modest capital improvements. As seen in the One James Center renderings, current ownership has taken considerable steps to conceptualize the necessary improvements that will substantially drive rental rates and allow for a strong return on a capital investment. By completing capital improvements such as the aforementioned lobby renovation, the James Center will be able to push rents and compete with A+ buildings like Gateway Center, located immediately across the street from the Property. THE JAMES CENTER 5

6 TENANT OVERVIEW COMPANY BUILDING CREDIT RATING VEDP (HQ) One James Center Fitch AAA Moody' Aaa Connecticut General Life Insurance (CIGNA; NYSE: CI) One James Center Fitch A+ Moody's A1 S&P AA- Wells Fargo Bank (NYSE: WFC) Two James Center Fitch AA Moody's Aa1 S&P Aa1 Ameriprise Holdings (NYSE: AMP) Two James Center Moody's A3 S&P A U.S. Bank National Association (NYSE: USB) Two James Center Fitch AA Moody's Aa1 S&P Aa1 Appalachian Power Company Three James Center Fitch BBB Moodys' Baa1 S&P BBB E.I Du Point De Nemours and Co (NYSE: DD) Three James Center Fitch A Moody's A2 S&P A JP Morgan Chase Bank (NASDAQ: JPM) Three James Center Fitch A+ Moody's A3 S&P A- Minnesota Life Insurance Three James Center Fitch AA- Moody's Aa3 S&P A+ 4% 4% 1% 65% TENANT INDUSTRY PROFILE FINANCE INSURANCE AND REAL ESTATE (F.I.R.E) 65% BUSINESS SERVICES 21% NON PROFIT (YMCA) 4% AGRICULTURE 4% ATTRACTIVE, CREDIT TENANT ROSTER WITH SIGNIFICANT REMAINING LEASE-TERM The James Center offers an attractive tenant roster (many of which are headquartered at the Property) inclusive of local, regional, national and international companies from various industries. The top industries within the portfolio consist of Finance, Insurance and Real Estate (F.I.R.E) (64.63% of the overall portfolio) and Business Services (20.63% of the overall portfolio). Notable companies include Wells Fargo Bank (NYSE:WFC Moody s Aa1), Virginia Economic Development Partnership (Private, HQ Moodys Aaa) and the Davenport & Company (Private, HQ). Not only is the James Center comprised of a diverse tenant base, it is stabilized by an impressive percentage of credit worthy tenants. Currently, 40% of tenants maintain investment grade credit with nearly five years of average weighted remaining lease term, providing additional security to prospective investors. 21% LEGAL SERVICES MISCELLANEOUS FOOD SERVICES OIL & ENERGY 1% TENANTS WITH SIGNIFICANT REMAINING TERM* Virginia Economic Development Partnership 55,007 SF years Dixon Hughes Goodman LLP 20,886 SF 9.42 years Stifel, Nicolaus & Company 11,785 SF 6.92 years Davenport & Co of Virginia 79,836 SF 5.00 years * as of 1/1/2017 THE JAMES CENTER 6

7 HEALTHY ECONOMY POISED FOR GROWTH The Richmond market benefits from a stable, robust and diversified local economy. Diverse industries and companies combined with numerous educational institutions, such as the University of Richmond and Virginia Commonwealth University, provide an ample supply of well-educated employees with a range of skills and experience for both new and expanding companies. As a result, a number of companies have moved their headquarters to the Richmond market. Notable firms who have chosen Richmond as the perfect site for their corporate headquarters relocation include: Altria Group, Dominion Resources and MeadWestvaco. Firms are choosing headquarter locations where traffic is light, school systems are strong and legislation is supportive of business. Richmond offers a rare blend of business-friendly regulations, affordable yet high-quality lifestyles and first-class executive amenities making Richmond an ideal site to relocate. Additional firms who have grown organically in Richmond and maintain their headquarters there include Genworth Financial, Universal Corporation, Virginia Economic Development Partnership, McKesson Medical-Surgical Inc. and Markel. Additionally, the presence of the Federal Reserve Bank of Richmond underscores the area s leading presence in the financial services industry. Richmond is currently home to ELEVEN FORTUNE 1000 COMPANIES Inclusive of numerous industries including finance, agriculture, and manufacturing. RICHMOND ACCOLADES & ECONOMIC HIGHLIGHTS RICHMOND MSA POPULATION (2016 Estimate) 1,268,025 PROJECTED POPULATION GROWTH ( ) 8.1 UNEMPLOYMENT RATE 3.7% JOBS ADDED ,530 N O.3 N O.3 BEST PLACES TO TRAVEL TRAVEL & LEISURE MAGAZINE BEST CITY TO START A BUSINESS INC. MAGAZINE CITIES FOR BUSINESS GROWTH HUFFINGTON POST N O.4 MIDSIZED AMERICAN CITIES OF THE FUTURE FDI MAGAZINE TOP 10 TOP 10 TOP 10 OUTSTANDING CITIES TO RELOCATE YOUR HQ SOUTHERN BUSINESS BEST CITIES TO RELOCATE TO IN THE U.S HUFFINGTON POST THE JAMES CENTER 7

8 ICONIC ASSETS STEEPED IN AMERICAN HISTORY In 1985, the developers of The James Center, CSX Corporation and Faison Associates, set out to make a statement with the design and construction of downtown Richmond s largest mixed-use project. A major challenge CSX and Faison faced was making that statement while preserving the site s history, one steeped in the history of Colonial and Civil Wars. The majority of The James Center s underlying parcels functioned as the Great Turning Basin of the James River and Kanawha Canal. The basin was designed for barges to unload cargo, while allowing enough room to turn around and prepare for their return trips. During The James Center s construction, workers found remnants of 63 Kanawha Canal boats buried 20 feet below Cary Street. The boats were assumed to be abandoned in the canal boat basin nearly 200 years ago. While Construction was delayed as an on-site archaeologist supervised the project, the salvage and preservation of the unearthed barges took precedent to preserve such a unique piece of history. One additional challenge the developers faced was assimilating The James Center with the surrounding, older traditional office buildings and the historic Shockoe Slip Warehouse district. The developers and architects successfully balanced unity of design of the three buildings, while allowing each building to have its own identity. The unique design of the three very different buildings stands out in sharp contrast to the neighbouring buildings. The impact of The James Center on the city s skyline is undisputed and has had a profound impact on Richmond s architectural story. While The James Centers impact on the skyline is the most noticeable, the impact on the community cannot be overlooked. The James Center s welcoming, people first environment offers guest wide brick-paved sidewalks and trees, surrounded by seasonal plantings. The Plaza, one of the focal points of the initial design in 1985, offers abundant seating for a variety of activities ranging from lunches, to concerts and the Richmond tradition - the Grand Illumination. In interesting homage to the sites history lies in the benches in The Plaza, where actual stones that lined the Great Turning Basin walls are used for seating. Additional respect to history can be found in the art work in The Plaza, including a clock tower featuring figures reminiscent of the barge workers from nearly 200 years ago. The James Center is a landmark in Richmond, but its significance from an architectural and historical standpoint is invaluable to the Southeast as a whole. THE JAMES CENTER 8

9 investment advisors debt & structured finance SUE CARRAS Senior Managing Director DEK POTTS Senior Managing Director RYAN CLUTTER Senior Managing Director TRAVIS ANDERSON Senior Managing Director SCOT HUMPHREY Director CHRIS LINGERFELT Associate Director CORY FOWLER Associate Director Holliday Fenoglio Fowler, L.P. acting by and through Holliday GP Corp a North Carolina licensed real estate broker ( HFF ) HFF and HFFS (HFF Securities L.P.) are owned by HFF, Inc. (NYSE: HF). HFF operates out of 23 offices nationwide and is a leading provider of commercial real estate and capital markets services to the U.S. commercial real estate industry. HFF together with its affiliate HFFS offer clients a fully integrated national capital markets platform including debt placement, investment sales, equity placement, advisory services, loan sales and commercial loan servicing. For more information please visit hfflp.com or follow HFF on Twitter at twitter.com/hff PENNSYLVANIA AVENUE NW, 5TH FLOOR WASHINGTON, DC NORTH TRYON STREET, SUITE 1400 CHARLOTTE, NORTH CAROLINA HFF has been engaged by the owner of the properties to market them for sale. The Property is being offered on an As Is, Where Is basis. Information concerning the properties described herein has been obtained from sources other than HFF, and neither Owner nor HFF, nor their respective equity holders, officers, employees and agents makes any representations or warranties, express or implied, as to the accuracy or completeness of such information. Any and all reference to age, square footage, income, expenses and any other property specific information are approximate. Any opinions, assumptions, or estimates contained herein are projections only and used for illustrative purposes and may be based on assumptions or due diligence criteria different from that used by a purchaser, and HFF, its partners, officers, employees and agents disclaim any liability that may be based upon or related to the information contained herein. Prospective purchasers THE should JAMES conduct their CENTER own independent 9 investigation and rely on those results. The information contained herein is subject to change.