Commercial real estate loan work-outs, Richmond, Virginia

Andrew Little reports in today’s Richmond Times Dispatch that the FDIC has come out with a 33-page advisory document on how banks can assist commercial real estate owners with maturing loans. The document presents a variety of scenarios for several commercial property types, and instructs lenders how to handle each scenario. One of the dominant themes, although not explicitly stated, is that the FDIC wants lenders to have updated appraisals. In the one or two scenarios in which the financial institution made internal changes to an outdated appraisal, the FDIC slapped their hand.

FDIC opinion on prudent commercial loan work-outs

Booze, gambling, debauchery, Richmond, Virginia

Now that I’ve got your attention, please come down to the Science Museum of Virginia tonight at 6:30. For $25, you can partake in an open bar (wine and beer), food from Groovin’ Gourmets, charity casino games, plus plenty of door prizes (bring a business card). The event benefits Elderhomes. The majority of attendees are real estate participants in the Richmond MSA.

Charity casino night at the Science Museum of Virginia

Richmond Rapport and the Universe Society are hosting a party next Thursday in the main atrium of the Science Museum. Tickets are $25 and include open bar and heavy appetizers from the Groovin’ Gourmet. For information, visit www.richmondrapport.com.

Roll2Rebuild09

Federal Reserve on Richmond (area) commercial real estate

The Federal Reserve “Beige Book” is a summary of qualitative data, i.e., interviews, from each of the twelve districts regarding economic conditions. Below is the most recent Beige Book data for the Richmond District (Maryland, Washington DC, West Virginia, Virginia, North Carolina, and South Carolina), dated October 2009:

Real Estate (Commercial)

 

While commercial real estate activity in the District remained depressed, most real estate agents reported signs of improvement over the last month at least in terms of expressing interest in long-term expansion. One agent noted an increase in foot traffic from retailers interested in developing new sites next year. Few were willing to commit yet, but an increasing number were revisiting earlier expansion plans that had been put on hold over the last year. Industrial real estate activity in most areas of the District was often described as “dead,” and new construction of industrial or office buildings was further deterred by difficulty obtaining financing. Small business startups in Northern Virginia were also having trouble getting financing, often due to an inability to meet higher down-payment requirements.

American Family Fitness facilities proceeding, Chesterfield County, Virginia

Structural steel for the new American Family Fitness is going up at 13201 Midlothian Turnpike. Also, the proposed redevelopment of the old Kroger at Chalkley and Iron Bridge roads is reportedly still on. The developer expects to close on the property mid-November, and deliver an operational facility to AFF by April 2010.

New subdivision, West End of Henrico County, Virginia

Patterson Investments, Inc. has requested to rezone the southeast corner of Patterson Avenue and Maybeury Drive to allow for up to 6 units per acre. The 6.13-acre site is immediately north of Maybeury Elementary and immediately west of the YMCA.

Fuddruckers closing, Henrico County, Virginia

The hamburger joint just west of Parham Road on West Broad Street is closing. The real estate can be yours for $1,700,000 ($231.92 per square foot).

Staples Mill Marketplace, Henrico County, Virginia

On October 15, 2009, the Henrico County Planning Commission will hear the request from Bill Axselle to conditionally rezone 28.914 acres on the south line of Staples Mill Road across from Staples Mill Square (Target, Office Max, Food Lion). The applicant proposes a 200,000 square foot shopping center.

Carytown vacancy, rent levels, new construction, Richmond, Virginia

Richmond BizSense reported in April that Carytown vacancy is increasing, as evidenced by the number of vacant storefronts increasing from 17 to 25 (13.9% vacancy rate) between September 2008 and April 2009. Until now, I hadn’t had any reason to research this historic node more closely. While my analysis is certainly not bulletproof (City of Richmond building square footage is notoriously incorrect), I think it’s more meaningful than simply counting storefronts. I suppose the argument can be made that fifteen 1,000 square foot storefronts going dark is notably worse than a single 15,000 square foot junior anchor-type business, in which case the storefront count is more useful.  Anyway, excluding the two grocery-anchored centers at the western edge, the City of Richmond shows just under 460,000 square feet of commercial space along West Cary Street. Using Costar, Loopnet, the local brokerage websites, plus FLBO (for lease by owner) signs on the street, I identified just over 40,000 square feet of available space, indicating a vacancy rate of 8.83%–not too shabby in this market.

Similarly, while rental rates have come down over the last year or two, they still hover around the $20.00 mark, which (barely) keeps the “for sale” market open to investors as well as owner-occupants.

On the topic of Carytown, 3322 West Cary Street is the home of the successful Bangles & Beads. Since June 2009 the property has been proposed for redevelopment. As of September 2009, demolition is nearing completion. The end result will be a new 2-story building with Bangles & Beads reclaiming the first floor, and a new restaurant on the second floor. The total building area is increasing from 2,300 square feet to nearly 5,400 square feet.

New home construction in the Richmond MSA

As reported in today’s RTD, there are two new homes under construction in Patriot’s Landing. This is a great subdivision which is certainly in need of a breath of fresh air. During the first 12 months of the project, 98 lots were sold. From June 2008 to June 2009, only one lot transferred….scary. Hopefully it’ll get a jumpstart before the year is out.