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Think there’s nothing left in the Slip to convert?

Al Harris August 4, 2010 14

One of the last undeveloped buildings in Shockoe Slip is getting the rehab treatment.

Richmond-based Monument Construction bought a 38,000-square-foot warehouse that was built as a smokehouse for hogs at 1425 E. Cary St. and started construction.

In addition to converting the building into 38 apartments, Chris Johnson, a principal of Monument Construction, said the company is moving its offices into the commercial portion of the project.

“We like Scotts Addition a lot where we are, but we have been on a lookout for a marquee type building to move us into for several years. This is the first one we wanted to jump on,” Johnson said.

Monument just closed on the building for $1.6 million and will spend more than $3 million on development and construction, Johnson said. The project is being financed by Xenith Bank, along with historic tax credits. Johnson said he has been working on the deal since January.

Johnson said they have about 30 employees who will be moving into the finished commercial space, about 6,000 square feet. He said they are currently stabilizing the building and will ramp up construction in the next 30 days with a completion target of next spring.

The property is next to several restaurants and shares the block with the La Difference furniture store and another warehouse apartment complex being rented by Clachan Properties.

“It’s a premier location,” said Johnson. “There is not much left for development in the Slip.”

The new one- and two-bedroom apartments will rent between $950 and $1400 a month, he said. The architect is Scott Fowler with Fowler Architecture.

Johnson said the project is a joint venture with Sensei Development, Monument’s partner on a nearby apartment conversion a few blocks away in Shockoe Bottom.

That is a multi-phase project called Shockoe Valley Heights, located on the block surrounded by Franklin, Main, 20th and 21st streets. The first phase, called Bobber Flats, is fully leased, said Johnson. (You can read more about that project in an RBS story here.)

“The Bottom is just really strong. It is where people want to live right now,” Johnson said.

Johnson said his firm has also finished three luxury units that will rent for about $2,000 each inside of the historic firehouse on Main Street. He is still looking for a commercial tenant for that building.

Another 25 apartments plus 2,000 square feet of commercial space in the building next to the firehouse called Engine Company Lofts will be ready in October.

Johnson said he is close to finalizing financing for the next-to-last phase, called Old Stone Row, which consists of 96 apartments to be built on the site of the demolished Secrets of the City nightclub.

Jack Berry, executive director of Venture Richmond, said the newly announced project follows a steady stream of apartment uses downtown.

“There seems to be no end to the demand for apartments in downtown Richmond, despite the economy,” Berry said.

Berry said that the primary demographic for the area is young professionals, who are drawn by architecture, arts and culture, and proximity to work opportunities and restaurants.

“While the condo market has certainly contracted, the apartment market is still very strong,” Berry said.

Al Harris is a BizSense reporter. Please send news tips to [email protected]

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14 Comments »

  1. Steve August 4, 2010 at 6:58 am - Reply

    Here we go again Developers in this State find an area they think will really pop and Overdevelop it and wonder a few years from now why they can’t sell or rent places. They need to increase shopping in the area but they are too busy being greedy and charging as much as they can get away with and increase it every year without any improvements. Shockoe Bottom is going to get way worse before it gets better at this point.

  2. Todd Foster August 4, 2010 at 8:42 am - Reply

    $950 for 1 bed? Are they crazy?? Next door at Clachan you can get a 1 bed for $750. Geez, who’s gonna win that one????

  3. DaveM August 4, 2010 at 8:44 am - Reply

    Why would anyone want to pay $2,000/month for renting a place anywhere in Richmond? I don’t care what it has inside. That’s just ridiculous.

  4. Sam McDonald August 4, 2010 at 9:14 am - Reply

    I think Thalhimer’s and Miller & Rhoads passed on buying that building because there weren’t enough people living downtown to support shopping. Monument Construction is smart to bet their personal guarantees and business resources on residential. There are plenty of vacant retail and office spaces downtown (required to be built by zoning codes) just waiting for willing and able tenants. Monument is solving that problem by taking their own office space in a growing area. As a developer that also wants a healthy mixture of residential, retail, and office in our downtown, I encourage Steve to open a store for the residents that companies like Monument are providing.

  5. Megan August 4, 2010 at 9:19 am - Reply

    Between those working downtown and at MCV, I doubt there’s a risk of overdeveloping – and the more nice developments that go into the Bottom, the more it helps develop the overall neighborhood. More shopping opportunities will come naturally as more and more live there, but like the article says, the main demographic – young professional renters – is probably more interested in restaurants, nightlife, and being close to work.

  6. Angel August 4, 2010 at 9:30 am - Reply

    I agree… enough already with the apartments…. offer the people that live in the Bottom some shopping….. why is it that the Bottom isn’t as Carytown, just abit more urban?

  7. Steve August 4, 2010 at 10:46 am - Reply

    Megan they already have plenty of apartments but they don’t have shopping and enough Resteraunts to make it worth paying the 900-2000 they want to charge people to live there. Trust me I used to live in Shockoe Bottom for 5 years and they are already overdeveloped for what they have to offer

  8. Jason B. August 4, 2010 at 12:00 pm - Reply

    You have to admire Monument’s efforts here. They are sticking there necks out on another rehab apartment project when all this Justin French stuff is flying about. My thought is that they can afford to pay a premium for the RE investment because they will owner occupy the facility. And heck why not, they are borrowing some the cheapest money anyone has ever seen. Cheers to another years worth of construction work for an industry that is holding on for dear life!

  9. Erica Bobbit August 4, 2010 at 12:07 pm - Reply

    To the people who complain about the high prices of these new apartments: I don’t think that they built those apartments with you in mind. They are interested in attracting people with a higher income.

  10. Prince Rich August 4, 2010 at 2:50 pm - Reply

    I’ve got a 3 bedroom in Short Pump for less than what they are asking for, for the two bedroom so I think it is a bit pricing for such a small amount of space, BUT as a business man if people buy it and they are ok with the prices and can afford it, more power to the property manager.

    Thats what its all about is supply and demand. 🙂

  11. Kevin Anderson August 4, 2010 at 5:26 pm - Reply

    True, renting an apartment in the suburbs will be much cheaper but if you work downtown you have to add in $150+ a month for parking plus gas, increased time spent commuting, increased mileage on your car and the resulting increased insurance cost of the vehicle. Factor in all of this and $950 is not looking that bad at all. If I worked downtown there’s no way it would be worth the savings for me to live in the suburbs as someone in their mid twenties with no children to support.

    One of these developers should seriously consider building out retail space for a grocery store to compete with the Market, as right now they are the only game in town for all the people that live down there.

  12. Todd Foster August 4, 2010 at 8:58 pm - Reply

    Hey Bobbit – I am an attorney downtown so I doubt my income is not the problem. Point is…why would I pay $900 when I can go next door with comparable amenities/finishes and pay $750. Just becasue “we” have the income doesn’t mean we should spend it unwisely. Sounds like the developer’s rent expectation is unrealistic and the banker is blinded by historic tax credits which accounts for about 35% cash equity (all of which likely pays down the developer’s $5.5 million loan to about $3.5 million. Thank you.

  13. Steve August 5, 2010 at 9:24 am - Reply

    Amen Todd that is why I think Developers and the Rental companies have lost their minds thinking that a High pricetag will bring anyone to a place like Shockoe Bottom. If they concentrated on More economical Apartments and add some more retail they would not destroy what is already happening there

  14. jd August 6, 2010 at 7:38 am - Reply

    Kudos to Chris & Tom on this project! This will be a great project for the Slip. For those doubting the rents there, you just can’t compare the rents to apartments in Short Dump. I grew up in the suburbs, and I will never go back! I live downtown now, and it a great lifestyle. I guess it’s all in what you want, some people want to live in Long Island, some people want to live in Manhattan; same thing in Richmond I guess. Short Pump is just Richmond’s Long Island!

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