A downtown tower preparing for a $31 million renovation didn’t have to look far for its first big ground-floor tenant.
Virginia Commonwealth University last week signed a lease for 15,000 square feet of street-level space at the 700 Centre on East Franklin Street. The property is being converted into 174 apartments by local firm Genesis Properties and Virginia Beach-based developer Armada Hoffler.
VCU had offices on the 10th floor of the 12-story building but is vacating that space ahead of the 175,000-square-foot building’s conversion. The move opens the upper floor for apartments.
Chris Odle, a development manager at Armada Hoffler, said 80 percent of the building’s 20,000 square feet of ground floor space is leased. Such a figure is rare among buildings recently converted to residential in the business district.
“The retail market there has been kind of spotty, and vacancies have been higher than folks would like,” Odle said. “We feel lucky, and we’re very glad VCU has decided to stay.”
The space will house the school’s Partnership for People with Disabilities and another department.
Suzanne White, a broker with Cushman & Wakefield | Thalhimer, represented Armada Hoffler in the deal.
Odle said the firm is looking to close this month on its construction loan from the Virginia Housing Development Authority.
They expect to start construction this summer and to have the apartments ready for the market by fall 2014.
MGT Construction is the general contractor for project. Walter Parks is the architect on the apartment portion. Commonwealth Architects is designing the office space for VCU.
Ground-floor retail space in downtown conversion projects has been difficult to fill in recent years. Miller & Rhoads recently signed its first retail tenant, Liberty Mutual, after having its space on the market since 2009. That project still has about 19,000 square feet to fill.
The Residences at the John Marshall recently cut its asking price to fill roughly 27,000 square feet of ground-floor retail space.
And down on the Haxall Canal, the 7,500-square-foot Blackfinn space on the ground floor of Riverside on the James building has been vacant since the restaurant closed a year ago.
Armada and Genesis bought the property, built in 1912, for $7.2 million. Armada Hoffler’s most prominent recent project in Richmond was the Williams Mullen building downtown.