Take a short walk along a certain downtown stretch of Broad Street and it becomes abundantly clear what is taking place: A new wave of change.
It’s marked at street level with a longtime barbershop, pawn shop and jeweler all closing down after decades on neighboring blocks of Broad – their buildings either already sold or looking for a suitor.
Then there’s the new crop of businesses, with Quirk Hotel as the tallest example, adding to a changing vibe that has brought with it an ice cream parlor, a high-end clothing and shoes store, and a chocolate shop.
A broader, less obvious view of this evolution can be seen in city property records, which show real estate investors and developers taking a particular liking to the neighborhood in the last few months, pouncing on what is beginning to be seen as prime plots for office, retail and residential units.
Since July, six properties have sold on the 100, 200 and 300 blocks of E. Broad St. for a combined $3.1 million, according to city records, their new owners undoubtedly planning to redevelop their old storefronts into office, retail or apartment space, or perhaps go vertical with new construction. They include the sales of 209, 315, 313, 311, 309 E. Broad St.
This is all happening on the roughly 10-block drag on Broad between Belvidere Street and the Greater Richmond Convention Center.
And while the early adopters like the art galleries and restaurants like Comfort and Tarrant’s can argue they were the frontrunners, the neighborhood’s momentum seems to have shifted into another gear in the second half of 2016.
“There seems to be this spillover into the area, where this section of West Broad has become like new territory and everyone is trying to get in before it’s too late,” said Ronald Stallings, a local developer and owner of the Hippodrome Theater, which sits a few blocks back from Broad.
Still, much of the intensity of the area’s redevelopment rests in the hands of the immediate area’s largest stakeholder – an out-of-town landlord that has been strategic, patient and careful in showing its hand.
The Douglas effect
Washington, D.C.-based Douglas Development holds what can be seen as the key to the neighborhood.
The company owns about a dozen buildings along a two-block stretch of Broad Street and Jackson Ward, including the anchor of this section of downtown: the 23-story, 240,000-square-foot Central National Bank building at 219 E. Broad St. that it renovated and recently unveiled as the Deco at CNB apartments.
Douglas paid $5.3 million for the dormant tower in 2005, sitting idle on the property for nearly a decade while quietly gaining a grip on a cluster of storefronts around it.
With the exception of the $20 million redo on the CNB building, Douglas Development has remained publicly mute about its plans for the rest of its holdings in the downtown area. Company principal Norman Jemal could not be reached for comment.
Most recently, the firm put down a contract to buy the Friedman’s Pawn Shop building at 118 E. Broad St.
John W. Goodman, owner of Friedman’s, said the development firm is set to buy the building for $365,000. He said the shop is set to close sometime in December, ending a decades-long run on Broad.
Bachrach’s Jewelers, at 111 E. Broad St., is also set to leave the block and has listed its building for sale at around $449,500, said Ann Schweitzer, broker with Richmond-based One South Commercial, who shares the listing with colleague Tom Rosman.
Other nearby transactions include Harvey’s Progressive Barbershop at 22 E. Broad St., which closed up in October after a Richmond-based entity – 22 E Broad LLC – snapped up the property for $345,000 on Oct. 14, according to city records.
“There is a lot more interest in the area than there has been in years past,” said Reilly Marchant, a broker with Richmond-based Cushman & Wakefield | Thalhimer who serves as the tenant rep for a number of Douglas Development’s Richmond properties. “I think you’re going to see a lot more momentum in the area heading into 2017.”
For Marchant, that momentum may already be here.
Nearly 14,000 square feet of retail space on the ground floor of the Deco at CNB building has been leased to a tenant, although Marchant would not disclose any details about the transaction.
“It’s going to be a great addition to the neighborhood,” Marchant said.
And more big announcements could be pending, thanks in part to the boom in a neighborhood nearly two miles away.
Scott’s Addition spillover?
With its brewery and cidery counts mounting, new apartment construction booming and its centralized location in the city, Scott’s Addition is arguably the hottest neighborhood in Richmond.
So it came as no surprise that Chocolates By Kelly owner Kelly Walker Wombold decided to take a peek at some retail space in Scott’s Addition when exploring the possibility of relocating her Manchester-based chocolate confectionary across the river.
“I liked what I saw,” Wombold said of some of the retail space in the hopping neighborhood.
But there was one problem: It was too expensive.
“(Landlords) were asking for a lot to be down there,” Wombold said.
However, Wombold and her business partner, Dan Steiner, had a feasible backup – to try moving their chocolate operation to the Arts District downtown.
After viewing a few spots, the duo settled on the former Lewis Parker Studio space at 414 W. Broad St.
“We should have looked here first,” Wombold joked. “The space is large enough for us to grow, there is visibility from the street and sidewalk, and being down the street from the new VCU art gallery and Quirk Hotel is going to be good for us…and it was much more affordable.”
It’s a natural progression for development in the city, some brokers and developers have said, as the leasing rates in the Scott’s Addition neighborhood heats up.
“There is some effect,” Stallings said of the idea of Scott’s Addition spillover. “I think people are starting to get priced out of the Scott’s Addition, and realizing that they can get visible space on Broad, in a historic neighborhood for less the price, are making their way downtown.”
Andrew Cook, director of research at CBRE | Richmond, said the average leasing rate in the greater Jackson Ward area along Broad Street has hovered around $16.07 per square foot. That’s about $2.50 to $4 cheaper a square foot than what potential users would find in parts Scott’s Addition.
“In some cases, depending on any work being done to the building, the rate could be higher,” Cook said.
That doesn’t appear to be stopping the recent wave of retailers that have set up shop along the block.
Charm School, an ice cream shop and bakery at 311 W. Broad St. where Quirk Gallery used to be, is set to open in about 3,000 square feet of space in the coming months.
Ledbury has moved its flagship store and headquarters into 11,700 square feet of space at 315 W. Broad St.
VCU and the future
With its distinctive design and prominent location, the VCU Institute For Contemporary Art complex that’s under construction at the intersection of West Broad and Belvidere streets is more than the city’s symbol for its love of the arts – it’s a clear gateway of another wave of redevelopment and development set to cascade over the immediate area.
“It’s such a major piece to all of this,” Schweitzer said of the ICA complex. “When you look at Broad Street, there are still a number of properties that are ripe for development.”
If Douglas Development is the linchpin of the future of the eastern end of this stretch of Broad, VCU is clearly the anchor of the western border.
Many of the buildings, located in the 500 and 400 block stretch of W. Broad St., are owned by VCU. It has made a habit of paying a premium for properties around the ICA, including dropping $3.15 million for the former Hess gas station across Belvidere at 535 W. Broad St. That property, for now, remains a vacant lot.
Many other buildings on the adjoining blocks are owned by just a few private landlords.
Calls to Richmond-based Venture Development LLC, who owns the property at 401 and 409 W. Broad St., were not returned by Wednesday afternoon. The owners of 427 W. Broad St. and 501 W. Broad St., Henry North LLC and Franchise Real Estate Concepts LLC respectively, could not be reached for comment.
All these maneuvers coincide with the shift of population migrating back to a desire for city dwelling.
Since the last U.S. Census, the city’s population has climbed from about 204,000 residents in 2010 to just over 220,200 people, according to a 2015 census estimate.
The future bus rapid transit line taking shape on the street will also bring changes by moving people through that part of downtown in a different way.
“Everybody all of sudden wanted back in,” Stallings said of the city’s demographic shifts. “The suburbs were no longer sexy.”
Duke Dodson, president of Richmond-based Dodson Property Management that handles many properties downtown, said momentum along this swath of Broad has been building for some time.
Dodson and some of his partners have also put some chips down on the future of this stretch. UrbanCore Development, with which Dodson has worked on several deals, last year bought 209 W. Broad St.
The 6,000-square-foot building has been vacant for 10 to 15 years and the group has revived it with apartments and retail space.
Dodson hinted at more major announcements coming for the neighborhood.
“There’s going to be some really exciting news coming soon,” Dodson hinted while being careful not to disclose too many details. “I think when you look at what’s happening along West Broad [downtown], its activity that’s poised to transform the area, and that excites everyone looking for space in the area.”