Thalhimer announced this week that they had been selected as the exclusive representative to market the property.
Broker Eric Robison said they have not set an asking price. The property, known as Deep Run I, was recently appraised at $46.2 million. The five-story office building has 288,650 square feet of space.
The building’s previous owner, New York-based Lexington Property Trust, defaulted on a $17 million commercial mortgage during the third quarter of last year. The lender foreclosed on the property with a balance of $15.5 million left unpaid. (You can read more about that in a BizSense story here.)
“When Circuit City fell, Lexington had a big vacant building with an even bigger mortgage that they didn’t want to keep paying on while they were looking for a tenant,” Robison said. “They leveraged the property based on Circuit City being a tenant in the building. When [Circuit City] left, they had no significant cash flow.”
In other words, Robison said, “They gave the keys back.”
The loan was bundled and sold as commercial mortgage backed security (CMBS loan), so now a few private investors own the property; Morgan Stanley owns the controlling interest. The servicer for the loan is Berkadia Commercial Mortgage.
The building was one of two Circuit City headquarters buildings in the Deep Run park off Gaskins Road in Western Henrico. The other, Deep Run III, was not owned by Lexington.
Robison said Thalhimer would be talking with government entities and economic developers to make them aware that the property is available. The building includes a cafeteria, auditorium, data center, day-care center and even volleyball courts and a softball field.
The fifth floor was home to the executive suite, once the stomping ground of Circuit City bigwigs. Those digs have cherry paneled offices and a covered balcony that overlooks the entire campus.
Although it could be a while before a buyer is found, Robison said the owners would be amenable to leasing the property.
Al Harris covers commercial real estate for BizSense. Please send news tips to [email protected]