Deep Run deal nears finish line

A local real estate investment group is close to owning a massive office building that has been vacant since a major Richmond-based company collapsed in 2008.

Diversified Realty Ventures has a contract to buy Deep Run III, the 383,000-square-foot office that was one of two buildings that made up Circuit City’s former corporate headquarters. It is at 9954 Mayland Drive in Henrico County.

Spilman Short Jr., one of the principals at DRV, confirmed that his firm has the building under contract and expects to close soon.

“It is a joint venture with a major institutional equity fund,” Short said, declining to disclose the purchase price.

Short, whose company owns various properties throughout the Southeast, said the property is in an extremely good location.

“I think with a lot of the leasing activity around town and the fact that Mondial has taken the adjacent building off the market — and that we are getting a getting a good price — it makes a lot of sense to buy it,” Short said.

Short’s company has been active in Richmond recently. Three weeks ago it purchased a 76,000-square-foot flex space at 8040 Villa Park Drive in Henrico for $4.3 million. Markel/Eagle provided the equity financing for that deal.

Diversified Realty Ventures also owns two shopping centers in town: Spring Centre Shopping Center in Mechanicsville and Midlothian Station Shopping Center in Chesterfield.

Its latest target, Deep Run III, was taken back by the lender in February after Inland Western, an Illinois-based REIT, defaulted on its loan with a remaining balance of $31.2 million.

Next door is Deep Run I, which housed Circuit City’s executive offices. That building was taken back by the lender in 2009 when New York-based Lexington Property Trust defaulted with $15.5 million left unpaid.

Local development group Pruitt Associates bought it and the land around it a year ago for $6 million. Last May, locally based travel insurance firm Mondial Assistance announced that it had leased 240,000 square feet there and would move there in 2012 from various offices it currently occupies around town.

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