For the first Richmond acquisition of his newly minted development arm, a longtime local construction executive is going big, eyeing a property he built for another firm nearly 20 years ago.
Hourigan Development, led by Hourigan Construction CEO Mark Hourigan and Joseph Marchetti III, is under contract to purchase the 125,000-square-foot former Media General headquarters building at 333 E. Franklin St.
The deal is expected to close in June and terms have not yet been disclosed. Marchetti declined to specify the purchase price. The building most recently was assessed at $10.7 million.
Hourigan is buying the property from Nexstar Media Group, which acquired Media General in a $4.6 billion deal earlier this year. That deal – announced in January 2016 – placed the combined headquarters of the two companies in Nexstar’s home of Irving, Texas, arousing speculation about what would become of Media General’s downtown headquarters. The company sold another downtown office building to VCU earlier that month.
“It’s been on our radar screen for a while,” Marchetti said Friday. “It is not every day that an institutional-quality building like this becomes available, so it’s been something we’ve been tracking.”
Marchetti said talks with Media General to buy the building began late last year. Hourigan Construction built the building for Media General in 1998, making the company keenly familiar with its potential, Hourigan said.
“When combined with our historical knowledge of the building, it made sense that this would be a great acquisition,” Hourigan said in a statement.
Marchetti said they plan to maintain the building as corporate office space, ideally for another large tenant that could fill the bulk of the building, though he said they are open to multiple smaller tenants. He said the now-former Media General still occupies the building and would maintain a presence there moving forward.
Marchetti said the 20-year-old building remains in good condition and will require only minor capital improvements. He said any work inside the building would mainly be tenant driven.
He said the building presented an opportunity even with the availability of several Class-A office spaces downtown, such as the recently purchased three-building James Center, acquired in January by Bill Goodwin’s Riverstone Properties for $108 million.
“Despite some of the large blocks of vacancy that are out there, this represented what we thought was a unique opportunity within a unique micro-market in the downtown area,” he said.
“There is a lot of opportunity that we’re seeing along the Grace Street and Broad Street corridors. We’ve got the (GRTC Pulse rapid bus line) coming along, which we think is something that will drive a lot of value. So from a location standpoint, you get a lot of the advantages of being downtown without having to deal with a lot of the parking headaches that come along with being located in one of the towers.”
The deal marks the first acquisition for Hourigan Development, which Marchetti, formerly of CBRE | Richmond, launched with Hourigan last fall. The company is housed in Hourigan Construction’s downtown offices at 411 E. Franklin St., just down the street from the Media General building.
Marchetti said the deal is the first of more to come for Hourigan Development.
“We’ve got a number of opportunities that we’re working on,” he said.