An Innsbrook-based real estate firm stayed local for its latest acquisition, striking a deal with one of the biggest players in the Petersburg redevelopment scene.
Capital Square 1031 last week paid $21.5 million for the 223-unit Mayton Transfer Lofts at 250 E. Bank St. in downtown Petersburg.
The seller was a group made up of Waukeshaw Development, a company run by Dave McCormack, along with Axis Development’s Tony Collins. They began redeveloping the building a decade ago.
The three-building complex and its 3 acres were most recently assessed by the city for about $5.2 million.
It’s the highest-priced sale of a commercial property in 2018 in Petersburg, according to city records, and Capital Square’s first acquisition in the city.
Tom Rosman and Ryan Rilee with One South Commercial represented the seller.
Constructed in sections beginning in 1911, the complex first served as a distribution and warehousing operation for the nearby railroad as a key point of entry for goods sold in the Petersburg area.
The property had several owners up until the 1930s, when it was purchased by T.W. Mayton, the area’s most prominent business figure at that time. His family operated from the buildings for more than 70 years, McCormack said.
Waukeshaw and Axis purchased the property from the Mayton family in 2003. Using historic tax credits, the two firms co-developed the four-story buildings into market-rate loft apartments in phases, completing the initial launch of 43 units in 2008. They completed the $26 million in 2012. It was 97 percent occupied at the time of the sale.
Waukeshaw has been a pivotal player in the revitalization of the city’s Old Towne, rehabbing several derelict properties into viable businesses that include Trapezium Brewing Co. at 423 Third St. and Demolition Coffee at 215 E. Bank St.
Looking to tap into the local demand for malted barley, the development firm also plans to open Big Trouble Malting and Spirits in 14,000 square feet of an old muffler shop across the street from its Bank Street coffee shop this fall.
The firm also has several renovation and conversion projects in various stages of work across south, central and western Virginia and North Carolina.
“When I first came here, this section of Petersburg, from Sycamore Street east to Interstate 95 was a ghost town,” McCormack said. “Back then, Petersburg was not a place to invest. Several market studies said the area had no market value.”
McCormack admits he often got stares when he talked about his real estate ventures in Petersburg, but knew eventually the area would capture the attention of investors.
“It took some time,” he said. “But I feel like things are starting to move in the city’s favor, and that’s good for the entire region.”
Rosman, who also has invested in the Petersburg area, agrees, adding that the $21 million sales price could be a turning point for sellers with well-maintained assets in the city.
“This sale shows a large amount of confidence in Petersburg,” Rosman said. “To have someone like (Capital Square) see the value in this asset is remarkable for this city.”
Run by Louis Rogers, Capital Square purchases commercial real estate and then sells shares of ownership in each property to pools of investors looking to cash in on so-called 1031 exchanges.
The company owns nearly 70 properties across the United States, the bulk of which are outside of the Richmond region. Its other local holdings include Perry Place apartments in Manchester.
Capital Square this month garnered private-equity funding to help it close a pipeline of deals that Rogers said totaled $100 million.
Rogers could not be reached by press time for comment on the Petersburg deal.