Rehabbed First National Bank building nets $39M

first national bank building

The First National Bank building at 823 E. Main St. sold after about 6 months on the market. (CBRE)

Marking the city’s largest apartment deal in recent memory, an out-of-town buyer has grabbed a redeveloped downtown bank building barely six months after it hit the market.

An entity tied to Washington, D.C.-based real estate firm Gates Hudson last week purchased the 154-unit First National Bank apartment building at 823 E. Main St. in Richmond’s central business district for $39.3 million, according to a deed recorded with the city.

It’s the largest apartment acquisition price in Richmond in at least five years, according to city property records.

The building has 18 floors of residences, a six-story parking garage and a three-story annex building with 37 apartments. It most recently was assessed by the city for $26.6 million.

The seller, Northern Virginia-based Rushmark Properties, was represented in the deal by CBRE | Richmond brokers Peyton Cox and Charles Wentworth. Robert Dean, Jonathan Greenberg, Yalda Ghamarian and Tom Leachman of CBRE’s Washington, D.C., office also worked the deal.

Rushmark purchased the property in 2000 for $9.5 million, investing $35 million to convert it into apartments. Renovations were completed in late 2012 with the help of historic tax credits.

The deal closed June 25. The property hit the market in January.

It’s Gates Hudson’s first investment in metro Richmond, Cox said.

Founded in 1980, Gates Hudson has developed, managed and acquired several apartment communities across the Washington, D.C., area.

While Gates Hudson could not be reached for comment Monday afternoon, Cox said the firm is developing a plan to lease up nearly 6,000 square feet of retail/office space on the building’s ground-floor level.

The First National Bank building was constructed in 1913, its classical revival-style structure rising as one of the city’s tallest buildings at the time. The apartment conversion made it one of the largest apartment complexes in the city’s central business district.

Upon its sale, First National boasted a 96 percent occupancy rate, according to a marketing brochure. Average rent is $1,500 per month. The property also includes a 268-space parking garage that netted more than $500,000 in revenue in 2017.

Gates Hudson joins a growing list of out-of-the market investors buying into the metro.

Northern Virginia-based Alexandria Heckman Properties last month purchased The Lofty apartments complex at 3618 and 3626 E. Broad St. for $6.6 million.

Utah-based Peak Capital Partners purchased the 157-unit Gallery Midtown complex at 308 N. Nansemond St. from Spy Rock Real Estate and Boston-based Davis Cos. for $25.1 million on June 5.

An entity tied to Dalian Development, a Washington, D.C.-based company with a track record for large residential and mixed-use projects in dense areas, purchased the Party Perfect building at 3210 W. Marshall St. for $3.8 million in May.

“Richmond is on investors’ radar … creating a competitive marketplace that is driving pricing,” Cox said. “We’re seeing a lot of new buyers for every property we market.”

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