The risk of rising sea levels and a generational leadership transition are pushing a Hampton Roads-based real estate firm further into the Richmond office market.
The Runnymede Corp. last month purchased a pair of office buildings in Innsbrook for $10.5 million.
It paid $6.2 million for 4400 Cox Road and $4.3 million for 5020 Sadler Place. Both buildings are leased to tech consulting firm Apex Systems and total 73,500 square feet.
The Cox Road building is where Apex subsidiary ASGN Inc. recently announced it is moving its headquarters to from California.
Runnymede is a 60-year-old, family-owned firm based in Virginia Beach, where most of its 1.2 million square feet of commercial holdings are located.
Gresh Wall, the company’s director of new business development, said Runnymede is in a transitional phase under a new generation of family leadership that’s looking to focus on the office market in lieu of the multifamily housing market, where it’s traditionally done most of its business.
“There’s been a passing of the baton to the next generation of family members,” Wall said. “The company, which has been long-term holders of properties, has made a concerted effort in the last few years to dispose of older, higher-maintenance properties and consolidate into a core category of office product.”
In January the company bought the Park Phase III office building at 4180 Innslake Drive for $2.2 million, and completed the most recent deals as part of a 1031 exchange after it sold one of its multifamily holdings.
The 43,000-square-foot Cox Road building most recently was assessed by the county at $5.5 million, and the 30,500-square-foot Sadler Place building was assessed at $4.3 million.
Wall said the firm also was motivated to get into the Richmond market due to its lack of flood risk, something the company faces in the Hampton Roads region.
“We’re being barraged down here with flooding, stormwater management issues and regulations to combat the tidal creep that we see over the long haul. It does make you kind of look back and say, ‘Do we need to spread our risk and reassess a little bit?’” Wall said.
“In this latest push, we had to diversify and get out into other regions that are less susceptible to flooding and spread the risk a little bit.”
Wall added they’re seeing higher rent growth in Richmond than in Hampton Roads. Although Runnymede does do some redevelopment, Wall said they’re not planning any for the Innsbrook properties.
“We do have a development team, but that’s only a piece of what we do. I’d define us more as a holding company and a management company with a little bit of development,” he said.
Wall said they’re looking for more properties around the Richmond market, as well as in Raleigh, Charlotte, Northeastern Florida and Nashville.