CoStar drops $20M on former SunTrust office building in Manchester

CoStar shelled out $20 million for this office building in Manchester. (Mike Platania photos)

CoStar has taken another big bite out of Richmond.

Last week the commercial real estate data giant bought the 117,000-square-foot former SunTrust Mortgage office building at 901 Semmes Ave. in Manchester for $20 million, city records show.

The five-story building will add to CoStar’s downtown office space as it continues to plan a nearly half-billion-dollar, 750,000-square-foot office complex just across the river on a 4-acre plot it bought at 600 Tredegar in 2020 for $20 million.

It also already occupies the former WestRock building at 501 S. 5th St., which it bought last year for $130 million.

A CoStar spokesperson said the company anticipates more than 400 of its 1,200 local employees will be based out of the Manchester office and that they plan to move in in the late summer.

The building was formerly part of SunTrust Mortgage’s Southside campus but has been vacant in recent years since SunTrust, now Truist Bank, moved its mortgage operations to its adjacent office at 1001 Semmes Ave. as well as to North Carolina.

Groundbreaking is set to occur this summer on the four-acre site where CoStar is planning a 26-story office tower.

Truist, still identified as SunTrust on the property record, continues to own and occupy the neighboring building.

CoStar’s purchase closed April 29, city records show. The seller was an entity tied to both Truist and the Richmond Redevelopment & Housing Authority. The RRHA has had a stake in the property dating back to the 1990s, when it worked with a SunTrust predecessor to develop the two-building campus.

The RRHA had a 38 percent stake in the property since 1996 and received $7.6 million through the sale. A spokeswoman for the RRHA said they haven’t yet finalized plans for how they’ll use the proceeds, “however, it is always our goal to serve as a catalyst for the creation of additional affordable housing.”

As for the future CoStar complex north of the river, the company is looking to break ground on its 26-story tower this summer. Construction is expected to take about two years.

Earlier this year, CoStar became embroiled in controversy following a series of Business Insider reports outlining an unpleasant work environment at the firm led by CEO Andy Florance. CoStar has denied the claims made in the reports.

CoStar shelled out $20 million for this office building in Manchester. (Mike Platania photos)

CoStar has taken another big bite out of Richmond.

Last week the commercial real estate data giant bought the 117,000-square-foot former SunTrust Mortgage office building at 901 Semmes Ave. in Manchester for $20 million, city records show.

The five-story building will add to CoStar’s downtown office space as it continues to plan a nearly half-billion-dollar, 750,000-square-foot office complex just across the river on a 4-acre plot it bought at 600 Tredegar in 2020 for $20 million.

It also already occupies the former WestRock building at 501 S. 5th St., which it bought last year for $130 million.

A CoStar spokesperson said the company anticipates more than 400 of its 1,200 local employees will be based out of the Manchester office and that they plan to move in in the late summer.

The building was formerly part of SunTrust Mortgage’s Southside campus but has been vacant in recent years since SunTrust, now Truist Bank, moved its mortgage operations to its adjacent office at 1001 Semmes Ave. as well as to North Carolina.

Groundbreaking is set to occur this summer on the four-acre site where CoStar is planning a 26-story office tower.

Truist, still identified as SunTrust on the property record, continues to own and occupy the neighboring building.

CoStar’s purchase closed April 29, city records show. The seller was an entity tied to both Truist and the Richmond Redevelopment & Housing Authority. The RRHA has had a stake in the property dating back to the 1990s, when it worked with a SunTrust predecessor to develop the two-building campus.

The RRHA had a 38 percent stake in the property since 1996 and received $7.6 million through the sale. A spokeswoman for the RRHA said they haven’t yet finalized plans for how they’ll use the proceeds, “however, it is always our goal to serve as a catalyst for the creation of additional affordable housing.”

As for the future CoStar complex north of the river, the company is looking to break ground on its 26-story tower this summer. Construction is expected to take about two years.

Earlier this year, CoStar became embroiled in controversy following a series of Business Insider reports outlining an unpleasant work environment at the firm led by CEO Andy Florance. CoStar has denied the claims made in the reports.

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Bruce Milam
Bruce Milam
1 month ago

This is another good booster shot for Manchester’s resurgence, adding to what The Current is bringing to Hull Street at the Mayo Bridge. I love the apartment boom and the emergence of for-sale housing west of Commerce Street, but the addition of daytime jobs brings a whole new element to the community.

Michael P Morgan-Dodson
Michael P Morgan-Dodson
1 month ago
Reply to  Bruce Milam

All the years as Fort Crestar and then SunTrust never created any boom from their daytime jobs? A few might wander out for lunch but all times I went I never saw an synergy or energy at except around 5pm when they all got in their cars and drove home. And PS RRHA issued bonds to help subsidize the deal to open the operation center for then Crestar and City Manager Robert Bobb. The housing authority was the financial catalyst because then, as now, the city did not have nor could it take on additional bond capacity. Happily this deal… Read more »

Garry Whelan
Garry Whelan
1 month ago

CoStar seem to be trying to buck the trend for hybrid and remote working and heavily investing in downtown office space. Given the more tech-focused and younger workforce are more used to remote working, can CoStar keep their growth and keep pulling people back into the office full time? I suppose we will see.

Clay McDonald
Clay McDonald
1 month ago
Reply to  Garry Whelan

They sure are. There has been much written about their push for on-site workers. While it is good to see investment in Richmond, they are simply out of touch with what technical workers are demanding. They will struggle to fill these buildings with the type of talent they need (software developers etc). Don’t take my word for it. Look at how many people left their organization last year alone. Costar requires 5 days on-site. It’s no surprise so many have left for more progressive companies.

https://talkingbiznews.com/they-talk-biz-news/inside-the-high-turnover-at-costar-group/

Eric Viking
Eric Viking
1 month ago

Richmond is very lucky to have a company like CoStar. Richmond needs another 5+ just like it!

Would have been nice for CoStar to invest that $20M into making their new tower taller! Imagine what an additional 117K sq ft would do!

Bruce Milam
Bruce Milam
1 month ago
Reply to  Eric Viking

They couldn’t add half that space as additional floors for $20M. They made a great purchase.

Darryll Hill
Darryll Hill
1 month ago

Wow with so much money being thrown around inside the city of Richmond on expensive real estate projects I wonder when officials are going to sit down and write actionable plan for affordable housing and actually carry through with that plan I mean truly affordable housing not 1 bedroom apartments for $1200 a month and stick the word affordable housing on the website… The RRHA just got a windfall of $7 million that money should be immediately invested into section 8 vouchers and other real affordable housing programs in the city not some property that will eventually end up in… Read more »

Ed Christina
Ed Christina
1 month ago
Reply to  Darryll Hill

Agreed

Nathaniel Walsh
Nathaniel Walsh
1 month ago
Reply to  Darryll Hill

Yes, the affordability crisis is a ticking time bomb waiting to explode. The average price for a one bedroom apartment in Richmond is now almost $1400 per month. In order to afford this, according to the 30% rule, you need to make more than $55,000 a year. How many kids just out of school are making that kind of money? And those that are are probably dragged down by car payments and student loan debt. I don’t claim to have the answers but I agree that there should be a lot more discussion around this issue.

Matt Faris
Matt Faris
1 month ago

How many “kids” just out of school ever afforded a new one-bedroom apartment? Not many. That’s why many get roommates and split costs. It has been that way at least since the ’70s.

Nathaniel Walsh
Nathaniel Walsh
1 month ago
Reply to  Matt Faris

I rented a one-bedroom in the Fan in 1991 for $350 a month, which was about the average. I was working a low paying retail job at Best Products. I moved out after 1994 because the landlord raised the rent by $9 a month. If you adjust for inflation, $350 back then would be about $689 today.

Ralph C Thompson
Ralph C Thompson
1 month ago
Reply to  Matt Faris

Not at the crazy prices all apartments are going for now

Matt Faris
Matt Faris
1 month ago

1 BR avg is $1,195. 2 BR is $1.460 ($730/per)

Source: https://www.zumper.com/rent-research/richmond-va