In its first deal in the Richmond market, a real estate firm with a name befitting the project has signed on for a major development at Innsbrook’s northern end with the closing of an eight-figure transaction.
Massachusetts-based Northland has purchased the bulk of the so-called North End site, a 34-acre assemblage that Highwoods Properties has positioned for a multiuse development at Nuckols Road and Interstate 295.
Northland bought 22 of those acres from Highwoods for $23.25 million, according to a deed filed with Henrico that was signed Aug. 31. Northland’s site was assessed at $5.32 million, according to the deed.
Northland’s portion of North End is approved for 600 apartments, 100 condos, 55,000 square feet of retail space and a 150-room hotel, the building for which would also house half of the condo units. The company said in a release it will start designing and master planning the development this year.
Adding to the project is 315,000 square feet of Class A office space that Highwoods plans to develop on the remaining 12 acres it still owns. That land includes the site of the former Innsbrook After Hours concert venue, where Highwoods is planning new buildings that would total about 200,000 square feet.
Highwoods also is planning a third North Shore Commons building that would total 100,000 square feet, Senior Vice President Jane DuFrane said.
The full 34 acres were rezoned last fall, months after Highwoods announced its vision for the project. DuFrane said Northland shares that vision and was connected with Highwoods about a year ago by Lucas Thornton, a developer out of Roanoke who DuFrane said is familiar with Innsbrook and the North End project.
Of Northland, DuFrane said, “They have a very similar value set to Highwoods; they’re similarly sized to Highwoods. They have a long-term hold philosophy, so they’re not a merchant builder. They won’t be selling the property the moment they build it.”
She added, “We met with them a long time ago, and I’m ecstatic that they made it through the process and we ended up going down the aisle together as partners.”
Northland’s release included comments from Associate VP of Development Santo Dettore, who said the company is “thrilled to establish Northland’s entrance into the Richmond market with such a transformative, landmark project.”
He said metro Richmond has been a target market for Northland. A spokesperson on Thursday said Dettore declined further comment.
Founded in 1970, Northland focuses on multifamily and mixed-use developments that it manages and owns long-term. According to the release, it has $8 billion of assets under management with $3 billion in development. The company was acquired in 1997 by Essex Partners.
Northland’s portfolio includes 26,000 residential units and 2.1 million square feet of commercial space with concentrations in Boston, the Southeast and Austin, Texas. It also has properties in Arizona, Colorado, Nevada and New Mexico. It’s closest assets to Virginia are two properties in Charlotte, North Carolina.
Northland’s 22-acre site is made up of all or parts of seven parcels, including the 10-acre Elks Lodge property that Highwoods purchased in 2020 to complete the assemblage. Also involved are parts of 4820, 4951 and 4991 Lake Brook Drive, which house three office buildings including the two existing North Shore Commons buildings.
The new development would be built around those buildings, as well as the existing Highwoods V building that likewise fronts the adjacent Lake Rooty. The development would not involve the nearby Exxon gas station and café.
DuFrane said Highwoods would start work on the new office buildings once preleases are signed for primary tenants. She said the buildings would not be built on spec, and that coordination with Northland’s development is the goal.
“The plan is to do it in conjunction as long as we have a lead customer,” she said. “As soon as we land a prelease, then we will begin the office development.”
Buildout for the overall development is projected at 10 to 15 years.
Highwoods was represented in its negotiations with Northland by Eric Robison of Thalhimer’s Capital Markets Group, along with David Baird and Michael Denise out of Cushman & Wakefield’s Baltimore office.
The transaction comes as other developments are underway in Innsbrook, including Silver Hills at Innsbrook, a 234-unit apartment complex catty corner across Nuckols from the North End site. Highwoods, Innsbrook’s biggest landlord and one of its biggest landholders, was part of the group that sold that plot to Ohio-based Silver Hills Development.