With a new name and a shift in its strategy, a local real estate investment firm and one of Innsbrook’s biggest landlords is unloading the bulk of its office holdings there as it turns its focus toward industrial and multifamily properties.
Lingerfelt CommonWealth Partners, which is rebranding to simply Lingerfelt, has sold an 11-building portfolio to an affiliate of Seminole Trail Management, a Charlottesville-based firm with a focus on apartments, in a deal totaling just under $119 million.
The portfolio includes nine of the 16 buildings that Lingerfelt had owned in the Innsbrook area, including the five properties it had rezoned last year to allow for infill apartment developments.
While the company had planned to go forward with those projects when market conditions were right, President Ryan Lingerfelt said publicity from the rezonings led Seminole Trail and others to approach the company about a sale.
Lingerfelt said Seminole Trail’s offer was one of a handful that included the full 11-building portfolio, which he said is lumped together as a joint venture with a single investor. Most of the other offers focused on the rezoned properties.
“We have owned them with this partner for almost 10 years now. The investment plan all along was to own them, improve the value of them and then ultimately move on from the joint venture,” said Lingerfelt, describing Seminole Trail’s offer as too good to pass up.
Of the apartment projects, which are approved for nearly 1,400 units, he added, “The hope all along was to find a way to move in a new partner and develop the multifamily ourselves. But it turned out that we received this unsolicited offer that was very compelling for our investors and we needed to accept it.”
The 11 buildings total 723,000 square feet of office space and the sales price represents a 6.3 percent cap rate, or approximately $165 per square foot. The properties house more than 100 office tenants and were 82 percent leased at closing, the company said.
Lingerfelt bought the 11 buildings as part of a 14-building, $135 million portfolio deal in 2013 from Richmond Green Properties LLC. It subsequently sold the three other buildings – 200 Westgate Parkway in 2014, 10800 Nuckols Road in 2018 and 3829 Gaskins Road in 2020 – for a total of $48.1 million, bringing the company’s total divestitures along with the sale of these 11 buildings to approximately $167 million.
The latest 11 buildings include Lingerfelt’s headquarters at 4198 Cox Road, which is one of the five properties planned for apartments along with the Innsbrook Commons building at 4121 Cox Road, the lakefront Rowe Plaza building at 4510 Cox, Liberty Plaza I at 4801 Cox, and another lakefront building at 4880 Cox on the north side of Nuckols Road.
Also included are the Technology Pointe buildings at 5000 and 5500 Cox Road, also north of Nuckols; and the Westerre III and IV buildings at 3900 and 3901 Westerre Parkway, which are south of Broad Street from Innsbrook proper but included in Henrico’s Innsbrook overlay district.
Rounding out the portfolio beyond the Innsbrook area are the Westgate II building at 200 Westgate Parkway, south of Short Pump Town Center; and 7130 Glen Forest Drive, in the Glen Forest Office Park near Reynolds Crossing.
The 11-building portfolio was assessed by the county this year at $84.2 million collectively.
Seminole Trail intends to develop the five apartment projects “in due course,” Lingerfelt said. The company, led by Richard Hewitt and Tim Slagle, manages over 6,650 apartment units in Charlottesville and across Virginia, according to its website.
Locally, the company’s commercial portfolio includes the Gold’s Gym Plaza at 8900 W. Broad St., which it bought this spring for $13 million. It bought the Innsbrook portfolio through an entity called Innsbrook LLC.
Attempts to reach Seminole Trail for comment were unsuccessful Monday. A call and email to Slagle were not returned.
Change in course
The portfolio sale marks a shift in strategy for Lingerfelt, which in 2020, in a reflection of the pandemic’s effects, started turning its focus away from office and more toward industrial and multifamily residential investment and development.
“Those two asset classes have huge structural tailwinds supporting them,” Lingerfelt said. “COVID has put a little bit of a cloud on office for the moment, and so we shifted and followed the opportunities into a different asset class.”
That same year, the company sold its majority stake in the seven-building Center Park and Technology Park office complexes off Cox Road for a total of $23.6 million, having bought them in 2014 for $19.8 million. Earlier this year, it sold a 37,000-square-foot medical office building at Forest Office Park for $15 million, after buying it in 2004 for $3.1 million.
Today, the company said it has over $775 million worth of industrial and apartment projects under construction or in the pipeline in the region, with several set to break ground next year.
It’s currently building nearly 1 million square feet of industrial space in Chesterfield, including a 242,000-square-foot building at 801 Port Walthall Drive, its 526,000-square-foot Ashton Logistics Center nearby, and a 188,000-square-foot building at 1701 Bermuda Hundred Drive.
It’s breaking ground next year on more industrial projects, including its 174,000-square-foot Ashton Creek Distribution Center in Chesterfield and a 325,000-square-foot building at Carmel Church Business Park in Caroline County. The company said it’s also under contract to purchase land for 2.5 million square feet of additional industrial facilities in Henrico and Prince George County, with those developments anticipated in 2024.
On the multifamily side, Lingerfelt closed last week on a $5 million land deal for Silas, a 390-unit apartment development adjacent to Brightpoint Community College in Chester. That project is set to break ground next year.
Still in Innsbrook
While it’s changing its focus, the company isn’t abandoning Innsbrook, said Lingerfelt, whose family has had a hand in the park’s development and management since the late 1980s.
In addition to the seven other buildings it’s keeping in the park, the company remains an investor and operator of the park’s Richmond Marriott Short Pump hotel and is represented on Innsbrook’s Owners Association Board of Directors and architectural review board, with Managing Director Brian Witthoefft sitting on those boards.
The company’s remaining Innsbrook properties include the Center Park I-V buildings, in the 4300 and 4400 blocks of Cox Road, and Technology Park I and II at 4949 and 4953-4965 Cox Road. It also owns Gaskins Center II at 3829 Gaskins Road, just outside the Innsbrook overlay district.
“We continue to be big believers in Innsbrook and the next generation of Innsbrook,” Lingerfelt said, referring to the park’s ongoing transformation under the county’s urban mixed-use zoning district.
“We think it’s the right thing to do,” Lingerfelt said of the influx of residential development in Innsbrook. “We think over the next 20-25 years it’s going to really become the place to be in Henrico.”
One of Innsbrook’s original developers, the Lingerfelt family got started in the park in the late ‘80s, when Ryan’s father, Al Lingerfelt, was invited by Innsbrook developer Sidney Gunst to get involved with his company, Lingerfelt Development Corp., which he later sold.
The latest iteration, which Ryan launched in 2002, is part of a family business spanning three generations, starting in the late 1950s with his grandfather, Luther Harold “L.H.” Lingerfelt. Al came out of retirement and joined Ryan’s company in 2007 as chairman and CEO. Ryan leads operations as president and chief investment officer.
Lingerfelt has since built, acquired and managed over 25 million square feet of commercial real estate valued at approximately $3 billion across the Mid-Atlantic and Southeast, according to the company. Ryan said its annual deal volume averages $200 million.
For Ryan, the shift in strategy and rebranding is but the latest chapter in the family business.
“We’re going to continue to do what we’ve always done: invest in good real estate projects throughout the Mid-Atlantic and Southeast and continue to try to create value for our investors over the long term,” he said.
Correction: Lingerfelt bought the 11 buildings as part of a 14-building portfolio purchase in 2013 for $135 million and subsequently sold the three other buildings for a total of $48.1 million, bringing the company’s total divestitures including the sale of these 11 buildings to approximately $167 million. An earlier version of this story did not reflect the three additional properties and sales.