Investor’s office park gamble continues to pay off after deal with Henrico school system

marwahaofficepark

Marwaha Business Park, formerly known as Parham Place. Henrico County Public Schools is leasing the entire Marwaha 2 building, shown at right. (BizSense file)

Gagan Marwaha’s bet on the former Parham Place office park that now bears his name continues to pay off, as the local real estate investor has signed Henrico County Public Schools to his list of tenants at the nearly full complex.

HCPS is taking the entire Marwaha 2 building on the east side of the now-named Marwaha Business Park.

The Henrico School Board this month approved a roughly 10-year lease for the nearly 29,000-square-foot building at 1910 E. Parham Road, where staff with the school system’s departments of transportation, workforce and career development, school safety, and school nutrition services will relocate by December, said Eileen Cox, HCPS’s communications chief.

The school system is relocating those departments from a rented building at 3751 Nine Mile Road, near HCPS’s central office at the county’s Eastern Government Center. That lease is set to expire in December.

Eileen Cox

Eileen Cox

Noting its offices are spread between the central office, the Nine Mile Road building and the school system’s Fairfield Annex at 1001 N. Laburnum Ave., Cox said, “We are quickly finding, with emerging technology needs and working in a 21st-century work environment, it’s not set up quite the same way from when the building was built.”

With some central office staff also moving, Cox said, “Having to make some adjustments for comfort spaces and office spaces, we felt like this was an opportunity to move a few of the folks from the main building here into a satellite location, so we looked for something that was big enough for all of them.”

The lease is a big win for Marwaha, who in January bought the three-building office park that had been vacant since anchor tenant EAB moved to a new office near Innsbrook.

After closing on the $5.3 million deal for the 10-acre complex with 89,000 square feet of leasable office space, Marwaha quickly leased another building, Marwaha 1, to mechanical and electrical contractor ColonialWebb, which moved its local office hub to the 35,000-square-foot building on a 10-year lease.

Marwaha ColonialWebb

ColonialWebb fills the Marwaha 1 building. (Jonathan Spiers photos)

He also moved his firm, Marwaha Investments, to Marwaha 3, taking 4,500 square feet in what’s planned to be a multi-tenant building.

With about 21,000 square feet remaining to be leased, Marwaha said the park is 75 percent leased up – less than a year after he bought it. He’s been working with Commonwealth Commercial’s Tucker Dowdy and Michael Good, who represented him in the purchase and are handling leasing for the park.

Gagan Marwaha

Gagan Marwaha

“We’ve been very aggressive in making deals and in reaching out to people,” Marwaha said. “Basically, I am giving credible tenants who did not have access to buildings like this, because of the previous ownership who only wanted to deal with one single tenant – I am coming in and giving these tenants access to Class A properties and multi-tenanting it or subdividing it.

“I’m giving something to the market, and I have other deals pending in the pipeline,” he said. “I have around $20 million of more office space in the pipeline that we are going to be looking at.”

Marwaha said he’s putting just over $1 million into upfitting the building for HCPS. He did not want to disclose terms of the lease, but the School Board’s approval involved public documents that show the rent starting at $36,000 a month and increasing annually before reaching nearly $47,000 a month the final year.

The building is about a mile east from Henrico’s Western Government Center, which Cox described as beneficial.

“It’s not uncommon for our staff to be working in different parts of the county, so it makes sense to have locations spread out,” she said. “That’s the beauty of Henrico, that in the school division, you have the opportunity to be from one end of the county to the other on any given day, and often our work is being done in tandem with our partners in the county government, so having offices near them is also a benefit.”

Marwaha HCPS

HCPS plans to fill the Marwaha 2 building by December.

Marwaha described the addition of HCPS as a boon to the business park, where he expects the remaining space to be filled by two more tenants. He said he’s put $500,000 into the complex overall in terms of enhancements to common areas and curb-appeal improvements.

Of HCPS, Marwaha said, “I am very excited about this lease. And I’m excited for the future.”

Turning his company’s focus and “value-add” approach away from single-family homes and more toward commercial, industrial and multifamily investments, Marwaha said he’s listed part of his single-family portfolio in Henrico and Chesterfield for sale with One South Realty Group. He said his main focus these days is on Class A office space that can be used by multiple tenants.

“Right now, we are really focusing on Class A discounted offices,” he said. “We want to subdivide it and give access to the tenants that never had access to such properties because they were owned by billion-dollar REITs or institutions who are only focused on single-tenant occupancy. That’s the quality of assets we want to buy.”

His company recently closed on a $17 million deal for four properties in Petersburg that total 171 apartments: the Lofts on Market at 9. S. Market St., Union Pen at 15 N. Union St., South Street Lofts at 803 Hinton St., and Dunlop Street Lofts at 214 Dunlop St. One South’s Tom Rosman represented him in the deal.

Marwaha Petersburg

The four properties in Petersburg that Marwaha recently picked up in a $17 million deal. (One South flyer)

Those add to Marwaha’s other holdings in Petersburg, including the seven-story former bank building at 30 Franklin St. and the Cameron Lofts building at 325 Brown St. He’s filled the third floor of the 30 Franklin St. building with another public-sector tenant: the City of Petersburg’s economic development department.

Back in Henrico, he said he’s working with county planners on options to develop a stretch of properties he’s assembled along Brook Road, including his company’s former office at 7520 Brook Road. He’s previously envisioned a multi-tenant office and retail development there and said other options could include a retail strip or shopping center.

As for what’s next, Marwaha said he’s on the lookout for more deals.

“It could be industrial tomorrow; it could be flex-use tomorrow. To me it doesn’t matter what the asset class is. If I can add value, I’m putting money into it,” he said.

marwahaofficepark

Marwaha Business Park, formerly known as Parham Place. Henrico County Public Schools is leasing the entire Marwaha 2 building, shown at right. (BizSense file)

Gagan Marwaha’s bet on the former Parham Place office park that now bears his name continues to pay off, as the local real estate investor has signed Henrico County Public Schools to his list of tenants at the nearly full complex.

HCPS is taking the entire Marwaha 2 building on the east side of the now-named Marwaha Business Park.

The Henrico School Board this month approved a roughly 10-year lease for the nearly 29,000-square-foot building at 1910 E. Parham Road, where staff with the school system’s departments of transportation, workforce and career development, school safety, and school nutrition services will relocate by December, said Eileen Cox, HCPS’s communications chief.

The school system is relocating those departments from a rented building at 3751 Nine Mile Road, near HCPS’s central office at the county’s Eastern Government Center. That lease is set to expire in December.

Eileen Cox

Eileen Cox

Noting its offices are spread between the central office, the Nine Mile Road building and the school system’s Fairfield Annex at 1001 N. Laburnum Ave., Cox said, “We are quickly finding, with emerging technology needs and working in a 21st-century work environment, it’s not set up quite the same way from when the building was built.”

With some central office staff also moving, Cox said, “Having to make some adjustments for comfort spaces and office spaces, we felt like this was an opportunity to move a few of the folks from the main building here into a satellite location, so we looked for something that was big enough for all of them.”

The lease is a big win for Marwaha, who in January bought the three-building office park that had been vacant since anchor tenant EAB moved to a new office near Innsbrook.

After closing on the $5.3 million deal for the 10-acre complex with 89,000 square feet of leasable office space, Marwaha quickly leased another building, Marwaha 1, to mechanical and electrical contractor ColonialWebb, which moved its local office hub to the 35,000-square-foot building on a 10-year lease.

Marwaha ColonialWebb

ColonialWebb fills the Marwaha 1 building. (Jonathan Spiers photos)

He also moved his firm, Marwaha Investments, to Marwaha 3, taking 4,500 square feet in what’s planned to be a multi-tenant building.

With about 21,000 square feet remaining to be leased, Marwaha said the park is 75 percent leased up – less than a year after he bought it. He’s been working with Commonwealth Commercial’s Tucker Dowdy and Michael Good, who represented him in the purchase and are handling leasing for the park.

Gagan Marwaha

Gagan Marwaha

“We’ve been very aggressive in making deals and in reaching out to people,” Marwaha said. “Basically, I am giving credible tenants who did not have access to buildings like this, because of the previous ownership who only wanted to deal with one single tenant – I am coming in and giving these tenants access to Class A properties and multi-tenanting it or subdividing it.

“I’m giving something to the market, and I have other deals pending in the pipeline,” he said. “I have around $20 million of more office space in the pipeline that we are going to be looking at.”

Marwaha said he’s putting just over $1 million into upfitting the building for HCPS. He did not want to disclose terms of the lease, but the School Board’s approval involved public documents that show the rent starting at $36,000 a month and increasing annually before reaching nearly $47,000 a month the final year.

The building is about a mile east from Henrico’s Western Government Center, which Cox described as beneficial.

“It’s not uncommon for our staff to be working in different parts of the county, so it makes sense to have locations spread out,” she said. “That’s the beauty of Henrico, that in the school division, you have the opportunity to be from one end of the county to the other on any given day, and often our work is being done in tandem with our partners in the county government, so having offices near them is also a benefit.”

Marwaha HCPS

HCPS plans to fill the Marwaha 2 building by December.

Marwaha described the addition of HCPS as a boon to the business park, where he expects the remaining space to be filled by two more tenants. He said he’s put $500,000 into the complex overall in terms of enhancements to common areas and curb-appeal improvements.

Of HCPS, Marwaha said, “I am very excited about this lease. And I’m excited for the future.”

Turning his company’s focus and “value-add” approach away from single-family homes and more toward commercial, industrial and multifamily investments, Marwaha said he’s listed part of his single-family portfolio in Henrico and Chesterfield for sale with One South Realty Group. He said his main focus these days is on Class A office space that can be used by multiple tenants.

“Right now, we are really focusing on Class A discounted offices,” he said. “We want to subdivide it and give access to the tenants that never had access to such properties because they were owned by billion-dollar REITs or institutions who are only focused on single-tenant occupancy. That’s the quality of assets we want to buy.”

His company recently closed on a $17 million deal for four properties in Petersburg that total 171 apartments: the Lofts on Market at 9. S. Market St., Union Pen at 15 N. Union St., South Street Lofts at 803 Hinton St., and Dunlop Street Lofts at 214 Dunlop St. One South’s Tom Rosman represented him in the deal.

Marwaha Petersburg

The four properties in Petersburg that Marwaha recently picked up in a $17 million deal. (One South flyer)

Those add to Marwaha’s other holdings in Petersburg, including the seven-story former bank building at 30 Franklin St. and the Cameron Lofts building at 325 Brown St. He’s filled the third floor of the 30 Franklin St. building with another public-sector tenant: the City of Petersburg’s economic development department.

Back in Henrico, he said he’s working with county planners on options to develop a stretch of properties he’s assembled along Brook Road, including his company’s former office at 7520 Brook Road. He’s previously envisioned a multi-tenant office and retail development there and said other options could include a retail strip or shopping center.

As for what’s next, Marwaha said he’s on the lookout for more deals.

“It could be industrial tomorrow; it could be flex-use tomorrow. To me it doesn’t matter what the asset class is. If I can add value, I’m putting money into it,” he said.

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Victoria Woodhull
Victoria Woodhull
10 months ago

Good for Marwaha, but bad for the taxpayer….
People complain that teachers need raises – which I agree – but if you give the school system a dollar, the teacher gets PENNIES, and most of the taxpayer monies goes for the administration to grow. Did Eileen Cox say that there are currently 3 administrative HCPS location, and this office space will be the 4th?
Stop growing the administrative state, and give the money to the teachers!

Last edited 10 months ago by Victoria Woodhull
David Humphrey
David Humphrey
10 months ago

Read the article. This will replace an existing location so there will still be three. While I do agree some school administrations could be reduced there still has to be people that do things system wide such as transportation and other logistics. Teachers need support to be able to best do what they do. That way teachers don’t have to worry about the behind the scene logistics.

Bruce Milam
Bruce Milam
10 months ago

There’s a lot of truth to this even if it’s getting down votes. I’m betting that school administration is more than 50% of the school budgets.

Justin Reynolds
Justin Reynolds
10 months ago

One reason our city and county schools are so bloated administratively is because of how inefficient our local government structure is. Chesterfield, Henrico, and Richmond city all have their own staff instead of us acting like a real region that has just one central government. The Dillon rule really hurts us. I know a merger will never happen, but our structure really burdens all localities with extra costs and bureaucracy. Just look at how geographically spread out Henrico is—it’s almost two separate counties if you consider how narrow it is between Richmond and Hanover near Richmond Raceway.

David Humphrey
David Humphrey
10 months ago

It’s not really the Dillon rule that affects this but is a long line of decisions by the state government including the creation of independent cities. Then the moratorium on annexation really threw a wrench in the works. The Dillon rule doesn’t allow localities to do what the state doesn’t specifically say they versus in other states where localities can do something unless the state says they can’t. In my opinion, Dillon Rule does not allow for as much creativity and flexibility in solving problems because localities can only use the tool box given them by the state. If they… Read more »

Justin Dooley
Justin Dooley
10 months ago

Very much agree with Victoria’s comments, we the citizens have too much “administration” in every sector. While clearly some oversight and support is needed in education, it should be at the local level. Federal and state departments of education are worthless and should be abolished. When we are stuck with these large bloated government entities such as these, whose only purpose is to create and enforce rules and regulations, the entire system is commoditized such that there is no innovation, creativity, or personalization of instruction. Teach to the test, check the box, fill out the report, repeat. I’m certainly not… Read more »

Victoria Woodhull
Victoria Woodhull
10 months ago
Reply to  Justin Dooley

Amen! Preach!

Bruce Milam
Bruce Milam
10 months ago

The Richmond community, especially the real estate community, has become increasingly “international”. (I say that in quotes to mean in surname only; the people involved are American citizens.). It’s once again a testament to US immigration and our land as a melting pot of new people hungry for opportunity. Here is the case of a man who recognizes opportunity and jumps at the risk-reward for seeing something others failed to see. I’m just pleased to see that the world’s experiment of a capitalist democracy is so successful for those who study hard, work hard, and take risks. It still works… Read more »

Ward Currin
Ward Currin
10 months ago

Congrats, Gagan on the outstanding project. You are doing great things for the local area(s) and doing it the right way. I look forward to more articles reporting on your success.