By Celeste M. Smucker –
Commercial real estate in Charlottesville and the Valley (including shops, office buildings, apartment complexes, manufacturing plants, subdivisions and warehouses) continues its impressive growth with more of the same predicted for 2019.
And so long as families continue to visit and move here for the natural beauty, outdoor activities, job opportunities, and mild climate (but with four seasons), agents are optimistic this trend will continue.
The positive forecast is consistent with a recent survey by the Deloitte Center for Financial Services that foresees a bright outlook for commercial real estate worldwide in 2019, and predicts that investment in this market will “continue to rise on the back of steady economic and employment growth in key global markets.”
Widespread commercial growth also relies on consumer confidence, a strong economy and historically low interest rates said Peter Wray, Broker at Triangle REALTORS® in Staunton.
And these same factors support an active residential market, another critical driver of commercial growth that remains strong throughout our area.
Agents Report Robust Market
It’s a “great market,” says Robin Amato with Real Estate III Commercial Properties, who is having one of her best years ever. She adds that all geographic areas are doing well.
The market is “really solid,” observes Lisa Jones, President of Pavilion Properties. She is happy to see new tenants signing leases at Peter Jefferson Place, her company’s Pantops-area development featuring Class A office space. The newcomers join an impressive list of existing tenants, many of whom are renewing or expanding their leases.
One example is The Nature Conservancy, an international environmental organization recently relocated from their familiar spot north of town to their brand new Pantops office. They appreciate their new space, which is much more efficient for them, Jones said.
“Overall the market is still good,” says Benton Downer, Owner and Principal Broker at Downer and Associates. He has noticed “a pause” in leasing activity due to interest rate jumps, but says the investor side of the market continues to boom.
The market is doing “real well,” says Bill Howard with Real Estate III Commercial Properties. He recounts the ” amazing number of calls,” his office receives these days with inquiries about all manner of property from close-in to as far away as Zion Crossroads and Greene County.
Mike Pugh with Old Dominion Realty in Harrisonburg calls the Valley market “robust, and very active.” So active, in fact, that many contractors, especially those required for large infrastructure development, are booked through next summer, he says.
An active part of the commercial market is investors looking for already leased properties. These could include shopping centers, apartments, office buildings, single tenant retail stores, mini-storage places, or gas stations.
Investors range from single individuals (who may be searching for alternatives to the stock market in order to diversify) to larger entities such as REITs (Real Estate Investment Trusts).
This particular market is “extremely strong,” Wray says. He has “lots of investors calling,” adding there is plenty of competition, especially for prime properties.
A related trend is business owners purchasing or building their own space after leasing for a time. Continuing low interest rates are a big reason, Amato says. With sufficient cash to put down, they can often enjoy mortgage payments that are less than the monthly cost of their lease.
Charlottesville’s Cavalier Produce, recently relocated to Zion Crossroads, is just one example. When they moved into their newly built space, they left behind their close-in Carlton Avenue location where they had operated for years.
Part of their former space is now leased to the Champion Brewing Company, reports Eddie Karoliussen, Broker with Four Corners Real Estate Solutions, LLC. He adds that Found. Market Co. where visitors can enjoy coffee, gourmet food, bakery items and gifts, is now also located in the same center.
Outlying Areas Popular
The strong commercial market is not confined to just a few parts of town. Sara Schroeder with Hasbrouck Real Estate Corp. explained that in recent years some areas, especially downtown Charlottesville, were very busy. Now, she says, we are seeing activity that is more widespread.
Wray agrees stating: “In general, even with interest rates rising, the commercial market continues to be active and strong throughout Charlottesville, Waynesboro, Staunton and beyond.”
Take Zion Crossroads, for example. Trey Durham with Keller Williams Alliance cites the growing commercial market as an important contributor to the local lifestyle. Home buyers living in communities such as Lake Monticello, Spring Creek, Villages of Nahor, and others plus surrounding rural areas all benefit from this expansion.
Both Martha Jefferson and UVA have satellite offices in the area, Durham said, and residents can also shop at Walmart or Lowe’s, and choose from a growing number of restaurants.
In addition, public water and sewer is coming to Zion Crossroads, and that will only accelerate commercial growth, he says.
John O’Reilly, with BHG Real Estate – Basecamp, is also enthusiastic about the area’s commercial activity saying, “it is coming into its own.”
Greene and Madison
Both Greene and Madison Counties now enjoy active commercial markets. This is due in part to the low inventory of homes and rising prices in Charlottesville and Albemarle that send homebuyers further out to shop.
One result is the impressive number of calls coming into Roy Wheeler Realty Co.’s Greene area office inquiring about retail and industrial space, says Matthew Woodson, Managing Broker—”more than in the previous five years,” he stated.
He explained that when businesses like these locate in Greene County there is “real added value” for residents making it more convenient to live, work and shop there. He sees commercial expansion continuing stating: “the best days are ahead of us.”
Bill Gentry, Broker and Owner of Jefferson Land and Realty is also pleased with expanding commercial activity in both Greene and Madison.
In Greene County, Chuck’s Auto Center plans to build on 29 North near Lake Saponi. Having lost their lease, they are working through the zoning and site plan process and expect to be up and running by early 2019, Gentry said. Further north, O’Reilly’s Auto Store has filed a site plan and intends to build their new location in Cornerstone Square near Family Dollar.
If you love looking for thrift store bargains, head out to Another Time Around in Stanardsville in its new location near Great Value, Gentry said, observing that the shopping center there is now fully leased.
Thrift shoppers en route to Greene County will also be able to find bargains at the soon-to-be-open Goodwill store north of town in what was formerly Gander Mountain. “Goodwill has done extremely well in Charlottesville,” Wray says and will be consolidating two other stores into this new 25 thousand square foot facility.
Closer in, Pantops is a hot spot for both residential and commercial growth. Martha Jefferson Hospital, nearness to Downtown, and plenty of free parking are big draws. Easy access to the Interstate plays a role as does ACAC’s new Pantops location on Martha Jefferson Drive.
Employees at Peter Jefferson Place who prefer to walk or run can take advantage of the nearby outdoor jogging paths and the showers available at their office, Jones said.
While many of Jones’ tenants have businesses that are health related, her clients also include financial firms such as Bank of America/Merrill Lynch and residential mortgage companies. Others include tech companies, attorneys and non-profits.
People who love Pantops amenities, but don’t want to buy a home just yet will be happy to learn about the apartments to be built in Peter Jefferson Place, Jones said. Alternatively they can rent one of the luxury apartments going in above the shops at Riverside Village on the other side of Richmond Road.
The new North Pantops Professional Center on Olympia Circle, the first of three buildings planned for that site, will be ready for occupancy by mid-2019 says Steve Melton, Broker with Virginia Land Company.
Response to ads about the new space has been good, Melton said and he is working with several likely tenants.
Virginia Land’s other Pantops locations are also popular with space recently leased to UVA, Shenandoah Fine Arts and an attorney who walked in and decided on the spot to relocate from Downtown.
Closer to Town
Areas closer in are also busy from the Downtown Mall to mixed-use developments on Preston Avenue, McIntire Plaza and elsewhere.
The IX Project is another active spot. Property Manager, Erin Hill described new tenants located there including the North American Sake Brewery (Virginia’s “first and only”) featuring flavor infused varieties such as black cherry, black currant, blackberry and blood orange. While sipping their favorite sake, enthusiasts can also sample Japanese inspired American cuisine.
Sake is brewed onsite and free facility tours are available at 5:30, 6:30 and 7:30 p.m. every Tuesday. Visitors also look forward to happy hour Monday through Friday from 4:00 to 6:00 p.m.
IX also welcomes Little Planet, which offers drop-off child care for parents working out, shopping or enjoying the food and drink available there. Parents must be onsite to use this service featuring what Hill calls “organic, wholesome child care” that will soon include time in a yurt.
In another popular spot, local residents appreciate the retail stores, restaurants, theater and service providers at 5th Street Station.
For example, iFixt offers walk-in, fix-it services for smartphones, tablets, laptops, and other mobile devices. While awaiting their repairs, shoppers can take care of banking, visit their doctor at Sentara Family Medicine, get a haircut, or consult their favorite physical therapist at Select Medical.
And very soon Starbucks with its drive-through window will open in a center adjacent to 5th Street Station for anyone wanting caffeine or a pleasant place to hang out. Additional office and retail space will be available in the three buildings planned for that same site, Wray says.
Retail is hot in the Valley.
Wray cited the Frontier Center in Staunton where shoppers at the Aldi grocery chain can select from Bojangles’, Chick-fil-A and McDonald’s at lunchtime.
At nearby Staunton Crossing, out of town visitors can choose from one of 200 hotel rooms at the Marriott or Tru by Hilton Hotels that both just opened.
And if your destination is Harrisonburg try the recently opened Madison Hotel near James Madison University, Pugh suggests.
Myers Corner, a mixed-use development on Route 250 in Fishersville is “developing strongly,” Wray says and will soon include a new assisted living facility and professional offices.
Warehouse space, which is in very short supply in the Charlottesville area, is more plentiful in the Valley, Pugh observes. However, he adds that even there, inventory is shrinking, so the time to act is now if securing warehouse space is high on your list.
The commercial real estate market is booming on both sides of Afton Mountain. Agents look forward to a productive 2019 and even more and varied places to work, shop, eat, live and enjoy a night out on the town.
Celeste Smucker is a writer and blogger who lives near Charlottesville.