Columbus Village at Town Center (Cancelled)

[vdogg]

Do not be surprised if nothing further happens at Town Center under Armada Hoffler. I think the writing has been on the wall with this for quite some time. At least it makes it easier for the city to move on next year when their option expires.

https://www.pilotonline.com/2023/07/20/armada-hoffler-celebrates-20-years-of-virginia-beach-headquarters/

"The company has “deep roots” in Virginia Beach, Haddad said, but the future for its headquarters is unclear. Today, the company has larger investments outside Hampton Roads than within the region as it has grown primarily across the mid-Atlantic and Southeast, he said. And so, there are opportunities to move to a higher growth area."

“But ultimately, the decision of where the company is located is going to be based on what brings the most value to our shareholders,” Haddad said

I would love to give the folks who are trying to build the Capstone development at the oceanfront a shot at building something at Town Center instead.

[urbanvb]

I have mixed feelings about this having met some great people in their organization years ago however, since shareholders are now involved, I wouldn’t be surprised either if they relocated to faster growing markets. We really really need some fresh perspectives in the area to get things moving.

Edited July 20, 2023 by urbanvb

[urbanlife]

On 7/20/2023 at 9:42 AM, vdogg said:

Do not be surprised if nothing further happens at Town Center under Armada Hoffler. I think the writing has been on the wall with this for quite some time. At least it makes it easier for the city to move on next year when their option expires.

https://www.pilotonline.com/2023/07/20/armada-hoffler-celebrates-20-years-of-virginia-beach-headquarters/

"The company has “deep roots” in Virginia Beach, Haddad said, but the future for its headquarters is unclear. Today, the company has larger investments outside Hampton Roads than within the region as it has grown primarily across the mid-Atlantic and Southeast, he said. And so, there are opportunities to move to a higher growth area."

“But ultimately, the decision of where the company is located is going to be based on what brings the most value to our shareholders,” Haddad said

I would love to give the folks who are trying to build the Capstone development at the oceanfront a shot at building something at Town Center instead.

My guess would be either Baltimore/DC or Atlanta, with Baltimore/DC being the likely location. This definitely sounds like they are moving on from the Virginia Beach Town Center, which is unfortunate and could be a good thing in the long run by potentially having various other developers expanding the area rather than it all be built by one developer. Interesting to see that VBTC was basically the springboard for the company to help them jump to bigger markets, which sadly says something about VB and the rest of Hampton Roads.

[baobabs727]

For the second time in 4-5 mos, I have written to Mr. Worth Remick, my District 6 Beach Councilman, re: A/H's purposeful reallocation of capital to other "higher growth" markets...and most especially their dubious hold on Block 2 . I have lobbied for ZERO additional extensions on that option. He has responded that he can't comment on a public email and that he will "look into it."  He also noted that developers hold options all over town, but that that was "no excuse" (for not being concerned about/not being interested in A/H's  intentions vis-a-vis Block 2 and their public statements about moving their HQ and/or re-directing resources away from VB). 

[HRVA]

Time to switch this to dead/canceled or at least comprehensively modified. Haddad states they will not be expanding multifamily at Town Center and will expand and retenant BB&B. Regal will remain but they leave the door open to a retail oriented redevelopment as a phase 2 for the right opportunity. They cite their control of the existing market as a reason not to add apartments. Further, while their office space remains 99%+, they are aiming to get space back from downsizing tenants to accommodate prospects. They moved some of their own space within TC to do as much. He says an anchor tenant at a higher rent then the current market is required for a new office tower.

Q2 Earnings Call

Edited August 23, 2023 by HRVA

[BFG]

It’s time to tell AH to put up or shut up. Either invest more in your backyard or the city needs to find a new company to do business. 

[vdogg]

On 8/23/2023 at 10:32 AM, HRVA said:

Time to switch this to dead/canceled or at least comprehensively modified. Haddad states they will not be expanding multifamily at Town Center and will expand and retenant BB&B. Regal will remain but they leave the door open to a retail oriented redevelopment as a phase 2 for the right opportunity. They cite their control of the existing market as a reason not to add apartments. Further, while their office space remains 99%+, they are aiming to get space back from downsizing tenants to accommodate prospects. They moved some of their own space within TC to do as much. He says an anchor tenant at a higher rent then the current market is required for a new office tower.

Q2 Earnings Call

Saw this coming but still sad that it's official. Time to move on. They need to sell that land back to the city instead of squat on it. No more public private deals for them. They've milked this city for all it's worth and what they've left us with is mediocre at best. Time for the city to put out another rfp.

[baobabs727]

On 8/23/2023 at 10:32 AM, HRVA said:

Time to switch this to dead/canceled or at least comprehensively modified. Haddad states they will not be expanding multifamily at Town Center and will expand and retenant BB&B. Regal will remain but they leave the door open to a retail oriented redevelopment as a phase 2 for the right opportunity. They cite their control of the existing market as a reason not to add apartments. Further, while their office space remains 99%+, they are aiming to get space back from downsizing tenants to accommodate prospects. They moved some of their own space within TC to do as much. He says an anchor tenant at a higher rent then the current market is required for a new office tower.

Q2 Earnings Call

Having read the conference call transcript, I'm not as pessimistic as you might be.  High-end, unique-to-the market retail is what he's aiming for here, and interest from retailers remains high.  Also included in this overall redevelopment vision is the outparcel, plus potentially Regal Cinemas should they decide to vacate.  LH hopes to have a couple of announcements by the end of this year.  I think that is some pretty exciting stuff right there, but ymmv.  I was never all that enthused about apartments, as they would offer me, personally, no access, no entertainment, no value, etc.

[baobabs727]

Forgive my laziness, but without googling my life away, I was wondering if anyone here readily knows if Mr. Divaris has made any of the Oceanfront and VBTC development-centered development announcements foreshadowed in the following article from April 2023? 

https://sports.yahoo.com/virginia-beach-based-commercial-real-204500783.html   

[HRVA]

4 hours ago, baobabs727 said:

Having read the conference call transcript, I'm not as pessimistic as you might be.  High-end, unique-to-the market retail is what he's aiming for here, and interest from retailers remains high.  Also included in this overall redevelopment vision is the outparcel, plus potentially Regal Cinemas should they decide to vacate.  LH hopes to have a couple of announcements by the end of this year.  I think that is some pretty exciting stuff right there, but ymmv.  I was never all that enthused about apartments, as they would offer me, personally, no access, no entertainment, no value, etc.

The only change between Q2 and Q3 I see is leaving the door open for multifamily on the Regal site but that’s clearly a long term if…, then… plan. But really almost any multifamily project not already under construction is either dead/cancelled or on hold until rates start to come down. It is what it is. AH is going to save their capital for the deals that present themselves on the other side of this cycle.

As for Divaris, the only ‘big’ announcement I recall was LEGO. Hopefully there’s something coming before the end of the year but everything everywhere is getting pushed back so I’m not optimistic. 

[urbanvb]

I saw a couple of guys surveying the lot in front of Columbus Village Regal parking lot. Makes me wonder if anything is in the works...

[baobabs727]

Q3 Conference Call: "The former Bed Bath & Beyond in Durham has also remained top of mind and discussions with a short list of suitors for that space are progressing. As mentioned last quarter, in the Virginia Beach location, we have used the opportunity cost equation to narrow the programmatic options to best fit our strategy."

Q3 Conference Call: "As you know, part of that — the total parcel of 10 acres with the Bed Bath piece being roughly half or a little bit over half of that, the other being Regal Cinema. Regal Cinema continues to go — and if that — at some point, if that becomes available, that would probably be a multifamily portion. But right now, the program is on the Bed Bath site, and we’re dealing with a few high-end new-to-market retailers that we’d like hope to be announcing in the next quarter or so. But that will be essentially retail. And whether or not there’s any reuse of the box that’s there remains to be seen.

Q4 Conference Call: "We anticipate starting a re-development of the Bed Bath site that we’ve been talking about for a while. Right now, developments don’t pencil, don’t pencil with our cost of capital. That’s why we’re going to be reliant more on the preferred equity and the mezz platform in order to grow the portfolio. But right now, construction costs have not come back in-line. Interest rates remain elevated and you don’t have a ton of rent growth. Ironically, where we would have the most room is in office space, but obviously it’s just because we’re completely full in the locations that we have. And under normal circumstances, you’d be launching new office with anchor tenants. Obviously, that’s not going to be the case right now and as we wait to see how the office market on a macro level shakes out.

[urbanlife]

Basically they would build an office building right now if an an anchor tenant was seeking the space. This is where Virginia Beach government should be trying to lure businesses to Virginia Beach by showcasing what VB has to offer and what the future of the downtown will be, especially with a new office building. 

[vdogg]

On 3/20/2024 at 1:46 PM, urbanvb said:

I saw a couple of guys surveying the lot in front of Columbus Village Regal parking lot. Makes me wonder if anything is in the works...

Don't hold your breath. They might be surveying with the intent to sell (which would be a good thing since they obviously don't plan on doing anything with that property anyway), but if anything were in the works that likely would have been alluded to in the last earnings call. The only thing mentioned was the BBB site.

[HRVA]

3 hours ago, vdogg said:

Don't hold your breath. They might be surveying with the intent to sell (which would be a good thing since they obviously don't plan on doing anything with that property anyway), but if anything were in the works that likely would have been alluded to in the last earnings call. The only thing mentioned was the BBB site.

I doubt they would sell it. Controlling these properties is part of their anticompetitive strategy, as evidenced by the Sears building purchase. But they are indeed actively working on plans for the BB&B site, so that would be my guess or it could just be prep for utility work or something else mundane and unrelated. 

Divaris’s marketing seems to indicate the plan for BB&B is similar to what was done with FYE and Barnes and Noble, subdivide the box into smaller spaces. I’m sure it will be successful but it’ll tie that site up for the foreseeable future. 

Edited March 29 by HRVA

[baobabs727]

I've never said anything about it, but I've wondered for many months now why this thread status was marked "cancelled." A/H is not selling this property. They have not abandoned plans to redevelop the entire site. If you read the conference call transcripts going way back,  the BB&B site has always been in play.  And it remains in play, quite actively.  The multi-family component will one day be built on the massive Regal block, but until such time as Regal calls it quits there, A/H is content with collecting rent. For now. Until the fundamentals change, that is.