Pembroke Mall Revelopment (Ongoing-Phase 1)

[baobabs727]

2 hours ago, vdogg said:

This is terrible. I'm so tired of this happening in our area. We just can't catch a break. I was so looking forward to this project too. Wouldn't it just be better to wait until conditions improve than build something mediocre? Nothing to really look forward to now at Pembroke. Wouldn't be surprised if the multifamily component follows suit.

Truly, I feel your pain. This is a huge letdown:  no ands, ifs or buts about it.  Somehow I thought this one was "recession proof."  Ummm, IDK why, lol. They never are in our lil' tertiary market! Nevertheless, that's exactly what I was thinking.  I wasn't worried at all. Well, actually...perhaps I was under that very impression because we were LED to be (over)confident...because the Pembroke Sq. folks announced this $200M+ project right smack dab in the middle of a crazy inflationary period.  So, what? They didn't see this whole downsizing thing coming prior to all of that rah rah fanfare??? This announcement was all quite recent! They were so polished, organized, "gung-ho!" Moving with alacrity.  And tearing down a multi-million dollar bank building of recent vintage to make way for redevelopment is absolutely unheard of in these parts and demonstrated the nearly unparalleled strength of their location and of what we thought was the strength of demand in the hospitality sector in VB at VBTC.  WTH?!  Something feels off. Were they baiting the City to partner on the parking facility? And now the switch? Ugh. I'm guessing they must need $$$  revenue now that they've lost all of their mall tenants and cannot wait months or years for conditions to improve.  I. D. K.   :(   

1 hour ago, vdogg said:

One can only hope that we add something to the skyline over 20 stories in the next 10 years. This is getting ridiculous now, it's been a really long time since the last tower was built.

I agree. It's depressing, actually. I wish I could see the path forward.

Built where? Block 2?  Seritage property? Built FOR whom? BIG QUESTION MARK.  VBTC has never landed a whale from outside the region despite the fact that VBTC was expressly purpose-built to do just that.  Built by whom?  A/H, somebody else? Doubtful we'll see any outsiders marching in to save the day.  Sadly, I see no realistic path forward to the 20+ story building. But of course, I don't have a crystal ball, and hope springs eternal....  Yes, even from my aging, jaded heart and mind. 

[vdogg]

41 minutes ago, baobabs727 said:

Truly, I feel your pain. This is a huge letdown:  no ands, ifs or buts about it.  Somehow I thought this one was "recession proof."  Ummm, IDK why, lol. They never are in our lil' tertiary market! Nevertheless, that's exactly what I was thinking.  I wasn't worried at all. Well, actually...perhaps I was under that very impression because we were LED to be (over)confident...because the Pembroke Sq. folks announced this $200M+ project right smack dab in the middle of a crazy inflationary period.  So, what? They didn't see this whole downsizing thing coming prior to all of that rah rah fanfare??? This announcement was all quite recent! They were so polished, organized, "gung-ho!" Moving with alacrity.  And tearing down a multi-million dollar bank building of recent vintage to make way for redevelopment is absolutely unheard of in these parts and demonstrated the nearly unparalleled strength of their location and of what we thought was the strength of demand in the hospitality sector in VB at VBTC.  WTH?!  Something feels off. Were they baiting the City to partner on the parking facility? And now the switch? Ugh. I'm guessing they must need $$$  revenue now that they've lost all of their mall tenants and cannot wait months or years for conditions to improve.  I. D. K.   :(   

I agree. It's depressing, actually. I wish I could see the path forward.

Built where? Block 2?  Seritage property? Built FOR whom? BIG QUESTION MARK.  VBTC has never landed a whale from outside the region despite the fact that VBTC was expressly purpose-built to do just that.  Built by whom?  A/H, somebody else? Doubtful we'll see any outsiders marching in to save the day.  Sadly, I see no realistic path forward to the 20+ story building. But of course, I don't have a crystal ball, and hope springs eternal....  Yes, even from my aging, jaded heart and mind. 

The bad thing is, the "recession" hasn't even begun yet, at least not technically. There's been some downsizing in the tech sector, but overall the economy is still adding jobs. GDP is still growing. The bank runs are concerning, but it seems that most of that is the result of depositor panic and not any true fundamental change. It seems all too premature to downsize so drastically, unless this was always what they planned to build anyway... What am I missing here? I really wish we could get a view on their internal calculations and see what they're looking at.

[HRVA]

53 minutes ago, vdogg said:

The bad thing is, the "recession" hasn't even begun yet, at least not technically. There's been some downsizing in the tech sector, but overall the economy is still adding jobs. GDP is still growing. The bank runs are concerning, but it seems that most of that is the result of depositor panic and not any true fundamental change. It seems all too premature to downsize so drastically, unless this was always what they planned to build anyway... What am I missing here? I really wish we could get a view on their internal calculations and see what they're looking at.

Interest rates are messing up a lot of projects. Higher construction costs were somewhat offset over the past few years by lower rates and increasing rents but with higher rates and rent stabilizing, the numbers don’t make sense on things that did just last year. I don’t know if that’s what is going on here but it’s certainly happening all over. 

[baobabs727]

3 hours ago, HRVA said:

Interest rates are messing up a lot of projects. Higher construction costs were somewhat offset over the past few years by lower rates and increasing rents but with higher rates and rent stabilizing, the numbers don’t make sense on things that did just last year. I don’t know if that’s what is going on here but it’s certainly happening all over. 

Much of this was forseeable.

4 hours ago, vdogg said:

The bad thing is, the "recession" hasn't even begun yet, at least not technically. There's been some downsizing in the tech sector, but overall the economy is still adding jobs. GDP is still growing. The bank runs are concerning, but it seems that most of that is the result of depositor panic and not any true fundamental change. It seems all too premature to downsize so drastically, unless this was always what they planned to build anyway... What am I missing here? I really wish we could get a view on their internal calculations and see what they're looking at.

Right. Not technically a recession, but darned close. We can argue about the definition of a recession, the current administration sure has tried to re-define it (in threshold terms).  But we do have pressure on wages, commodities, plus labor shortages, inflation at 6-8 percent, which is 3x what it  had been for many, many years on average.  Also, GDP growth is not exactly robust.  It is a fact that the average family is LOSING ground economically, as wages are not keeping with the prices of almost everything.

[baobabs727]

Remember what happened with the Seritage property?  Pembroke showed their financial cards in that big fat pass. And A/H showed theirs, by stark contrast. I hate to say this, but maybe the Napolitanos, et al--and seriously,  God love them for their myriad contributions to the HR Dev. scene and to local philanthropy...and for their amazing business acumen and longevity over these many, many decades ...--but maybe, just maybe, they should have either sold or taken on some additional partners.  I do know that old Beach families (sometimes originally by way of old NY/NJ families lol) never sell anything, but...........

Edited May 2, 2023 by baobabs727

[HRVA]

The SunTrust building has been fenced off and demo equipment is onsite. 

[baobabs727]

Bring on the 15..er...7 story building!  

Edited June 22, 2023 by baobabs727

[urbanvb]

I'll settle for almost anything at this point.

[baobabs727]

19 minutes ago, urbanvb said:

I'll settle for almost anything at this point.

Yeah, I guess it will add to the density in the area as you drive down VB BLVD.  Problem is that there is so much empty space around that any critical mass on the density front would take eons to achieve lol.  Sigh. It would have been so cool to see a 15 story building right there on the street. I still wish they would have waited for better market conditions instead of re-branding and scaling back in a significant way.    

[varider]

RIP to my hopes for actual urban development at Pembroke Square! 
 

https://www.virginiabusiness.com/article/pembroke-square-scales-back-some-parts-of-project/

AT BEST, we are now looking at a measly 7 story hotel (down from 14), and a measly 7 story apartment building (down from 12).WITH AT BEST, construction STARTING in 12-18 months. What a nightmare. I thought we were getting a Town Center expansion, now it’s looking like Battlefield/Greenbrier scale 

[baobabs727]

1 hour ago, varider said:

RIP to my hopes for actual urban development at Pembroke Square! 
 

https://www.virginiabusiness.com/article/pembroke-square-scales-back-some-parts-of-project/

AT BEST, we are now looking at a measly 7 story hotel (down from 14), and a measly 7 story apartment building (down from 12).WITH AT BEST, construction STARTING in 12-18 months. What a nightmare. I thought we were getting a Town Center expansion, now it’s looking like Battlefield/Greenbrier scale 

Yes, this we knew. It's still sad to hear it again, however.  Very.

1) Still don't know exactly why the rush here. Why wouldn't they consider waiting until conditions improve, especially given that the changes are pretty dramatic? 

2) Wondering if similar projects in Richmond, Raleigh, Charlotte and Nashville are being scaled back? Hmm. Somebody...?  TY. 

Edited June 26, 2023 by baobabs727

[vdogg]

I do not understand why they're scaling the apartments back, though I knew this was coming after they halved the hotel. We still have a shortage of apartments here. Now there's really nothing to look forward to in that area...

[Buildthetowers]

When you are in the know of population reduction then you know that less space is needed!

Edited June 27, 2023 by Buildthetowers

[baobabs727]

14 hours ago, vdogg said:

I do not understand why they're scaling the apartments back, though I knew this was coming after they halved the hotel. We still have a shortage of apartments here. Now there's really nothing to look forward to in that area...

Ok, I asked Mr. Smith. So he said that with interest rates having doubled recently, ongoing supply chain issues and inflation, financing is really not an option. Accordingly, a reduced building height allows for stick-built construction, and thus significant cost savings.  Waiting was not an option either.  No other details provided. 

[HRVA]

Guess they didn’t see the foreseeable…

[baobabs727]

4 hours ago, HRVA said:

Guess they didn’t see the foreseeable…

Well, that's a fair point...and I have made the same point here earlier...or at least a tangential one.  I asked Mr. Smith, as a follow-up, again, why not wait it out?  He responded that they'd actually prefer to build during what he terms, a "recession." He claims subs are asking for work now, so labor costs should begin to fall shortly...if they haven't begun to do so already.  Construction costs have been falling slightly...and they want to start now so as to deliver the product right at the start of the upswing/recovery. So, it's timing, timing, timing. But as anyone here knows, you can't really time the market. You can only guess.  I wish them all the best.  Hoping for a nice outcome for all concerned.    

Edited June 27, 2023 by baobabs727

[KJHburg]

On 6/26/2023 at 1:55 PM, baobabs727 said:

 

2) Wondering if similar projects in Richmond, Raleigh, Charlotte and Nashville are being scaled back? Hmm. Somebody...?  TY. 

we have had some apartment and office projects delayed for sure but with strong population growth in Charlotte and in Raleigh lots of stuff is still starting just not everything that was proposed.  Strong developers can get things financed with a good track record others are waiting.  In the last month we just had a high rise apartment tower start here in Charlotte. 

In terms of costs a 5 story wood frame over concrete 2 floors is a LOT cheaper to build than a straight up high rise.  Lumber costs have decreased from their Covid highs for sure but labor costs have not gone down.  There is still inflation all through out construction but lumber did come off it is unstainable peak pricing.   Look at the 5 year lumber pricing chart  https://tradingeconomics.com/commodity/lumber      High rise construction is not any cheaper and rents have to be able to make the numbers work.  

[baobabs727]

22 hours ago, KJHburg said:

we have had some apartment and office projects delayed for sure but with strong population growth in Charlotte and in Raleigh lots of stuff is still starting just not everything that was proposed.  Strong developers can get things financed with a good track record others are waiting.  In the last month we just had a high rise apartment tower start here in Charlotte. 

In terms of costs a 5 story wood frame over concrete 2 floors is a LOT cheaper to build than a straight up high rise.  Lumber costs have decreased from their Covid highs for sure but labor costs have not gone down.  There is still inflation all through out construction but lumber did come off it is unstainable peak pricing.   Look at the 5 year lumber pricing chart  https://tradingeconomics.com/commodity/lumber      High rise construction is not any cheaper and rents have to be able to make the numbers work.  

Appreciate the knowledge and outside perspective. The owners of the Pembroke Mall property seemed to imply that they were now financing the apartments themselves, or perhaps in large part through reserves  I'm not exactly sure and didn't want to ask for that much detail. Project was definitely going to be financed in the original plans. 

I don't know if you saw this but Richmond City Council just approved a twin 17 story residential tower project along the James river in Manchester. "Affordable" housing, 555 units. I was pretty impressed by that, of course time will tell.  

Edited July 1, 2023 by baobabs727

[urbanvb]

The bank building is completely demolished and site cleared.

[vdogg]

On 7/14/2023 at 3:57 PM, urbanvb said:

The bank building is completely demolished and site cleared.

Making way for 7-stories of glory to rise in it's place. 

[varider]

 

senior living aside, shorter buildings aside, it feels good to start eating away at the surface parking. it already has made an impact and we’re only 1.5- 2 floors out of the ground. 

[mintscraft56]

Any new renderings on the shortened project? I at least wanna see what it looks like.

[varider]

[baobabs727]

Romano's Macaroni Grill has closed. 

I reached out to Ramsay Smith, and he told me that an upscale, new to the market restaurant concept will inhabit the Macaroni Grill spot.  The restaurant operator of that establishment will also open another upscale,  new to the market restaurant concept on the first floor of the new Hilton family-branded hotel.  Fogo de Chao had signed an LOI for the Macaroni Grill spot, but Ramsay Smith and partners went this other, larger, unnamed operator because they agreed to open two restaurants and brought with them a better credit rating to Pembroke Square. 

Speculating here, but I think that eliminates Maggiano's Little italy. Even though they have been looking to locate a single unit in VB for 10 plus years now, as best I can tell their parent company doesn't own another upscale restaurant concept.

Darden? Landry's?  

I'm going to say Darden's $$$$ The Capital Grille is a long shot, but boy oh boy wouldn't that be amazing?  $$$$ Eddie V's and $$$ Seasons 52, perhaps?  Hmm. An interesting note:  At Tysons, all three concepts sit about 300 yards from one another. 

Or might Landry's bring a Morton's...?  What else? Mr. Smith used the word 'upscale," but of course that term can mean different things to different people. Several of Landry's upscale offerings are nosebleed $$$$$ level, so I don't think so.

The hotel is currently under redesign. Still 7 stories.  He is ready to  complete the deal with the City for the parking garage and move forward with construction once the hotel redesign is completed. Apartments still 7 stories. No start date announced. 

[KJHburg]

My bet would be a high end steakhouse like a Capital Grille (which is fantastic) or Del Friscos or Flemings or Mortons if you don't have any of these.  All of these look for wealth for sure and if they are not in your market then its a possibility.