Patriot Equities

Case Study

Patriot Tower at Gateway, Richmond, VA

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Challenge

Since the mid-1990s, LandAmerica operated 200+ offices nationwide from its Richmond, Virginia headquarters. This 130,000 square foot facility was ideal for the company until increased operational demands surpassed available space. Initially, LandAmerica explored the possibility of expanding this headquarters building. And at one point, the company even purchased an adjacent parcel of land to construct an additional building. But further discovery revealed both scenarios would not meet the company’s growth objectives.

Instead, LandAmerica made the strategic decision to consolidate its existing headquarters and other regional operations into a 200,000+ square foot leased facility nearby. However, cyclical business constraints created timing uncertainty which prevented the corporate seller from being able to set an exact date when all employees would be able to relocate. It was important that LandAmerica divest its former headquarters quickly to avoid the potential risk of carrying a vacant liability on its books for an extended period of time. With a significantly reduced pool of buyers due to imminent vacancy of its headquarters and lease timing uncertainty, management was concerned that a timely disposition would be challenging.

Solution

The Patriot development team saw beyond this asset’s unstabilized profile, recognizing a value-add opportunity for repositioning a well-maintained single-tenant facility into a Class A multi-tenant office complex. Patriot’s acquisition plan provided LandAmerica with the flexible month-to-month leaseback term it required, ensuring an operationally smooth transition to its new leased headquarters facility.

As is often true, price was just one consideration for LandAmerica. Patriot’s creativity and proven track record of success with corporate sellers gave LandAmerica confidence in its ability to ensure a timely sale. Flexibility on Patriot’s behalf turned timing concerns from a “deal breaker” to a “deal maker”, netting a win/win solution for all.

Result

The Patriot team will reposition this 6-story Class A facility from a single to multi-tenant environment. Future improvements will leverage existing upgrades made by LandAmerica before the asset was brought to market. This transaction exemplified Patriot’s ability to maximize the value of the Seller’s existing assets by taking a strategic approach to its occupancy requirements. Ultimately, an aggressive marketing campaign will be put in place to re-lease the vacant asset.

Seller

LandAmerica, Inc.

Transaction Type

Acquisition - Vacant Headquarters

Use

Headquarters, Office

Size

130,000 Sq. Ft.