Richmond Bizsense: “SunTrust Center, Riverfront Plaza Get a Jolt”
The owner of a downtown office building has signed on for a shot in the arm to help fund the tower’s future, while an out-of-town financial firm is making a push into Richmond.
Parmenter Realty Partners, the Miami-based firm that owns the 24-story SunTrust Center at 919 E. Main St., has entered into a joint venture with Partners Group AG of Switzerland to recapitalize the building’s ownership group in the face of the pending departure of its namesake anchor tenant.
Nan Leake, a Richmond-based partner at The Partners Group, said the deal involved a private equity secondary investment for the firm to take a partial ownership in the SunTrust Center, as well as a two-building office complex and a 12-story tower in Texas. It did not involve any of the buildings trading hands, she said.
“We’re going into a fund with Parmenter and we’re recapitalizing it so that they can continue with their business plan,” Leake said. “We’re letting them extend the fund and execute their plan.”
Leake would not go into financial specifics regarding the recapitalization, other than to say that Partners Group now has an ownership stake in the entity that owns the SunTrust building.
“We were able to get in at a very attractive price,” she said.
Parmenter has owned the 458,000-square-foot SunTrust Center since at least 2008. In January, SunTrust announced its plans to eventually vacate its 216,000 square feet in the building in favor of anchoring the forthcoming Locks at 3Twenty-One, a $93 million, 21-story office tower planned at 10th and East Byrd streets.
The pending departure of SunTrust will be followed by improvements on the SunTrust Center, John Davidson, a Parmenter managing principal, said.
“The deal with the Partners Group was brought about to take the building to the next phase or chapter once SunTrust moves out,” Davidson said. “This gives us a great opportunity to modernize and make extensive mechanical upgrades that will improve performance and the tenant experience, as well as dramatically reduce energy consumption.”
In addition to its namesake, the SunTrust Center is home to law firm LeClairRyan, the Virginia Chamber of Commerce and Chamber RVA. The building’s leasing is handled by Commonwealth Commercial Partners. For now, only about 1 percent of the building is available for lease, said Commonwealth Commercial broker Jamie Galanti. He said the downtown office market has seen a focus on occupancy as the price per square foot has dipped.
“With Riverfront Plaza and the James Center you’ve got two motivated owners,” He said. “It’s a tenant’s market in downtown Richmond.”
Riverfront Plaza has about 227,000 square feet available for lease between its two towers. The James Center has about 330,000 square feet available across its three buildings. The overall downtown office vacancy rate was 12 percent in the second quarter, according to a CBRE | Richmond report.
CBRE | Richmond handles leasing for Riverfront Plaza at 901-951 East Byrd Street.
Riverfront Plaza over the past two months has signed about 85,000 square feet worth of office deals, according to CBRE | Richmond, which handles leasing for the twin towers on East Byrd Street. New tenants include the law firm Vinson & Elkins and ICMA-RC, a retirement plan manager, both of which are opening their first office in Richmond.
ICMA-RC, a nonprofit based in Washington, D.C., plans to bring more than 100 employees to Riverfront Plaza from its headquarters and eventually hire another 100 employees, according to a Monday release from the Greater Richmond Partnership. The release did not specify the timeline for when those jobs would be added. It stated that the company would make a capital investment of $10 million in Richmond.
Trib Sutton, Matt Anderson and David Wilkins represented the landlord in Riverfront Plaza’s recent lease deals.