RICHMOND, VA-The Midlothian submarket has seen its first office portfolio sale of the year close-–a significant and reassuring milestone given the dearth of transactions in 2009 and 2010. Parkway Properties sold the five suburban office properties for $25 million to the Hertz Group of California.

Eric B. Robison and Catharine Spangler of Cushman & Wakefield | Thalhimer's Investment Brokerage Group and David Meline, Stewart Calhoun, Samir Idris and Casey Masters of C&W represented Parkway Properties in the sale. 

The purchase price breaks down to roughly $60 per square foot for the assets, Robison tells GlobeSt.com—a price that, given the portfolio’s occupancy level of 74%, is right in line with where office buildings have been trading. Richmond struggled during the recession, he says. In 2011, there were several income-producing office asset sales, but none in 2010 or 2009.

Now, “the improving fundamentals in Richmond are driving investor interest, along with cap rate compression in some of the larger markets.” Indeed, he says, some investors have headed to Richmond after being discouraged by the high asking rates in Washington, DC. “It is not like we saw in 2007 but we are benefiting from it.”

This particular portfolio is an important trade for the market because it represents 10% of the total office product in the Midlothian submarket, giving the buyer a competitive presence when competing for tenants to fill existing vacancies, Robison says.

The portfolio consists of five suburban office buildings built between 1984 and 1987. They are Boulders Center, located at 1011 Boulders Spring Dr. in the Boulders Office Park, Moorefield I, II and III located at 804, 808 and 812 Moorefield Park Dr. and the Winchester Building located at 10800 Midlothian Turnpike.  The portfolio totals 419,126 square feet.