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RICHMOND,VA-LandAmerica recently sold its office asset in Richmond’s southwest quadrant for $8.9 million to Patriot Equities in Philadelphia as it prepares to move into its newly leased space across town. CB Richard Ellis brokers Joe Marchetti, Tom Vonzenlick, Alex Hamilton, Zach Roski, and Rebecca Barricklow represented LandAmerica. Patriot Equities was represented inhouse.

Marchetti tells GlobeSt.com that, for a vacant single-tenant building, LandAmerica received the best price it could have gotten in the market. Comparable transactions to the 127,000-sf class A building included the sale of the Owens & Minor Building, a 65,000-sf building that RPM Investments Inc. bought for $4.46 million in Q3; the Fairfax Building, a 148,812-sf class B building in the southwest quadrant that sold for approximately $20 million during the second quarter and Innsbrook Place, a 30,000-sf building in the northwest quadrant that sold for $3.89 million.

LandAmerica’s departure from the building is stirring up the normally static rental submarket here. Between the building’s sale and Philip Morris’ departure across the street there is now more than 200,000 sf available, Marchetti says. “The southwest quadrant has a lot of energy right now, while the northwest quadrant, where the bulk of the market, has been fairly stable or in a slight decline,” he says.

Average rental rates for class A space are around $19 per sf, he says, with most deals averaging around five-year terms. TI allowances are hovering at $15 per sf.

Dino Bazianos, vice president of corporate real estate for LandAmerica, tells GlobeSt.com that the Richmond real estate market is so robust the firm considered some 25 different options. The firm projects it will double in size by 2010, so it looked to expand its existing space or even build-to-suit.

After it weighed property costs in the area, construction costs and rental rates, it decided that it would get the biggest value for its dollars by subleasing space for three years from Capital One across town in the northeast quadrant, in Glen Allen. Then, after the three-year sublease is up, the firm will be in a true lease with the building’s landlord Boston-based Franklin Properties, for an additional seven years. The rental rate it negotiated for the 297,789 sf at 5600 Cox Rd. is below market, Bazianos reports.

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