More money from out of town continues to flow into the Richmond area, with a Sunshine State company making a splash for flexible spaces in Henrico County.
South Florida-based Savlan Capital closed two industrial and office buildings at 8575 and 8580 Magellan Parkway last week for a total of $18.9 million.
The buildings total 126,000 square feet and are located in Windsor Business Park between East Parham Road and Interstate 295.
The smaller of the two is the 8575 Magellan at 50,000 square feet. It is leased to a subsidiary of CVS Health which uses it as a pharmaceutical storage and distribution facility. Savlan paid $8.8 million for the property.
The 76,000 square foot building at 8580 Magellan sold for $10.2 million and is used as a data center for Bon Secours Mercy Health.
Savlan closed the buildings on February 10. They were recently appraised by Henrico County at $15.2 million.
The sellers of the agreement were RU Windsor IV Richmond VA LLC and RU Omnicare Richmond VA LLC, entities related to various registered agent services in Southern California.
County records show 8580 Magellans last sold in November 2018 for $10.5 million, while 8575 Magellans last sold for $7.4 million in July 2017.
The deal marks Savlan’s entry into the Richmond market. Founded in 2016, the company’s portfolio includes approximately 1 million square feet of real estate, primarily in the Southeast and Southwest.
CEO Zusha Tenenbaum said the Windsor Business Park deal included two niches that Savlan is focusing on.
“We like medical real estate and we like flexible offers. This Richmond location was a great deal for us because it combines flexible and medical tenants,” Tenenbaum said.
While occupancy rates in the Richmond office market are doing better than the national average, Tenenbaum said flexible office space is less volatile than standard office space.
“I think it’s because the flex is a lot easier,” Tenenbaum said. “I see a higher overall occupancy rate in flexible offices than in offices.”
Savlan isn’t planning any changes to the buildings he just acquired, nor will he be looking to turn around and flip them.
“It’s not a value-added deal, it’s a long-term deal for us,” Tenenbaum said.
Having family in the area initially put Richmond on Tenenbaum’s radar, but he said the area’s diverse economy, steady population growth and high crime rate make it an attractive market.
“We look at a whole bunch of different metrics and Richmond falls into a lot of the metrics we’re looking for,” he said.
He added that Savlan also has an unnamed building in Fredericksburg under contract that is scheduled to close next month.
Although he has much of his holdings in southern states like Texas, Florida, the Carolinas and now Virginia, Tenenbaum said Savlan is ready to go elsewhere.
“We don’t discriminate against a good deal,” he said. “If we see a lot of stuff in New York or California, we’ll go there.”