City & Guilds owner David Gammino is the latest developer to take a crack at an apartment project in Shockoe Bottom.
Hundreds of apartments are coming online in the area over the next couple of months. Undeterred, Gammino bought the a five-story warehouse at 1709 E. Clay St. for $1.5 million. It was previously owned by Bob Mills of Commonwealth Architects, which is also designing the project.
Work has already started on the 38 apartments, which Gammino said will be online by fall. There will also be 3,600-square-foot commercial space on the ground floor, as well as underground parking.
“It has one of the most breathtaking views of the city. It is further west of the other buildings there, so you have the view to the south and a view of downtown to the west,” Gammino said.
Gammino said he is developing the $5 million project with a couple of private investors. StellarOne is financing it.
The project is the latest to be undertaken in the area. Several developers have new and renovated properties under construction or recently completed, including the Richmond Cold Storage complex by Historic Housing and the new Cedar Broad Apartments by George Emerson.
Gammino said he isn’t too worried about there being too many other apartments in the area because he is aiming for the higher end of the market — renting units for between $1,200 and $1,500 a month.
“It is a moderate number of units,” Gammino said. “I’m not concerned we won’t be able to rent them up in the time frame we expect, which is three to six months.”
Bruce Milam, a broker with Grubb & Ellis | Harrison & Bates, said that although the number of apartment projects in the area keeps climbing, demand hasn’t seemed to diminish.
“You started adding it up, and there is close to 1,000 units emerging out of the pipeline all at one time over two years,” Milam said. “That’s a whopper.”
Milam said that although the number of units keeps going up, vacancy for apartment buildings in the area has stayed at about 5 percent or 6 percent. Most of the demand is coming from the continued growth of the VCU School of Medicine.
“It appears if you build something decent downtown, it will fill,” Milam said.
Al Harris covers commercial real estate for BizSense. Please send news tips to Al@richmondbizsense.com.
I love how every Developer thinks they know how this area works and every one of them shoots for the 1000-2000 mark without considering what is already in place. They see this an endless oppertunity to make money but never consider that this area still needs things like shopping and other entertainment besides the local bar scene. They don’t conisder that people who provide their basic services are being priced out of living in that area. Every one of these developments claims the demand is there and yet there is no waiting lists for existing appartments. This looks like another case of Overdevelopment at the expense of the very community they claim to want to help. Leming that ignore the cliff as they all wander over it.
There will never been any decent retail without a sizable population. Besides, I’d rather have blocks of half empty apartment buildings than blocks of abandoned warehouses infested with crack heads. If these developers want to take the gamble, then go for it. I don’t see how it is at the expense of the community. How does it hurt the community? It drives away vagrants, helps clean up the streets and provides tax dollars to the city. Where is the loss?
Renovations of former warehouses and the removal of paved lots should be welcomed. Steve’s comments don’t really follow a logic trail, because renovated properties have higher property tax rates. Yes, we will end up waiting a few years to collect the added property tax, but we still end up with one less unused building. As Brett points out retail developments always follow residential, so it’s unrealistic to expect shopping options to pop up prior to a residential population. Keep in mind VCU continues to grow and as it is growing, fewer and fewer students are deciding to live in the counties. Apartments wouldn’t continue to be built if there wasn’t demand, and as someone who knows many people who live in Shockoe Bottom, I can vouch for the rental market’s health.
RobinsonSt there you would be Wrong I believe that you can build but you can’t just think your going to get 2000 a month for every apartment. Every developer has the unreal expectation that they will make out in the short haul and when It starts to go south will abandon it to others.
Brett not every homeless person down the Bottom is a crack head (thanks for being that guy)
There is a sizable population already in place and they do their shopping elsewhere the support is there but everyone wants to wait until there is no room or that they have Overdeveloped the area just like the rest of VA.
Can’t help if I see how it can be shortsided to not provide affordable living to people who work in and around there. I also don’t see how your VCU students could afford the apartments that are being priced at now. Growth has consequenses and it seems you don’t get that Idea. So far I see 2 people who never seen Boomtown politics in action nor have seen the aftermath.
Wow, I guess the professional architect, real estate broker and the developer should have consulted Steve first. I guess it’s easier to throw darts at people you don’t know, making decisions you don’t understand about businesses you aren’t involved in. The apartments will sell for the market price (whatever it is). They will either succeed and be justified or they will fail and Steve will have an opportunity to put his money where his mouth is and provide affordable housing or shopping that meets his approval… but I’m sure someone on here will have a problem with the way he does that.
David I am not the only one with this view and they had someone to look over the overall city plan and your Developers with the help of city council drove her out of office. The only thing these developers see is Money they could make short term. David I lived in Shockoe Bottom and tracked apartment prices and they are far from going down. This is where your theroy is incorrect because the people who invested early in Shockoe Bottom refuse to loose the money they feel entitled to.
Having lived in the Before and After of a Boomtown Politics in action and lived in places like Califorina where people can’t afford to live in major citys but I am sure you know better than I do.
You have seen it when Developers overbuild places Like Oceanview in Norfolk and only a Decade later turned from a up and coming development to a slum. Yep the Real Estate brokers who sold that property left 5 years later.
Steve, you do realize your commentary makes no sense? Granted, I don’t think what the developers are doing makes sense either, but they are putting their money and time on the line, and we’ll see if they are right.
Even if this isn’t good for the developers its good for the area though. Unless you are one of those crazy people who thinks slums and grafitti and vagrancy is a good thing, those apartments will rent at some price, and there will be more people in the bottom. This is good for the bottom and for the city, and that demand will in turn lead to more stores etc.
Granted, long term making the area nicer will make it more expensive, but why is that a bad thing? I happen to prefer Richmond being a nice city to Richmond being a hole. If you want to live in a hole, move to Detroit.
Rising rents are perfectly correlated with nicer cities.
Charles just because a Developer is willing to invest someone elses money in a project does not make them right. You really have not seen what happens with a Boomtown political set up and frankly I think it is you who don’t make sense. You want everyone to build, build, build when they are not taking care of any of the problems in the area right now. These issues will not just leave because Developers who don’t invest their money but get loans or use other people’s money to run these projects.
Detroit is a hole as you say because they did the same thing you want to do here so I won’t have to move at all. As for Rising rents if you have no where for the people who do the basics around your part of the city you end up paying for it later. When people make that mad dash back out of the Bottom because things get to crowded, lack of parking and an increase of homeless people because they know where people will pay them to leave them alone.
Baltimore has to deal with the fact that everyone who does their day to day stuff has to be bussed in and we have the oppertunity to avoid that but you all want to build and price everything out so you can make money in the short run.
The thing is these Developers will either cut and run or they will do worse they will hire people to run their places and charge even more while doing nothing to maintain anything. Why do you think parts of Manchester is still a Ghost town? Why most who live in the Parachute factory are disastified the fact the Developers there went with cheaper drywall and no sound insulation and when they gave it to the service company most of the people who deal with them are up in arms.
Charles you have a very,very narrow perspective on this deal and you seem to enjoy that view at the expense of the place that is being over developed. Did anyone mention to all these people who invested this money that Shockoe Bottom is in a flood plane? Didn’t seem to stop the greedy people who wanted to put a Ballpark that didn’t fit in here either.