From food courts and beer taps to onsite living quarters and Blue Ridge Mountain views with private parking, Charlottesville’s current crop of soon-to-be-finished office buildings are displaying a lot of class.
And that class is Class A.
Dairy Central, 3Twenty3 and the CODE building are currently under construction with hopes of adding nearly a half-million square feet of top-notch office space in the next two years in downtown Charlottesville. As much as half of that space is already under lease, according to developers.
The projects are designed to provide employers with prestigious headquarters and employees with urbane amenities in an urban environment with scenic views and attractions.
“These buildings give us about 500,000 square feet of Class A office space and I would describe the current situation as unprecedented,” said Charlottesville Director of Economic Development Chris Engel. “Prior to this, we haven’t had similar space built in the city in about a decade.”
“I think Charlottesville is a little bit of a sleeping giant,” said Andrew Boninti, of CSH Development, which is developing the CODE Building. “For some of us who have been in town for a while, Charlottesville has been a sleepy, small college town. We’ve taken a lot of things for granted such as the Downtown Mall, the mountain views, Monticello and other attractions. But there are a lot of companies that would like to take advantage of those same amenities and developers have started saying ‘why not Charlottesville?’ It’s really appealing to businesses that want to provide their employees with the amenities and urban environment the employees want.”
Engel said the city is riding the wave of downtown revitalization that’s inundating cities across the country.
“We are in demand from tech companies, bio-tech companies and others that are looking for full-service amenities to offer their employees in an urban setting,” Engel said. “We’re not alone as Richmond is seeing a renaissance in their downtown and so is Washington, D.C.. Employers are trying to find locations that appeal to their employees, especially their younger employees who like the amenities an urban area can offer.”
According to the Building Owners and Managers Association, an international trade association for commercial real estate professionals, office space is most often divided into three classes: A, B, and C.
Class C office space is designed for tenants requiring functional space at rents below the average for the area and Class B space competes for a wide range of users with rents in the average range for the area.
Class A office spaces are “prestigious buildings competing for premier office users with rents above average for the area.” The buildings “have high quality standard finishes, state of the art systems, exceptional accessibility and a definite market presence.”
The A train is rolling into Charlottesville and attracting an A-list of tenants even before buildings are complete. Officials with Stony Point Design/Build announced that two national firms have signed leases for its redevelopment of the Monticello Dairy on Preston Avenue, known as Dairy Central.
The thick brick walls and facades with columnar treatments have gone from hosting the creation of daily confectionaries and delights to serving as the new home of Washington, D.C.-based CoStar Group, the largest digital real estate company in the world and San Diego, California-based Dexcom, a world-leading provider of continuous glucose monitoring systems for use by people with diabetes.
The building is expected to open this year.
The CODE Building will feature mall-level common areas and a pedestrian pass-through from the mall to Water Street as well as public common areas built to Leadership in Energy and Environmental Design (LEED) standards for energy efficiency with green roof terraces, joint work spaces, restaurants and a beer tap.
Charlottesville-based companies Quantitative Investment Management, Investure and Felton Group have signed leases and CODE officials estimate another 40,000 square feet of office space is still available for lease. The building is expected to open next year.
Also under construction is 3Twenty3, at 323 Second St. SE, that will feature floor-to-ceiling glass to provide tenants with “dramatic views of downtown Charlottesville and the Blue Ridge Mountains,” according to the building’s website.
The building is designed to have five stories for an estimated 120,000 square feet. It will sit on a four-story, 200-car parking structure. The building will feature a rooftop event space and deck, restaurants, charging stations for electric vehicles and indoor bicycle racks.
In April, law firm McGuireWoods LLP leased 17,218 square feet at 3TWENTY3 for its planned relocation of its Charlottesville office.
A crane collapse on Jan. 6 that broke the leg of one construction worker has delayed construction at the site, which was expected to be completed later this year.
Also on the drawing board is the headquarters for Charlottesville-based Apex Clean Energy, a 187,000-square-foot, seven-story headquarters at 100 Garret Street, a few blocks from Charlottesville’s Downtown Mall.
The building will eschew the concrete-steel-glass construction norm, opting instead for cross-laminated timber beams, and will feature 875 solar panels mounted to the roof and canopies and high-efficiency mechanical systems.
Apex will occupy about 84,000 square feet of the building.
The move toward high-tech offices with high end features was led by other companies, Engel said. He noted that the CFA Institute’s renovations and relocation to the old Martha Jefferson Hospital building near downtown and WorldStrides’ relocation to Water Street in downtown presaged the demand for urban office spaces.
“We’re seeing a mix of local companies as well as companies from out of the area who are finding the city attractive,” Engel said. “It’s a good situation to be in.”
Including leases signed by other tenants, an additional 12,000 square feet of class A office space remains at Dairy Central after Dexcom and CoStar agreed to lease 17,580 square feet. The building will host 50,000 square feet of office space, 30,000 square feet of retail space and an estimated 180 apartments.
For Dexcom, the move will be sort of a homecoming as the company acquired Charlottesville-based TypeZero Technologies in 2018.
“We are thrilled to welcome CoStar Group and Dexcom to Dairy Central,” said Chris Henry, President of Stony Point Development Group. “These publicly traded tech tenants recently establishing a presence in Charlottesville, points to the strength of the local economy and attractiveness of Central Virginia for business growth.”
The buildings are offering amenities that traditional office space does not, including restaurants and food halls, retail shops, brew pubs, communal working spaces for cross-pollination of ideas between businesses and rooftop lounges.
Some offer apartments and all offer onsite parking, most of it below ground or attached to the structures.
Boninti said that, despite its association with violence and racism caused by the Aug. 12, 2017 Unite the Right rally, Charlottesville has a good reputation and that is attracting interest from employers and employees.
“It’s a great community with a lot of attractions and it’s drawing the interest of a lot of businesses. Look at all of the hotels being built,” Boninti said.
“There’s a real positive feeling about the community out there and a lot of companies are interested in the area. But if you don’t have the space available to take advantage of the interest,” he said. “That’s where these buildings come into play.”