Looking for input from commercial and land investors on a site a friend of mine owns in Richmond's East End.
The basics:
• ±1.96 acres across two adjoining parcels • 0.46 AC zoned C-3 and 1.5 AC zoned R-3 • Frontage(~24K cars/day), secondary access (~25K cars/day) • Next door to Walgreens, across from Walmart • 1.5 mi to I-64
What we're trying to figure out: 1. Would you pursue rezoning the R-3 piece to commercial, or market it as is? 2. Express car wash, QSR with drive-thru, medical office, or something else? Which users are most active for sites like this in Richmond right now? 3. Sell as one assemblage or split the parcels?
Full disclosure: I'm helping him figure out the best use for the site. He’s also considering selling as is, so if it fits your buy box, feel free to DM me.
Mostly I'd value hearing how experienced folks would think about this one.
Corey, the split zoning is the tell. 0.46 AC of C-3 is roughly 20,000 SF of dirt. At 4.5 stalls per 1,000 SF you support maybe 8,000 to 9,000 SF of building, which is one pad, not a center. The 1.5 AC R-3 piece is where the value sits, and it is worth materially more entitled than raw.
Run the debt math before you run the user list. At a 7.5% coupon on 30-year amort, the constant is about 8.4%. A 1.25x DSCR floor means every $1 of debt service needs $1.25 of NOI, so a ground lease at $35/SF on 3,000 SF has to clear roughly $105K of NOI against $84K of debt service on a $1.0M loan. That only works if horizontal infrastructure stays under $400K per pad. Signal improvements, stormwater, and curb cuts on a corner like that routinely run $350K to $500K per pad, and that is before the 18 to 24 month S-curve carry on land at 8% to 9%.
Walmart and Walgreens next door means your traffic is already captured. You are a residual parcel, not a destination, and QSR and car wash tenants will price that into rent. Rezone, go pad-ready, ground lease to a credit tenant, and hold LTC at 65% against LTARV at 75% to 80%.
What is his land basis, and does it clear a 1.25x DSCR at market ground rent?