New Office Projects Taking Shape around Norfolk, Va.

Low-rise projects in works to head off lack of available space

Armada Hoffler has plans for another office tower at the Town Center, Divaris said, though a site hasn't been chosen yet.

Rooks and her sister, Teresa Gibbs, also with Thalhimer, have been hired by a partnership made up of Armada Hoffler and Richard Wright to market The Fairways @ Lake Wright, a 100,000-square-foot four-story office planned on Northampton Boulevard in Norfolk

Armada Hoffler won't break ground until some tenants commit to the project. Rooks is confident that she and her sister will nab some tenants over the next few months, prompting Armada Hoffler to break ground in 2007.

Though she would not go into great detail, Rooks said portions of Ghent may be redeveloped.

"There's a buzz in Ghent," Rooks said. "There will be more retail and office."

In the Ghent Economic and Market Study, published in September, consultant BPP Associates recommends that the city redevelop the senior center on 21st Street and portions of Monticello Avenue, 21st and 22nd streets for residential, office and retail. A final report is supposed to be published with input from the city, the Ghent Business Association and other stakeholders, though the city hasn't said when it will be ready.

"I feel sure that when I get back to my office Jan. 2, my phone will be ringing off the hook," Rooks said.

Divaris said the challenge is to build and stay within a reasonable rent range. With construction costs skyrocketing over the past few years, new rental space is more expensive, tending toward $30 per square foot in both suburban and downtown markets.

"I do think there is a bar of maximum rent," Divaris said, noting that firms with offices in cities outside the region are willing to pay at the upper end of the scale, from $25 to $30 per square foot, still a bargain compared to how much they pay in Washington, D.C., or Atlanta.

"I don't think there are many tenants willing to pay above $30 per square foot," Divaris said.

Rooks said that costs go up as soon as a parking garage is added and if the building goes up several stories. If developers have to pay $15,000 to $20,000 for each parking space, rents will top $30 per square foot.

Add parking fees and suddenly downtown space isn't so attractive, despite tenants being able to walk to a mall or buy a sandwich in their building.

But Norfolk has big plans - a new business park near Norfolk International Airport and another downtown icon, replete with offices, stores and maybe residences.

The city's economic development authority issued requests for proposals for the development of a business park at Lake Wright East, a 23-acre parcel on Northampton Boulevard owned by the authority. Proposals were due last August.

In addition, the city issued a request for proposals for a mixed use development on 65,200 square feet of city-owned property at the southwest corner of St. Paul's Boulevard and City Hall Avenue. Proposals were due last September. \uFFFC