Doug Childers/Homes Correspondent
The three-story red-brick building at 407 South Cherry St. in Richmond’s Oregon Hill neighborhood doesn’t draw much attention to itself. It sits on a narrow street at the western end of the neighborhood. People walking or driving by are more likely to notice the quaint chapel and original entrance to Hollywood Cemetery, which are nearby.
But the 15,800-square-foot property, home to the Victory Rug Cleaning Co. for more than a century, is at the forefront of a resurgent trend. Two years ago it was converted into 12 condominiums and renamed Victory Lofts.
From the 1980s to the economic downturn of 2008, condominium conversions were quite popular throughout the city. But the number of conversions fell precipitously during the Great Recession as residential construction came to a near halt nationwide.
“Victory Lofts is the first major conversion we’ve had in a while,” said Patrick Sullivan, a realtor with the reRVA team at One South Realty.
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Another recent project has brought eight condos onto the Church Hill property that once housed the Church Hill 2300 Club. “Condos are coming back to life because there’s a huge need for them in the city,” Sullivan said. “And we will see more of that in the future because the housing stock is so low.”
Many of the people turning to condos today are first-time home buyers who are tired of living in apartments but want to stay in town. Empty nesters looking for an urban lifestyle also buy them.
“We’re seeing a lot of apartment construction in the city, but there’s a huge demand for more buying options,” Sullivan said.
This isn’t the first adaptive reuse for the Victory Rug Cleaning Co. building, which was constructed in two phases. (The northern half was built in 1890, and the southern half followed around 1906, when the carpet cleaning business expanded. The halves are architecturally similar, but the first has a bit more detail in the facade in brick.)
The building was first converted into 12 apartments by CMB Development in 2014.
“It was a complete rehab,” Sullivan said.
The project was not an outright financial success, however, because the ample square footage of the apartments — a response to neighborhood concerns during the planning stages — did not translate into significantly higher rents, Sullivan said.
“Prices for good-sized rentals aren’t going up as much as condo prices,” he said. “So it was a perfect project for a condo conversion.”
Units ranged from 726 to 1,733 square feet.
Because the developer used federal and state tax credits for the apartment project, he couldn’t sell the property for five years. As the deadline approached, Sullivan and Lory Markham, an agent at his brokerage, presented the owners of the building with a proposal for conversion into a condo. The development company accepted it.
“To maximize profits and reduce duplication in transfer fees etc, we worked as a team with Guy Blundon of CMB Development on the conversion process, and my real estate team at reRVA handled marketing and sales. “Sullivan said.
Think of Victory Lofts as adaptive reuse 2.0.
Turning the units into condos didn’t take long.
“We’ve made some minor finishing touches to bring it up to condo level, but the overall layout has remained the same,” Sullivan said.
Working with existing tenant leases took a bit longer. “You can’t break leases, so units don’t sell at the same time,” Sullivan said.
Once the units started hitting the market, they sold quickly at or above asking price, with prices ranging from $160,000 to $400,000. Two tenants bought their apartments and remained in the building.
“That’s where the sales went great – 100%,” Sullivan said. “There aren’t many simple products to sell like this in the middle of town. Many people want a simple, flat lifestyle, but they don’t want to be in an apartment. »
Sullivan is now turning her attention to another condo conversion project, this time in Church Hill.
“I’m working with developer Zac Frederick of Crescent Development and 510 Architects to convert the former car dealership to East Broad and 21st condo streets, with new townhouses all around,” he said.