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Original Owners of City Center at Oyster Point Cash Out and Pass the Baton to a New Group

NEWPORT NEWS, VA—The original developers of City Center at Oyster Point have just sold their ownership in the project for $69 million.

By Erika Morphy | erikamorphy | | Updated on July 19, 2016
Patricia Earnest Patricia Earnest

NEWPORT NEWS, VA—The original developers of City Center at Oyster Point, as well as joint equity partner Northwestern Mutual Real Estate, have just sold their ownership in the project to a new group, which consists of some of the same faces as the original group of developers, plus several new players. This buying entity, called Pointe Hope LLC, paid $69 million for the stake in the 574,466-square foot project, which still has plenty of development potential. It secured $54 million in  acquisition financing from the Peninsula Division of TowneBank and Union Bank & Trust, as well as additional funding for TIs and commissions.

When City Center at Oyster Point launched in 2000 the founding partners and the city of Newport News envisioned the $200 million project creating a downtown cluster of buildings that would house the area’s accounting, banking, finance, law, architecture, technology, defense government and healthcare operations. There would also be restaurant and retail amenities for these workers.  Three buildings were quickly developed and then in 2003 Northwestern Mutual was brought in as an equity partner.

Today, there are nine properties that make up City Center at Oyster Point. While the office is performing well — it is 92% leased — the retail component has become a repositioning play following the recession’s hollowing out of chain retail and Big Box stores. It is currently 50% leased, and according to Patricia Earnest, senior managing director of Savills Studley‘s capital markets group, the new owners are planning to re-tenant the retail portion with local restaurants and entertainment venues.

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