A local real estate investment company has purchased part of the former Circuit City corporate headquarters in western Henrico County after the previous owner gave the property back to its lender.
Marwaha Investments purchased the five-story, 355,000-square-foot office for $31 million, Gagan Marwaha, the company’s owner, said Tuesday. The company is renaming the building at 9954 Mayland Drive from Deep Run III to Marwaha Business Plaza.
Though office vacancies have crept upward in greater Richmond since the pandemic, Marwaha believes the market will rebound, and now is the time to act.
“I believe this is the best time to invest in office,” he said in an interview.
After technology retail giant Circuit City declared bankruptcy in 2008, it defaulted on its lease for all three buildings in the Deep Run office park, which is near Innsbrook.
In 2011, Markel/Eagle, a Richmond-based real estate investment company, bought Deep Run III and invested $16 million, including a new parking garage, fitness center and cafeteria. In 2019, Markel/Eagle sold the building, fully leased, for $56 million to The RMR Group, a Massachusetts-based company.
Earlier this summer, the property’s loan payment came due, and it was above the current market value for the parcel. RMR gave the property back to its lender, the Iowa-based Principal Financial Group. Earlier this year, Henrico County assessed the property for $38 million. RMR did not respond to requests for comment.
Then Principal sold the property to Marwaha. Thalhimer’s Capital Markets Group, a local firm, represented Principal in the sale.
Gagan Marwaha said his company had been trying to purchase the building for a year. Often, large landlords will look for a single tenant to occupy Class-A office buildings, which are the highest quality and in prime locations, such as Marwaha Business Plaza. But Marwaha has found success taking those buildings and divvying them up to numerous tenants.
“It fits our strategy,” Marwaha said of the property.
The building is 84% leased and has 10 tenants, including McKesson, a Fortune 500 medical supply company that has 750 employees there. Travelers Insurance and TForce Freight also lease space there.
In greater Richmond, office vacancy rates have crept up since the pandemic, as companies have let employees work from home. The vacancy rate here rose from less than 10% at the beginning of the pandemic to almost 15% last year, according to a report from Colliers.
But Richmond’s market is outperforming peer cities in the mid-Atlantic, and back-to-office work is showing momentum, said Eric Robison, president of Thalhimer’s Capital Markets Group. Colliers noted that the office vacancy rate plateaued from early 2024 to early 2025. Colliers announced Tuesday that it will handle leasing services for Marwaha Business Plaza.
Marwaha said the office market will eventually come back and that properties are being sold at a discount.
“We’re lucky to be in Richmond,” he said. “It’s a very growing market.”