A multi-million dollar land sale at the City of Falls Church’s eastern edge has the potential to bring another sizeable mixed-used development within the city proper.
Commercial real estate firm KLNB brokered a $21.25 million sale between 24 Hour Fitness leasees, East Broad Street, LLC and buyer Consolidated-Tomoka Land Company in early June. It granted the new Florida-based owners rights to the three-acre lot once the remaining nine years on East Broad’s term are up.
According to KLNB’s Vito Lupo, who was involved in completing the deal with Consolidated-Tomoka, the owners of 24 Fitness were looking to sell for the past year or so before pulling the trigger on Consolidated-Tomoka’s offer.
Falls Church economic development division chief, Becky Witsman, believes that Consolidated-Tomoka’s purchase of the site is a strategic, long-term investment, and it will let East Broad carry its lease to conclusion before taking the next steps in possibly redeveloping the area. Witsman mentioned that City planning and development service director James Snyder spoke with the buyer, who confirmed it doesn’t have any immediate plans for the property.
“It’s a good piece of dirt and a gateway to the City of Falls Church,” Lupo said, who noted that multiple buyers were interested in the spot, but Consolidated-Tomoka won out because it was able to do the deal in straight cash and at the right price. “From my understanding, [Consolidated-Tomoka] was looking to diversify some income streams around the country and the current property allows some cash flow from them in the midterm with the option to redevelop down the line.”
Witsman noted that East Broad invested a lot of money in improving the building before moving, hence the long-term lease. The money seems to be well spent, as the City assessed the property for just under $19.2 million and it sold for more than $2 million over that.
The lot’s B-3 zoning designation gives it options when — and if — time for redevelopment comes. Witsman mentioned mixed-use is definitely a possibility, and with a three acres to work with, there’s a strong chance that it could be parked underground, if need be.
24 Hour Fitness will continue in operation for the foreseeable future, or at least for the better part of the next decade. But the sale could be a harbinger of things to come for other businesses in the area.
“[The 24 Hour Fitness sale] is the general story of what’s going on in Northern Virginia as far as growth,” Lupo added. “It’s a really strong sub-market that’s going in the right direction and only going to get stronger. With the pricing as strong as it is, it’s giving people some motivation to think long-term about what they want to do with their property.”