For years Markel Corp. has been the Houdini of Richmond-area businesses. By playing to a tricky and complicated niche market of insuring things as varied as oil tankers and surgeons' hands, the Henrico County-based specialty insurance company has defied recession. Its stock typically trades in the $300- to $400-per-share range.
Now the company has a new goal: to turn around troubled real estate projects, such as the mixed-use West Broad Village. Markel has acquired a 50-percent stake in E/Class Advisors, which bought into the Village project in late December and has been working to make it go. The company is now Markel/Eagle Management LLC, its president, Stan Manoogian, says.
The $300 million West Broad Village seemed to hit all the right notes when the development started — townhouses and 339 apartments next to trendy stores and restaurants such as Whole Foods Market, Dave & Busters' and Kona Grill. Its new-urbanist, pedestrian-friendly layout would contrast with the car-centric suburban sprawl that mars most of Short Pump.
But the project got hammered by the recession and management issues, resulting in millions of dollars in property liens, lost sales and unleased space. “We spent a whole year doing due diligence,” says Manoogian, who adds that he always thought the location and prospects were excellent.
Since buying in six months ago, E/Class Advisors has sold 75 condos and leased 132 apartments along with 85,000 square feet of commercial space. Now with Markel's expertise and deep pockets, Manoogian says, the project's recovery should accelerate.
The Markel venture is searching the mid-Atlantic for more real estate turnaround opportunities. When it comes to such projects, Manoogian says, Markel is positioning itself similar to Warren Buffet's Berkshire Hathaway, which specializes in acquiring promising but obscure gems and holding on for the long term.