Virginia Beach Rides the Wave of Real Estate Placemaking

• Waves of development: Artificial waves for surfing have grown in popularity, creating opportunities for the real estate around them.

• Institutionalized buildings: Norway’s sovereign wealth fund has invested in a Manhattan office building, possibly signaling growing interest in CRE from institutional investors.

• Converting Boston: Boston is a bit late to the office to residential conversion party but a number of new projects show that it is now jumping into the trend.

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Development

Virginia Beach Rides the Wave of Real Estate Placemaking

Virginia Beach has always had the culture but not the waves. For decades, the boardwalk filled up with beach umbrellas and surf fans flocked in for the East Coast Surfing Championships, only to be let down by flat spells that made reliable surfing impossible. That changed this summer with the opening of Atlantic Park, a $350 million oceanfront development anchored by a Wavegarden Cove surf lagoon capable of generating 1,000 waves an hour. For a city that has lived with unpredictable surf, the engineered consistency is a game-changer.

But the lagoon is about much more than sport. By anchoring a new district of apartments, retail, restaurants, and a reborn amphitheater, Atlantic Park is a civic investment designed to keep the city humming well beyond tourist season. It’s a modern twist on the old logic of anchor amenities—golf courses for lifestyle communities, ski slopes for resorts, department stores for malls. Here, the surf lagoon is the magnet. It creates predictable demand, supports higher rents, and gives promoters and retailers confidence that crowds will show up, no matter the weather.

That same formula is spreading across the country, from Florida’s Gulf Coast to Texas and beyond. Surf parks are fast emerging as the next frontier in placemaking, blending lifestyle with economics in a way that traditional anchors can no longer guarantee. Atlantic Park shows what’s possible when a city invests not just in infrastructure but in experience. The question now is whether this wave of surf-anchored real estate will roll across more markets—or if Virginia Beach has simply caught lightning in a bottle.

Overheard

Institutional Capital Finds Its Way Back to Manhattan Offices

The world’s largest sovereign wealth fund, Norway’s, is back in the CRE game. The fund plowed $543 million into a Manhattan office tower, taking a 95 percent stake in a building on Avenue of the Americas. This move signals renewed confidence in prime office assets, as institutional investors creep back into markets they had mostly abandoned in recent years.

Sovereign wealth funds have trimmed their exposure to real estate in recent years, shifting toward infrastructure and alternatives, as declining valuations, rising interest rates, and mounting remote-work uncertainty weighed on fundamentals. But now, as brokers report rebounds in leasing activity and a shortage of well-located assets, these funds are reasserting themselves. Norway’s reinvestment reflects a broader recalibration: exposure that once dwindled is now being rebalanced as opportunity replaces hesitation.

If sovereign funds like Norway’s decide that office real estate, especially in ultra-core markets like New York, is back in favor, it could ripen the sector for a broader comeback. Their capital has the power to reset valuation benchmarks, spark confidence among peers, and unlock new development or conversion deals. In short, their return could be the signal that office real estate’s long winter is finally turning into spring.

Boston Office to Residential Pilot Delivers Lessons for All Cities

Boston’s Office-to-Residential Pilot Program is beginning to show results, with the first project at 281 Franklin Street welcoming residents this week. The modest six-story brick building has been reborn as 15 apartments, three of them income-restricted, through a conversion that reused much of the original structure, electrified its systems, and added sustainable features like secure bike storage. It marks the first completed project under Boston’s 2023 pilot, which offers developers unusually strong incentives—29 years of 75 percent property tax abatements and fast-tracked approvals—in exchange for affordability commitments and adaptive reuse.

The program is already fueling a pipeline of 21 buildings and nearly 800 new apartments, including larger projects like the 77-unit conversion on Summer Street in Fort Point and smaller ones in the Bulfinch Triangle and South End. Together, they illustrate how a mix of scales and neighborhood contexts can make conversions feasible while boosting downtown vibrancy.

Boston’s approach offers lessons beyond its borders. Office-to-residential conversions are inherently complex, but well-designed incentives, streamlined approvals, and a balance of community benefits can turn policy into lived-in housing. As cities everywhere grapple with high office vacancies and housing shortages, Boston’s pilot shows how aligning developer economics with civic priorities can transform underused buildings into the homes and neighborhoods that urban cores now desperately need.

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Propmodo Daily is written and edited by Franco Faraudo with contributions from readers like you and the Propmodo team.

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