September 2025
After quietly falling into foreclosure this summer, Deep Run III, the former Circuit City headquarters building in Henrico, is back under local ownership.
The 6-story, 355,000-square-foot office building at 9954 Mayland Drive sold on Monday to prolific real estate investor Gagan Marwaha for $31 million.
Known initially for buying apartment buildings in Petersburg, Marwaha and his firm Marwaha Investments more recently have been on an office building buying spree that now spans five deals totaling $53 million in less than 24 months.
Like most of Marwaha’s other office deals, Deep Run III was considered a troubled asset. Marwaha purchased the property from insurance giant Principal, which had been the noteholder when the building’s previous owner, Boston-based RMR Group, defaulted on the loan.
Principal then opted to foreclose and held an auction on the courthouse steps in July, before selling to Marwaha.
The sale closed on Sept. 22 and Deep Run III has been renamed Marwaha Business Plaza, following Marwaha’s pattern of changing the name of his office properties to signify new ownership.
“That’s the biggest change that tenants are excited about. It’s going to be a culture change,” Marwaha said. “We are just going to operate it at a very efficient level and make tenants feel heard and appreciated.”
Gagan Marwaha
The sale and rebrand mark the latest chapter in the building’s up-and-down history. Deep Run III was built in the late 1990s as part of the Circuit City headquarters campus when the electronics retail giant was near its peak. But the company collapsed into bankruptcy about a decade later in 2008, leaving the building empty.
In 2011, local real estate private equity firm Markel | Eagle Partners bought the vacant property at a fire sale price of $12 million. Markel | Eagle then invested around $16 million to upgrade the building, constructed a new parking deck onsite and got it fully leased with tenants like Travelers Insurance, United Bank and anchor tenant McKesson. Markel | Eagle made a successful exit in 2019, selling the property to RMR for $56 million (https://richmondbizsense.com/2019/01/16/former-circuit-city-hq-trades-56m/).
Six years later, when RMR’s loan came due and the value of the property had fallen below the loan amount, RMR let the non-recourse loan fall into foreclosure. That opened the door for Marwaha, who had previously done a deal with RMR for the Parham Place office park (now called Marwaha Business Park) in central Henrico in 2023.
Deep Run III was 84% occupied at the time of the deal with vacancy of 60,000 square feet. Perhaps the biggest risk in Marwaha’s strategy is that McKesson’s anchor lease of 119,000 square feet is coming due in two years. United Bank and Old Dominion Mechanical’s leases are also up in 2027. Other tenants in the building include TForce Freight, the Virginia Cannabis Control Authority, OneDigital and YHB.
That’s where Marwaha sees his opportunity: he hopes to not only renew and retain those tenants but add others. He said his firm is planning cosmetic improvements to the building and will revamp is 7,000-square-foot cafeteria.
And in less than 48 hours after closing the deal, Marwaha said there are already promising signs that his gamble may pay off. He said two requests for proposals from prospective tenants were received by his brokers at Colliers since Monday to potentially fill some of the vacant space.
“The market has responded,” he said.
Deep Run III was most recently assessed at $38 million, but Marwaha thinks it’s worth far more
than that.
“Fully stabilized, it’s worth around $60 million,” he said. “There’s a huge value-add for it.” Marwaha would not comment on how he financed the deal. Principal was represented in the sale by Eric Robison of Thalhimer’s Capital Markets Group.
Asked about his aggressive push into the office market, Marwaha referenced and paraphrased one of Warren Buffet’s investment axioms.
“You buy what people are scared to buy,” he said. “I see opportunity where multi-billion-dollar REITs are getting out due interest rate resets and a change in strategy. “I really think Class A office is trading at a heavy discount. I think office culture is coming back,” he added.
Marwaha’s continued deal flow shows his confidence. His Deep Run III buy came just days after he spent $7 million to buy his second building in the Gateway Centre office park (https://richmondbizsense.com/2025/09/17/local-investor-marwaha-pays-7m-for-another-piece-of-chesterfield-office-park/) in Chesterfield.
And he said he has at least one other sizable local office deal under contract and set to close before the end of the year.
