The former Dairy Bar complex included office space above the restaurant spaces. (Mike Platania photos)
Scott’s Addition’s next major development is getting underway.
Demolition of the former Dairy Bar complex at 1600 Roseneath Road began earlier this month.
The old buildings on the two-acre site are being taken down to make way for a seven-story mixed-use project from local developer Capital Square.
Tang & Biscuit’s space is also on the development site. The shuffleboard bar closed in 2023.
The property was known primarily as the longtime home of The Dairy Bar, a diner that had been in the neighborhood for decades until its 2022 closure. Also part of the plot is 3406 W. Moore St., which is where shuffleboard bar Tang & Biscuit operated from 2018 until 2023.
Those former restaurant spaces will be replaced by 321 apartments and more than 8,000 square feet of commercial space. More than 100 of the apartments will be “apartment hotel rooms,” available as furnished units on shorter lease terms.
Natalie Mason, co-head of development at Capital Square, said demolition began in earnest last week.
“We’ve been progressing the project behind the scenes for some time,” Mason said. “We’d been prepping the building with some remediation last month.”
Capital Square, which also had a hand in the development of The Otis across the street, bought the Dairy Bar real estate for $11.5 million in 2024, the same year its plans for the site were approved by Richmond City Council. The project will feature a wood-frame, five-story structure and about two levels of concrete podium parking, with commercial space on the ground floor.
“We have what we think will be a really great corner food and beverage space,” Mason said of the commercial space.
Capital Square is looking to have the site cleared and ready for vertical construction in spring 2027. Mason declined to share the approximate project cost.
Baskervill is the project architect and VHB is the civil engineer. S.B. Cox is handling demolition. Mason said they haven’t yet selected a general contractor.
A rendering of Capital Square’s planned development at 1600 Roseneath Road. (Courtesy Capital Square)
As it gets its latest project going, Capital Square also recently hit a milestone with Chasen, its recently completed three-building apartment complex a few blocks away in Scott’s Addition, by securing an $86.5 million bridge loan for the property.
Mason said they initially financed the Chasen development with a construction loan from United Bank and recently transitioned that into a bridge loan from an unspecified lender.
Developers will sometimes seek a bridge loan ahead of “permanent financing” on a completed development once it’s “stabilized,” typically meaning a certain percentage of its apartments have been leased. Mason said the bridge financing market has been more competitive in recent years.
“We were able to get more attractive terms doing the bridge. The project has not yet stabilized so we’re not in a position to consider typical permanent financing,” Mason said.
Chasen was completed in early 2026 and is now around 60% leased. It also has about 5,400 square feet of commercial space split across two suites that are also still available. Walker & Dunlop, a national real estate finance advisory firm, arranged Capital Square’s bridge financing, which is “variable-rate, interest-only financing through a private credit lender,” per a Walker & Dunlop announcement.
The Roseneath development is the fourth major development to get underway in and around Scott’s Addition this year.
In the spring Shamin Hotels began work on a 12-story hotel near the intersection of West Broad and Arthur Ashe Boulevard, the former Greyhound station across from The Diamond was cleared to make way for a 600+-unit development, and a pair of out-of-town developers are working on a $144 million project that’ll take up an entire block on Moore Street.
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