Downtown Jackson’s Regions building has borne many names in its nearly 85 years, but the 18-floor historic landmark may soon be called “home” for renters eager to live downtown.
Developers for several years have eyed the circa 1928 office building for conversion to residential apartments. The challenges of lining up financing and securing the requisite historic and new market tax credits have been too much to overcome. Now, however, the deep-pocketed Hertz Investment Group has entered the picture.
The privately held California-based commercial real estate company has the advantage of already owning the 165,000-square-foot building, as well as more than 20 percent of the remaining office buildings downtown, including the adjoining Regions Plaza.
Jim Ingram, Hertz Group senior vice president and chief investment officer, told a gathering of commercial real estate professionals last week that the company is giving serious thought to converting the 253-foot tall building.
“We haven’t announced it yet but we are strongly considering converting that building to residential,” Ingram said at a panel discussion organized by the Mississippi Chapter of CCIM.
Ingram, a former Parkway Properties executive, said the building’s 9,000-square-foot floor plate makes residential “its highest and best use.”
The building has been out of downtown’s office inventory since Hertz bought it several years ago and moved the tenants into Regions Plaza.
Though briefly named the AmSouth building before Regions acquired that banking company and gave the building its current name, the Capital Street landmark is perhaps most widely known today as the Deposit Guaranty building, a name it held until 1998 when the bank merged with First American National Bank. A year later AmSouth took over First American and gave the building a name that stuck until Regions acquired AmSouth.
Don Hewitt, principal of Jackson real estate investment firm Advanced Technologies Building Solutions, sought to convert the Regions building to apartments but gave up the quest after encountering difficulty persuading the Jackson Redevelopment Authority to issue $5 million in tax-exempt urban renewal bonds for the project. He said Monday he expects Hertz will do well with the conversion, considering the unmet demand for downtown apartments.
When he pursued the conversion project last year, the market had pent-up demand for 700 units, Hewitt said.
“We felt it would be dynamic based on where the building was located” in the center of the Central Business District close to the Capitol.
Hewitt said converting the building and bringing hundreds of new residents downtown should invigorate downtown at a time it is in sore need of a boost. “Momentum is starting to stall there,” he said. “And that is the worst thing that can happen with a downtown.”
Most immediately, a residential conversion the size of the Regions building should help to stabilize downtown’s retail market, he said.
Hertz should be a strong candidate for gaining Jackson Redevelopment Authority approval for urban renewal bonds. “They will love it because Hertz is, of course, investment grade,” Hewitt said.
Further, the owner has the advantage of converting a building that has been well maintained over its long life, he added.
“The building is in great shape.”