Downtown Jackson’s Landmark Center has a new owner, having sold at a minimum bid auction for about $2.125 million on July 31 to an undisclosed buyer.
The final bid price surprised the Hertz Investment Group, a prominent downtown Jackson office property owner which had sought to buy the 345,000-square-foot building vacated two years ago by AT&T.
“We had no idea it would trade up that high,” said Jim Ingram, Hertz senior VP and chief investment officer, of the price $2 million-plus sale price. Ingram said he based his lower price estimate on the costs related to refurbishing the more 25-year-old seven-story building, including replacing its roof.
The building at 175 E. Capital St. went to auction after Hertz could not reach a deal with owners U.S. Bancorp.
Ingram said Hertz was among bidders on the Landmark on Auction.com, a national real estate auction website, but came up short.
Hertz, owners of 1.2 million square feet of Metro Jackson office space, wanted to buy the property in hopes of resurrecting an acquisition deal with the University of Mississippi Medical Center. UMMC backed out of a deal to buy the building for between $6.1 and $6.5 million.
UMMC planned improvements such as a new roof for the seven-story structure. In terminating talks with the sellers, UMMC cited unforeseen costs that had arisen with other projects on its Lakeland Drive campus.
Ingram said Hertz Group sees the Landmark and the need to have it reoccupied as hugely important to downtown Jackson. “I was hoping we could acquire it for a price less than $2 million and try to salvage the UMMC transaction,” he said, indicating Hertz would have passed the property on to UMMC at the price it paid.
“The UMMC deal would be huge for downtown,” he said, citing the need to bring more workers into the Central Business District and trim office vacancy rates.
Steve Narish of Auction.com said the Landmark drew about double the three to five bidders similar properties draw. He attributed the interest to the minimum bid auction under which the website sold the Landmark. Unlike a reserve auction, a minimum bid auction offers bidders a high confidence the seller will accept the highest bid.
Auction.com marketed the Landmark for 45 days before auctioning it. Narish said his company can’t reveal the winning bidder until after the 30-day closing period ends on Aug. 31.
The sale price of around $2.125 million included a 5 percent premium to Auction.com, according to Narish.
Hertz had an option to buy the Landmark but let the option lapse after state officials passed over the Landmark as the new Department of Revenue headquarters.
The Landmark carried a price of just over $14 million as recently as 2011.
UMMC officials say they ceased negotiations with owners of the building after other needs arose, including the cost of moving nearly 2,000 unmarked graves from land off Lakeland Drive north of the campus needed for expansion. Also contributing was a decision not to do a public-private hotel project that would have displaced a significant number of UMMC workers on campus and created a needed for additional office space that the Landmark could fill.
The Board of Trustees of the Mississippi Institutes of Higher Learning approved the purchase of the building at 175 E. Capitol St. in November UMMC was looking to pay between $6.1 million and $6.5 million and planned improvements such as a new roof for the seven-floor structure.
Two appraisals valued the Landmark building at $9.5 million and $11 million, respectively.