AmSouth Tower deal sign of bustling downtown office market
Published: July 2,2007
There has been a steady stream of positive real estate news coming out of downtown Jackson lately, and the recent sale of AmSouth Tower, the Capital City’s largest downtown office complex, ranks high among the headlines.
CB Richard Ellis (CBRE) in Memphis recently sold not only the AmSouth Tower in Jackson, but also the AmSouth Tower in Shreveport, La., that city’s largest office complex. The two facilities in total encompass approximately one million square feet. (Both the Jackson and Shreveport properties are actually two buildings each, the original building and the newer tower, for a total of four properties.)
Johnny Lamberson and Frank Quinn led the CB Richard Ellis team. They also led the team that sold the Briarwood One Building, also in Jackson, approximately a year ago for more than $7 million, and are in the process of marketing another multi-million-dollar downtown office building in Jackson.
Two for one
When Lamberson and Quinn began the process of marketing the AmSouth properties, the Shreveport facility actually drew the first interested investors. The two men were inundated with qualified offers from potential investors from across the nation interested in the property, which encompasses 494,922 square feet.
CBRE represented Plaza Investments I, LLC, Plaza Investments II, LLC, and Plaza Investments IV, LLC, in the AmSouth portfolio deal. The interested buyer was Hertz Investment Group, based in Santa Monica, Calif.
Negotiations went so well, and, seeing its enthusiasm in the Shreveport property, Lamberson and Quinn approached Hertz Investment about the Jackson property. It expressed interest in that 485,153-square-foot property, too, and with that, the two-city deal was consummated.
Terms of the AmSouth portfolio transaction were not disclosed.
Lamberson said, “There is just a tremendous amount of capital trying to invest in these types of buildings. The market is extremely competitive.”
Quinn added that the primary markets are especially tight, so investors are now looking at secondary and tertiary markets, which is Shreveport’s category. He said investors are attracted by an improving economy, and foresee companies expanding in the near-future, thus increasing occupancy. Because the markets are smaller, Quinn said investors are often seeing better potential return in the smaller markets than in the larger ones.
Feel good story
The men said it is more than just a rebounding economy prompting interest in Jackson property. And it is not just the attractiveness of the properties, either. Rather, it is the appeal of the properties coupled with the positive activity in the surrounding area.
Lamberson and Quinn said it is not enough to have only a knowledge of the properties being marketed when meeting with potential investors/buyers. One must also have a good story to tell about the market and submarket, as well.
Both men, who have more than 25 years of combined real estate experience, said it has never been easier to tell a good story about Jackson and the city’s downtown. While the greater Jackson communities such as Madison, Ridgeland and Pearl continue to see growth, the downtown submarket is in the midst of what can be described as a renaissance. The Pinnacle mixed-use development, King Edward renovation, new convention center that is currently under construction and other positive happenings are helping push the downtown area.
They gave a lot of the credit for all of this positive activity to the area’s leaders and professionals. The two are constantly in markets across the Southeast, and both said that they enjoy coming to Jackson as much as any other. They said having firms such as Parkway Properties, EastGroup Properties, The Mattiace Company and other agencies and leaders such as Leland Speed make Jackson a great real estate market.
“There is a real sense of community there,” Quinn said.
And both admitted that coming to Jackson was special for another reason — it is home. Quinn is from Jackson, Lamberson is from Greenville, and both have immediate family in the greater Jackson area. Thus, it is especially fulfilling for them to see the Capital City and other Mississippi communities continue to develop and to play a role in it.
“I would guess 50% of our job is counseling,” Lamberson said. “We spend a lot of time getting owners prepared to sell, trying to educate them on how to enhance the value of their property. We evaluate the property, and often we’ll say, “Hey, your property is worth this today. But if you do this, this and this, it would be worth this much in the future.’”
With the news continuing to be positive out of the greater Jackson area, both Lamberson and Quinn see more successful deals struck in the future. At press time, the unspecified property they were marketing, which is also in downtown Jackson, had been on the market for approximately three weeks. They were hoping to have a buyer in approximately two weeks from press time.
Contact MBJ staff writer Wally Northway at email@example.com.
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