Gramercy Property Trust Inc. is reconfiguring the former Bank of America office park to make it more attractive to lease – and to sell.
That’s according to an analyst’s report after the New York-based real estate investment trust announced late Tuesday it has signed four leases for the bulk of the office park, including one to move Aetna from Downtown.
Gramercy also said Tuesday the campus was no longer part of a master lease it has with a portfolio of Bank of America properties.
“The diversified tenant base, longer lease term, and being unencumbered from the master lease, makes the asset more desirable and likely more saleable,” said a research report Tuesday by an analyst with the Stifel Equity Trading Desk.
It was titled: “GPT Embraces Its Ingenuity At BofA Jacksonville Campus.”
The report, by analyst Simon Yarmak, rated NYSE-traded GPT a buy.
The 90-acre campus is highly visible – north of The Avenues mall between Interstate 95 and Southside Boulevard. It was developed in 1989 for Jacksonville-based Barnett Banks Inc., which was acquired by Bank of America through mergers.
Gramercy envisions being able to parcelize the property, according to a lawyer representing the firm at a Jacksonville Planning Commission meeting.
The commission approved modifications to the property’s Planned Unit Development to amend the site plan to reflect current structures and to modify signage and the permit parcelization.
Gramercy said the property consists of 10 buildings that total about 1.2 million square feet.
A plan shows six office buildings; an office amenity building with a café, fitness center and conference rooms; two parking garages; a child care center; and a former 22,000-square foot school building that also is for lease.
Gramercy is rebranding the park as Gramercy Woods and also intends to develop another parking garage.
Gramercy President Benjamin Harris said in a release Tuesday the company is making a significant long-term investment in the property and in the Baymeadows area submarket. The release referred to “transformational activity.”
The company said it has signed leases with four tenants for 1.1 million square feet of the campus, leaving just 114,742 square feet available for rent in two buildings.
Gramercy didn’t identify the tenants in the news release, but its lease descriptions indicate Bank of America will occupy 822,500 square feet at the campus on a 15-year lease and another 49,000 square feet with a seven-year lease.
Buildings 100 and 700 are available for lease to multiple tenants.
Aetna will occupy 132,000 square feet among five floors in Building 100 on a 10-year lease as it relocates from Downtown Jacksonville by August 2017.
Tax Defense Network rents about 50,000 square feet among the top two floors at Building 100.
Another professional services firm will lease 50,000 square feet in the five-story Building 700.
All that will remain for other tenants will be about 68,000 square feet on the first three floors of Building 100 and almost 47,000 square feet on the second and third floors of Building 700.
Gramercy said the average lease term among tenants at the campus, weighted by tenant size, now is 14 years, up from 7.4 years.
Yarmak wrote the transactions demonstrate Gramercy’s ability to re-lease and re-tenant complex office campuses.
Gramercy’s April 2015 investor update said the Bank of America Jacksonville properties consist of the 10-building operations center and a 6,700-square-foot office building.
For Bank of America, the property comprises a data center, technology testing lab, call center, mortgage processing, government lending and statement rendering. Gramercy considers the campus critical for the bank.
The investor update shows that Gramercy’s nationwide Bank of America portfolio includes 67 properties across 10 states comprising 3 million square feet of space.
Gramercy has solely owned the Jacksonville campus since 2012.
A team at Colliers International Northeast Florida is representing Gramercy Woods.
Colliers Principal Chuck Diebel said Wednesday he has seen unprecedented activity among companies looking for large blocks of space. Prospective tenants are coming from within and outside the market, he said.
“Jacksonville’s business climate is very desirable,” he said, adding the activity is the busiest he’s seen during his more than 30 years in the office leasing industry.
He said Gramercy is in negotiations with several large users, but declined to identify them.
“The campus was put on the market at the right time,” he said.