by Bradley Parsons
Staff Writer
Market research commissioned by the City reveals in downtown’s Central Business District a rebounding commercial real estate market and an active residential market fetching prices above $30 a square-foot in some cases.
The market area analysis, performed by local firm Broom, Moody, Johnson and Grainger, Inc., is intended to aid the City as it looks for a fair asking price for the Haydon Burns Library. The City is interested in finding a developer for the 120,000 square-foot building sitting on a little more than an acre in the center of downtown.
The firm estimated an empty Haydon Burns would sell for $4.5 million, including the land. Noting the centrally-located building’s proximity to just about everything downtown and the City’s commitment to planned development in the area, the firm said the distinctive building’s best use would be office development. Due to the building’s location, the firm’s analysis drew from real estate deals spread across downtown. The analysis reflects both commercial and residential development and offers a look at the downtown market as a whole.
Broom Moody CEO Ronald Murray said he had to pull data from a diverse listing of properties, because the library is such a unique design.
“Haydon Burns is a real unusual building. It’s an unusual design and it’s difficult to find an exact copy that has recently sold,” said Murray. “We looked at some commercial buildings downtown with different uses.”
Speculative investors look like the biggest per-foot spenders, according to the research. O.U.R. properties was looking for an investment in 2001 when they paid $32.41 per square-foot for the Jones Brothers Building on 520 Hogan St. Broom, Moody said the 16,664 square-foot building’s value was enhanced by an $80,000 option held by the owner on an adjacent parking lot with 18 spaces.
The Holmes Block on Bay Street had sat similarly dormant until recent renovations began. Protokore, Inc. bought the 107-foot long stretch of two-story buildings on Bay Street in 2001 for $625,000, according to the analysis. That works out to $38.51 a square-foot for the 16,230 square-foot building.Unlike the Jones Brothers, the Holmes Block is handicapped by a lack of on-site parking.
Further west on Bay Street, the four-floor Drew Building fetched $89 per square foot when it sold in February to Cady and Cady Associates, Inc. The building’s value could climb to more than $136 per if the owner follows through on $600,000 in proposed renovations, including upgraded electrical, plumbing and air conditioning and the installation of an elevator, according to the analysis.
Broom, Moody estimated those improvements would allow the owner to charge more in rent, despite a lack of on-site parking. The firm thinks office space in the building could go for $19 per square-foot once renovations are complete.
The firm’s analysts found the sales of 11 E. Forsyth Street’s Lynch Building and Adams Street’s Carlington Building, both to Vestcor, to be the most comparable buildings, in terms of size, to the Haydon Burns Library. However, the Holmes Block and the W.A. Knight Building deals were estimated to be the best indicators of the old library’s market value.
Those buildings ranged from about $25 to about $52 per square-foot, slotting Haydon Burns’ value at around $35.