Hertz Investment Group, which bought the Bank of America Tower in Downtown Jacksonville on Friday for $88 million, has a track record of buying the “best-in-class” assets in smaller markets.
“The building is in very good shape. The strongest regional and national tenants in Jacksonville are in that building, and we want to add to that,” said Hertz Investment Group Executive Vice President James Ingram, the chief investment officer.
Ingram said Hertz Investment intends to make several capital improvements to the building, focusing on taking care of the existing tenants and trying to attract new tenants.
The 42-story Bank of America Tower, the city’s tallest building, anchors the Northbank at 50 N. Laura St. It comprises 696,672 square feet of space, which Ingram said is 69 percent leased.
Ingram said Hertz Investment would like to boost Bank of America’s occupancy to 85 percent within two or three years. The company will manage the building and engaged CBRE Inc. as the leasing agent, led by Lou Nutter, senior vice president of investment properties.
The Santa Monica, Calif.-based real estate investment and management group focuses on downtown revitalization, targeting the best assets in the Central Business Districts of secondary markets.
It bought the 24-year-old Bank of America Tower from Miami-based Parmenter Realty Partners. Of the four Downtown high-rises that have been on the market, it is the newest.
“The building is clearly the best office building in the CBD from a quality standpoint,” Ingram said. “We own the best office properties in the cities in which we are investing.”
That opens the door to more investment in Downtown Jacksonville.
Ingram said the first move will be to take over the Bank of America Tower, while remaining open to future purchases.
“We would, at the appropriate time, make other acquisitions. We like having scale in smaller markets,” he said.
Ingram said Hertz Investment also bid on both the 33-story EverBank Center, which remains for sale, and the Wells Fargo Center, which was sold. Both are Northbank towers.
The 37-story, 650,000-square-foot Wells Fargo Center was sold June 18 for $75.3 million for the building and a parking garage and another $3.7 million for another parking garage. In December, the 20-story, almost 495,000-square-foot Aetna Building on the Southbank was sold for $55.5 million.
Two more Downtown Jacksonville properties also familiar to Ingram are the 22-story one Enterprise Center, owned by the CommonWealth REIT, and the 18-floor BB&T Tower, owned by Harbor Group.
“We know the folks who own those buildings and it is likely that we will be talking in the future,” he said. “We have completed sale and acquisition investments with CommonWealth and Harbor Group in the past.”
Ingram said Hertz Investment might consider EverBank Center in the future, “but not at this point in the marketing of that asset,” Ingram said.
The Bank of America Tower has been for sale at least since February. It last sold in 1999 for $74.7 million. The tower carries a $65.55 million market value, according to the Duval County Property Appraiser’s office.
Jacksonville Tower Associates LLC, in care of Parmenter Realty Partners, sold the building. It was represented by Jubeen Vaghefi, international director of JLL Capital Markets in Miami, and Jeff Morris, managing director of investment sales and acquisitions for JLL Capital Markets in Orlando.
Ingram said Vaghefi and Morris approached Hertz Investment with the property offering. At that point, Ingram said Hertz Investment decided to focus its Jacksonville acquisition efforts on the tower.
The tower was built in 1990 for Barnett Banks Inc., a legendary Jacksonville-based bank that was sold to NationsBank, which then merged with Bank of America.
Darryl Parmenter, chairman and chief executive officer of Parmenter Realty Partners in Miami, said in news release Friday that during the group’s ownership, it made significant improvements.
Hertz Investment says on its hertzgroup.com site that it specializes in the acquisition, marketing and management of “exceptional” real estate properties with a special emphasis on downtown revitalization.
The privately held company was founded by Judah Hertz in the late 1970s. The company owns and manages more than 45 major urban properties, representing more than 13 million square feet of office space in the central business districts of 14 U.S. cities in 10 states.
Hertz Investment’s properties listed on its website include several Class A high-rise office buildings in New Orleans, including the 39-story Energy Centre and 27-story Poydras Center; the 20-story Market Square in Indianapolis; and three St. Louis properties —the 31-story Laclede Gas Building, the 21-story Equitable Building and the 22-story Bank of America Tower.