Citigroup Inc. is preparing for an estimated $19 million renovation to the space it leases at the campus it sold in a sale-leaseback in Flagler Center in South Jacksonville.
A Citi spokesperson said July 9 that the permits are related to the consolidated space that Citi will lease and occupy.
The city is reviewing permit applications for work on all three floors of Building C and on the first floor in Building B.
“The Building C project is the larger of the two permits,” the spokesperson said.
“The work in Building C involves modernizing the workspace with an emphasis on an open working environment, sustainability, and wellness for our employees.”
That project is estimated at $18.83 million.
Building B work includes installing doors and dividers on the first floor to separate the Citi space from future tenants on the second and third floors at an estimated $190,246.
Cross Management Corp. of New York City is the construction management company.
ASD | SKY of Tampa is the architect. Goodson, Bergen & Associates of Jacksonville is the consulting engineer. Meskel & Associates Engineering of Jacksonville is the private provider for plan review.
A business decision
New York City-based Citigroup said through the spokesperson Jan. 23 that the sale Jan. 17 of its Jacksonville office campus was a business decision, and not a cut in its employment as workers continue hybrid schedules.
“As part of this agreement, Citi will lease back a portion of the facility from the new owner. While our employees continue to enjoy a hybrid working environment, this decision allows us to rationalize our space, creating an optimal work environment when our teams are in the office together.”
Citigroup, which has operated a major credit card operations center in Jacksonville for almost 30 years, said it will retain its 4,000 employees here “with plans for growth in the next two years.”
Citigroup said it will continue occupying about 250,000 square feet of office space.
Citigroup will lease Building C and the first floor of Building B for 15 years, with four five-year renewal options, lease agreements show.
Colliers handling leasing
Chuck Diebel at Colliers International is handling leasing for the property.
All of Building A and two floors of Building B are available for lease, while Building D is an amenities building. The available leasable space is about 230,000 square feet, according to a Colliers brochure.
The property is at 14000 Citicards Way in Flagler Center, which is south of Old St. Augustine Road between Interstate 95 and Philips Highway.
The campus, built in 2005, comprises four buildings that total more than 530,000 square feet of space with 2,652 parking spaces.
Citi will retain its name on the building it occupies.
The Wideman Co. of Orlando announced Jan. 22 that it bought Citigroup’s 73.4-acre campus. The recorded deed shows a purchase price of $24 million and a mortgage of $27.81 million.
The Wideman Co. announcement said that the three three-story buildings, totaling 491,386 square feet, are used for offices, and the fourth is an amenity center with a food hall, outdoor dining and a conference facility.
Citigroup has operated a major credit card operations center in Jacksonville since 1997, when it bought AT&T’s Universal Card business.
In 2005, Citi Cards moved its operation from Deerwood Center to a new campus in Flagler Center.
The buyer of the Jacksonville Citigroup campus is focused on its inherent use.
“We bought it as office real estate and intend to steward the asset as the high-quality class A office asset that it is,” said Harrison Loew, director of acquisitions with The Wideman Co. of Orlando, in a Jan. 24 interview.
The campus, he said, “is uniquely positioned” and specific to The Wideman Company’s strategy.
He said Wideman has focused heavily on office investment the past two years.
“Over the last 18 to 24 months, we have been able to engage in an unusual market dynamic that has been developing since 2020,” he said.
“Today there is significantly less competition for this type of product in what we see as fundamentally sound markets,” he said,
“With a credit tenant like Citi involved, that’s a good feather in your cap and something that fits with the rest of our portfolio,” Loew said.
He said there is a smaller field of investors in suburban office projects. As employers sent workers home during the pandemic, many companies found they needed less space to lease and downsized.
“They’re just not as convinced that this product type is as viable in the long term,” Loew said of some investors. “The Wideman Company was built on it.”
The Wideman Co., an affiliate of Susquehanna Holdings Ltd., is a real estate investment firm that focuses on Class A single-tenant office and industrial assets with large, high-profile, stable tenants.