Given Its New One, Bank HQ Trades at Discount

NASHVILLE-A fund of Sterling American Property Inc. and several private local investors are the new owners of the SunTrust Bank Building, a prominent Downtown landmark here that is losing its namesake. The new owners now have 2.5 years to backfill the bank’s 120,000 sf while also keeping happy the other tenants in the 250,000-sf Downtown office building. For the risk, the new owner picked up the building at the discounted price of $14.5 million or $58.25 per sf. Rob Lowe of Colliers Turley Martin Tucker, who brokered the acquisition and also is a member of the investment group, tells GlobeSt.com the purchase is an opportunity play. He says Downtown Nashville is exhibiting strong residential growth and there is a strong resurgence of people coming back to Downtown as a place to live. Among that growth is the 31-story Viridian condominiums rising next to the L&C Tower.In addition, Lowe says Downtown has seen $1 billion of public and private investments, and there are plans for more. The new projects include a new symphony hall, a new federal courthouse, a new city courthouse and a new central library. There is also discussion of relocating the city’s triple-A baseball team to a new ballpark in the Downtown area.”We think that will mean the office tenants will remain and those that are not Downtown will consider it as a true option,” Lowe says. “There’s no other significant near-term rollovers in the building, so successfully managing the [SunTrust] transition will make the difference in that investment.”Located at 201 Fourth Ave. N, the Sun Trust Bank building was completed in 1968. The building is currently about 87% occupied. The seller, Harbor International of Norfolk, VA, paid $8.6 million for the building five years ago and proceeded to invest several million dollars in the building but ultimately could not convince SunTrust to stick around. Lowe says the new ownership plans to make several million dollars’ worth of additional capital improvements in the property.SunTrust’s new headquarters got under way in May at 401 Commerce St., next to the Ryman Auditorium. The $60-million, 338,000-sf building will be completed in late 2007. SunTrust will move in to its 150,000 sf in 2008. Eakin Partners is the developer. Rick Helton, managing director of ProVenture Commercial, represented Harbor in the sale of SunTrust’s current headquarters.