Riverview Tower was originally constructed in 1985 at 900 South Gay St. The building occupies a prime site across the street from the city-county complex and two blocks from a federal office building. Four major tenants lease approximately 44% of the available space. They are Alcoa, Inc., formerly known as Aluminum Co. of America (Alcoa); Branch Banking & Trust Co.; Woolf, McClane, Bright, Allen & Carpenter PLLC; and Lawler-Wood LLC.
According to SEC filings, Alcoa, the world's leading producer of primary aluminum, fabricated aluminum and alumina, leases 55,780 sf for an annual rent of $819,929 under a lease that expires in July 2012 with no renewal options available. BB&T, a financial holding company, leases 47,562 sf for an annual rent of $700,965 under a lease that expires in December 2013 but includes six five-year renewal options.
Woolf, a law firm that provides legal services principally in the Southeastern US, leases 25,775 sf for an annual rent of $355,696 under a lease that expires in September 2007. The lease includes one five-year renewal option. Lawler, a commercial real estate developer, leases 16,666 sf for an annual rent of $241,663 under a lease that expires in December 2008 and includes no renewal options.
HPT Management Services LP, an affiliate of Behringer Harvard REIT I, has the exclusive right to manage, operate, lease and supervise the overall maintenance of the building. Certain of its on-site management and leasing services have been subcontracted to Lawler-Wood LLC, the original developer of the property and the property manager since it opened, and an affiliate of one of the sellers.
Behringer Harvard SVP Jason Mattox tells GlobeSt.com that current local market office vacancy is about 9%. "This is, we believe, one of the two best assets in the market, and there has been no overbuilding, so even though we are leased up a little better than market we feel confident we will be able to retain tenants," he says. "This is a good long-term play."
Behringer Harvard REIT I Inc. is a public, non-traded REIT. The term of the fund is eight to 12 years. All of the properties in the fund are either pure office or flex-office space, says Mattox.
"As a class A core asset in a rapidly growing city, Riverview Tower should provide our REIT investors with an opportunity to capitalize on stabilized current yields," says Behringer Harvard chief executive Robert Behringer. "We also expect this property to benefit from improving market fundamentals leading to greater resale value at the end of our holding period."
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