The investment is a value-add play. The building 73% leased, with several leases set to expire in 2006. The current vacant space has been empty for about 18 months. Gibraltar Partner Kurt Fisher tells GlobeSt.com he is planning to invest an additional $1.5-million improving the property, and has changed the name to Gibraltar Tower.
The concrete building was built in 1910 on one-eighth of a block at 1525 Fourth Ave., which is between Pike and Pine Streets in the retail core. It shares the block with Century Square, a 30-story office tower built in the mid 1980s.
Office tenants enter the building on Fourth Avenue, next to Abercrombie and Fitch across the street from Westlake Park. An escalator takes them to a second floor. Gibraltar is planning a renovation of the second floor that will include a new lobby for office tenants and, possibly, additional retail.
The Third Avenue side houses the three current retail tenants, including Natureway, Cingular and the International Cigar Shop. Fisher says the cigar shop is well known for having the only humidor in Downtown. "The owner is known by all the hotels in town," he says. "You see limos pull up all the time."
Century Tower is Gibraltar's first foray into the Downtown office market, and it should turn out nicely if Fisher and company can renew or replace existing tenants and attract new ones. The building has 5,200-sf floor plates, which appeal to smaller tenants looking for a full-floor presence. The full-service asking lease rate is $16 per sf per year, according to Officespace.com.
Fisher says the building will appraise out at over $9 million after it is renovated and leased up. "We've already had an unsolicited $10-million offer from someone who wants to buy it after we complete the turnaround," says Fisher, adding that he isn't making any commitments to sell at this time. "We underestimated the response from potential tenants and the excitement about what we are doing with it."
As the previous owners did, Gibralter is taking the top floor. The seventh floor is leased by an energy management software firm called Verdiem. The sixth floor is leased by a call center. The fifth floor is leased by the modeling agency Barbizon. The third floor is leased by the Davis Wright Tremaine law firm. The fourth floor remains available.
Half of the basement will be leased to an engineering firm for special materials testing, such as soil compaction and the tensile strength of rebar. The other half may become a private club, says Fisher.
CB Richard Ellis brokers Don Fosseen and Lou Senini had the disposition assignment. "It's a class B building that is a little tired," he says. "The new owners will clean it up to a B+."
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