COVER STORY, JULY 2008

SOUTHEAST OFFICE SPOTLIGHT
Premier office projects are under way across the region.
Jia Gayles

Southeast Real Estate Business explores the development of three new office projects. Two of the three buildings, Phipps Tower in Atlanta and the office building at 1812 N. Moore St. in Rosslyn, Virginia, are seeking LEED certification. The tenants of the third building, Main & Gervais in Columbia, South Carolina, are all also investment partners in the office project.

Main & Gervais
Columbia, South Carolina

Main & gervais in Columbia, S.C.

The new Main & Gervais office tower in downtown Columbia, South Carolina is already causing tidal waves across the city.

“The project was virtually full from day one,” says John Holder, chairman and chief executive officer of Holder Properties. “The positive is that businesses are expanding and growing in Columbia and moving into this project…the negative is that they are coming out of existing downtown buildings.”

The new $56 million, 18-story project is located directly across the street from the capital at the northwest corner of Main and Gervais streets and will feature 200,000 square feet of Class A office space. Construction will begin this summer and completion is slated for early 2010.

“Columbia is a fairly steady market,” Holder says, “Its vacancy rate got up to around 15 percent, but it’s dropped to 10 or 11 percent, especially in the Class A sector.”

The tenants include Edens & Avant, the McNair Law Firm and the National Bank of South Carolina (NBSC), which are all investment partners in the project with Holder Properties. The project was concieved after Holder discovered Edens & Avant was scouting a new headquarters location. Holder purchased the future project site, which was operating as a surface parking lot, from Edens & Avant.

“We realized that we needed more than just [Edens & Avant] or it was going to be prohibitively expensive,” Holder says. “NBSC and McNair were looking...It was a chance for each of these tenants to be an owner of a building.”

The project was designed by Durham, North Carolina-based Duda Paine Architects, and the general contractor is Holder Construction.

NBSC will have a ground-floor retail branch and an upscale restaurateur is currently being sought. There will also be health club and a 600-car parking garage.

Phipps Tower
Atlanta

A joint venture is developing the $175 million Phipps Tower in Atlanta.

Atlanta is adding another jewel to its opulent crown. Crescent Resources and financial joint venture partner Manulife Financial are developing Phipps Tower, a $175 million, 20-story office tower in the Buckhead district.

The project will add 486,000 square feet to the market and is situated on a corner lot at the intersection of Peachtree and Lenox roads and Phipps Boulevard.

“It has the attributes of location advantage,” says John Bell, senior vice president of Crescent Resources. “It’s the only site in Atlanta that has a Peachtree address, direct access to the Buckhead Loop and pedestrian access to Phipps Plaza and the Ritz-Carlton.”

The building will seek LEED certification and is projected to open in January 2010. “Tenants are demanding LEED certification,” Bell says. “It’s critical for the long-term success of the building.”

Little and Associates designed the project, which features a modern, sleek silhouette. Brassfield & Gorrie is the general contractor.

Phipps Tower will include a terraced garden plaza, a fine dining restaurant, café, convenience shop and a 1,100-car parking garage.

“Tenant interest has been strong,” Bell says. “We have roughly 400,000 to 500,000 square feet of proposals in the marketplace.”

As for competitors who are currently dotting Atlanta’s skyline with a cranes and scaffolding, Bell says, “There is a lot of product coming online, but we are not delivering until January 2010. We’re excited about the opportunities that will exist in that timeframe…and there are a fair number of prospects in the market.”

1812 N. Moore Street
Rosslyn, Virginia

Monday Properties is developing the 580,000-square-foot 1812 N. Moore Street in Virginia.

Washington D.C. has a height restriction on buildings that constantly drives up overhead and sends many business owners across the Potomac River toward newer and more economical options, like the soon-to-be-constructed 35-story 1812 N. Moore Street.

“Operating costs have dramatically risen during the past several years,” says Tim Helmig, executive vice president and chief development officer of Monday Properties. “Leasing 200,000 square feet in a prime [D.C.-area] location as opposed to leasing space in our Rosslyn building is a difference of more than $100 million over a 15-year period.”

The office project will feature 580,000 square feet and will be the tallest building in the Washington, D.C.-area. Monday Properties is seeking LEED-Platinum status.

“It will be the first LEED-Platinum in the Commonwealth of Virginia,” Helmig says. Construction began in May, and the building is slated to deliver in 2011.

Ironically, the existing 11-story building on the site was built by Monday Properties in 1960. At the time, it was the first high-rise building in Rosslyn. The property is located between 19th Street North and Wilson Boulevard, directly above the Rosslyn metro station.

“Arlington County has created a policy to create its highest density in and around significant metro stations,” Helmig says. “In the two blocks surrounding the station, the Arlington County Board approved for greater heights than the [usual] 300-foot maximum.”

Tysons Corner, Virginia-based Davis Carter Scott is the project architect, and the general contractor is yet to be named. The project will also feature 11,000 square feet of retail and 480 parking spaces.

“The D.C. market is a supply constrained area…it’s still a robust and healthy environment,” says Helmig. “…There is a lot of tenant interest. People call Rosslyn the ‘front yard of the district.’”

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