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BoA building losing tenants

Updated: July 23, 2010 - 1:48 pm

Posted: July 23, 2010

By Philip Newswanger

philip.newswanger@insidebiz.com

The lights are going out on several floors in the Bank of America office tower on Main Street in downtown Norfolk.

Some of the largest tenants in the Bank of America building have fled, most notably to the Wells Fargo Center on Monticello Avenue, enticed by more modern space and larger floor plates.

Whether these companies were lured by lower than market rents isn't known. Even the asking rents - which is the published rate, not the actual rate - are listed as negotiable, according to a flier on the Wells Fargo property.

The asking rent for the 340,000- square-foot Bank of America Center, built in 1968, is $21 a square foot, though offers of $17 per square foot have surfaced recently.

Owner Gramercy Capital Corp. was contacted by e-mail for comments on how it plans to reposition its building to attract new tenants. But no one responded by press time.

Although considered a Class B property, one step down from the top of the line, the center is located on Main Street, has its own parking garage and is close to the city's amenities.

Gramercy Capital is expected to pour millions into refurbishing the building in an effort to attract tenants, but that has not been confirmed yet.

By the end of the summer, more than 150,000 square feet of space and 10 floors will be empty in the 21-story building.

The largest tenant in the building is Maersk Line Ltd., which occupies almost four floors.

Other tenants include Bank of America, UBS Financial Services, the Hampton Roads Community Foundation, Boyd & Boyd, Sterling Benefits and the law firm of Crenshaw, Ware & Martin, which occupies the 12th floor.

Some of the center's oldest tenants have exited or are about to exit. S.L. Nusbaum Realty Co., a mainstay in the center, has set up shop in the $150 million Wells Fargo Center on Monticello Avenue, which was developed by Nusbaum in partnership with the city of Norfolk.

The entire project features two parking garages, apartments, shops at street level, a 250,000-square-foot office tower anchored by one of the garages, and a light rail stop.

The city of Norfolk financed the parking garages, as well as paid for the utilities to the property and granted the land to the developer without cost.

Norfolk's financial stake was $53 million while Nusbaum's portion was $97 million.

Two other Bank of America tenants also have been part of the exodus.

The law firm of Willcox and Savage will occupy 42,000 square feet on the top two floors of the tower.

The accounting firm of Goodman & Co., still in the Bank of America building, will lease 7,300 square feet on floors 12 and 14 of the Wells Fargo Center, beginning in October.

According to CoStar, which tracks the commercial real estate industry, the vacancy rate for Class A space in downtown Norfolk is 19 percent, followed by Class B space at 15 percent vacant and Class C space with an 11.2 percent vacancy rate.nib

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