Near-Vacant Jax Telecom Building Getting a New Life as Apartments

JACKSONVILLE, FL-The 198,000-sf Downtown Telecom Building, which operated as a telecommunications "hotel" during its 46-year existence, is getting a new life as a planned 116-unit apartment complex to be renamed the Metropolitan Apartments. The 60%-vacant building will also retain 80,000 sf of existing telecom tenants during and after the conversion.

Atlanta-based Jax Telecom Partners has purchased the property at 421 W. Church St. for $5.15 million and received an $11-million construction loan from Merrill Lynch Capital of New York and a $3.3-million equity loan from Westplan Investors of Atlanta for the conversion. Bill Leffler, director of L.J. Melody's Atlanta office, arranged the non-recourse, three-year financing package.

Leffler tells GlobeSt.com the name of the Florida seller "must remain confidential." However, the Jacksonville property appraiser's website lists six existing owners of condo space in the building as Bray & Singletary PA, Northeast Florida Community Action Agency Inc., Gerald Sohn PA, Qwest Communications Corp., Progress Telecom LLC and US Carrier Telecom LLC.

Leffler says the deal was done at this time because "the developer believes there is a pent-up demand for stylish, urban residential in the Jacksonville CBD." The broker is confident the new owner, Jax Telecom Partners, "will deliver a sophisticated product at a very attractive price point." The property is near the planned $230-million City and County Courthouse complex.

The financing package took three months to complete. Other lenders, besides Merrill Lynch and Westplan were bidding for the business as well, Leffler tells GlobeSt.com.

At $25.98 per sf, the Telecom Building is believed to be one of the lowest-priced structures in the metro Jacksonville commercial real estate market, area brokers tell GlobeSt.com. Estimated hard construction costs for a typical class A office building are in the $150-per-sf range, area construction sources tell GlobeSt.com. A specially retrofitted property, such as the Telecom Building, would have an estimated hard construction cost of at least $250 per sf, construction sources familiar with comparable properties tell GlobeSt.com.