Bank of America Renews 70,000-SF for Est. $16M

ORLANDO-Placing its faith in the promises of elected officials to redevelop Downtown, Atlanta-based Bank of America has renewed its 10-year retail and office lease for a total 70,000 sf at the 28-story, 421,204-sf office tower that carries its skyline logo at 390 N. Orange Ave. It’s the biggest Downtown, class A office leasing deal of the year.

Area brokers in a position to know tell GlobeSt.com the estimated aggregate value of the transaction is $16.1 million, based on an average $23-per-sf annual rent. Quoted Downtown class A office rents are $22 to $24 per sf.

The lease brings the occupancy of the 16-year-old structure to 92%, says Kirk R. Fetter, leasing director in Orlando for Dallas-based Gaedeke Landers LLC which co-owns the property with Blue Capital Investments Inc., a Hamburg, Germany-based real estate fund manager for German investors.

The lease also firms up the overall 4.17-million-sf, class A, CBD vacancy rate which stood at 12.4% in Q1, according to Cushman & Wakefield of Florida Inc. research. However, the overall class A vacancy rate in 12 monitored submarkets totaling 29.93 million sf is 20.6%. There is 515,999 sf of vacant class A space Downtown.

“The office market continues to suffer from near non-existent demand, tenant uncertainty, office closings, continued job losses and new speculative space being delivered to the market,” says Larry D. Richey, senior vice president and general manager of Cushman Wakefield’s Tampa and Orlando divisions.

Besides Downtown, the leasing deal was also a crucial play for Gaedeke Landers. “Bank of America is a very important, long-term relationship for us,” Fetter says. “They’ve been an exemplary tenant and we’re very please they have committed to another 10 years.”

Losing Bank of America at this juncture to another building owner would have dented the credibility Gaedeke has built up since buying the building in 1997, area brokers tell GlobeSt.com. The bank occupies 17% of the building’s total rentable square feet. Over the years, the building’s skyline has carried the logos of previous anchors Barnett Bank and NationsBank.

“Bank of America is pleased to play a significant role in the vitality of Downtown Orlando,” says Ed Timberlake, president of Bank of America-Central Florida. “Our lease renewal and $65 million investment in the development of City View at Hughes Square (by Orlando-based Hughes Supply Co.) amplifies this commitment.”

Blue Capital asset manager Douglas Scott says the lease renewal “provides continued stability to the Downtown Orlando market. We believe in the strength of this market and we’re pleased the bank feels the same.”

Blue Capital owns office properties in eight U.S. markets. The firm is a subsidiary of Vereins-und Westbank AG, which is a member of HVB Group, Germany’s second-largest, private-sector banking institution. With offices in Hamburg and Dallas, Blue Capital serves as the asset and portfolio manager for Bank of America Center, nine other office buildings and 32 grocery-anchored shopping centers.

Gaedeke Landers owns and manages class A office properties in Boca Raton, FL, Fort Lauderdale, FL, Miami, Tampa, Atlanta, Dallas, Fort Worth, Nashville, Phoenix and Washington, DC.

Elwood “Woody” Coley and Mark Montgomery in the Orlando office of Trammell Crow Co. negotiated for Bank of America.