VOL. 111 | NO. 1 | Thursday, January 2, 1997
By CAMILLE H
Commercial real estate sales
show area economy is strong
Local investors purchase
Lipscomb & Pitts building
on Union Avenue Extended
By CAMILLE H. GAMBLE
The Daily News
Several commercial buildings in Memphis sold during December, a sign that the economy is in good shape, according to local brokers and analysts.
The building at 2670 Union Ave. Extended, better known as the Lipscomb & Pitts building, was sold Dec. 19 to a partnership made up of the families of Bob and Louis Loeb of Loeb Realty Co.
Junior Realty LP purchased the 120,000-square-foot building from Connecticut General Life Insurance Co. for $2.24 million. Cigna Investments Inc. was the investment company for Connecticut General.
The partnership borrowed $2.27 million from Union Planters National Bank to finance the transaction, according to a deed of trust filed in the Shelby County Registers Office.
Also sold last month was the building at 1760 Moriah Woods Blvd. Prudential Insurance Co. of America sold the property to First Amsterdam Realty Inc. for $11 million, according to a deed filed in Shelby County.
On Dec. 20, Acquiport Memphis DC Inc. purchased the industrial building at 3945 Hickory Hill Blvd. for $3.6 million, according to a warranty deed filed in Shelby County. The building was purchased from Industrial Developments International LP.
"What all those sales say to me is that the health of the commercial and industrial real estate market is good and continuing to improve," said Wyatt Aiken, senior vice president of Commercial Tennessee Inc. "There was a time a few years ago when nothing was selling, either in Memphis or virtually anywhere across the Southeast. But in the last few years, we have seen some building sales that are showing increases in value.
"They often are between institutional investors, and local investors are buying them, and that is a good sign. The local investors, like the Loebs, know the market. When they buy a property like the Lipscomb & Pitts building, what that shows is that someone local who knows the market has faith in the market, and that is a good sign."
Generally, when the sales go the other way -
from the local investors to the institutional investors -
its usually profit-taking on behalf of the local investors, Aiken said. However, he said, when local companies are buying, it shows the economy is strong.
"Institutional investors sell every so many years, according to their institutional investment plan," Aiken said. "So it is not unusual for them to be selling."
Bob Loeb said the purchase of the Lipscomb & Pitts building was strictly for investment purposes.
"We buy property when we think we see good return opportunities, and we thought that this property represented a good investment, so we bought it," Loeb said.
The building, which was built in 1973, has 42 tenants and is 98 percent occupied. Loeb said he has no immediate plans to make improvements to the property.
"Weve talked about doing some things, but we dont have any specific plans," he said. "The property doesnt have any deferred maintenance, and the only needs it may have would be to do energy conversions on the chiller system and the lighting system. We are just going to start studying those things at the first of the year."
Cigna had owned the building since 1992. In 1995, Lipscomb & Pitts Insurance moved into the property, and the move entailed a substantial renovation on two floors totaling 18,000 square feet, Loeb said. "When they moved in they completely changed the nature of the building."
Also, the owner prior to Cigna had made renovations to the lobby area. "Overall, the property is in good shape," Loeb said.
RFS Realty president Mark Whitaker said the market in Memphis currently is a buyers market.
"Right now, there are more buyers out there for good investment real estate than there are sellers," Whitaker said. "The buyers are having to almost line up, and in some cases almost bid on these properties. I think it is a good indication that the investors are sold on the economy in general and real estate in Memphis in particular. I think that bodes well for all of us."