It’s been almost two years since Pinnacle Airlines moved more than 600 employees into the One Commerce Square building Downtown.

Gary Prosterman is a partner with Memphis Commerce Square Partners, which owns One Commerce Square. The building’s owners are looking to rebound after losing Pinnacle Airlines and remain optimistic that recent improvements bode well for its future.

(Daily News/Lance Murphey)

Hailed as a victory in the long-running battle to revive Downtown, Pinnacle’s move to the 29-story building at Union Avenue and Main Street was hailed by city, county and business leaders as a signature event that would spur more investment and development in the city’s core.

Today, One Commerce Square’s owners, Downtown officials and the building’s real estate advisers are preparing for life without Pinnacle, which is in the process of abandoning 170,000 square feet of space there this month as it relocates its headquarters to Minnesota.

“It will be very challenging to promptly backfill all the space being left by Pinnacle,” said Downtown Memphis Commission president Paul Morris.

But the owner’s real estate advisers are pursuing every lead. Bentley Pembroke, vice president of asset services for Cushman & Wakefield/Commercial Advisors LLC, said he was working with the Greater Memphis Chamber to find a corporate tenant that could absorb most of Pinnacle’s vacated space.

“We’re not going to be able to backfill that space one small tenant at a time,” Pembroke said. “We’re really pursuing a headquarters location. We’ve got a national search going with the chamber.”

The skyscraper has weathered strong financial and ownership storms over the years.

One Commerce Square was a shell of its former self in 2007 when SunTrust Bank vacated 170,000 square feet there for a new location in East Memphis. US Bank took over the building after its former owners went into default in 2009.

One Commerce Square’s new owners, Memphis Commerce Square Partners LLC, acquired the property in December 2010 for $7.6 million, and Pinnacle’s arrival salved those previous wounds.

The new ownership group, which pledged to pump $20 million into overhauling the building, was led by Karl Schledwitz and Gail Schledwitz, Terry Lynch, Gary Prosterman and Worthington Hyde Partners, the real estate investment firm of AutoZone Inc. founder J.R. “Pitt” Hyde III.

Improvements in the lobby include a new Independent Bank branch, improved seating areas, and updated lighting and finishes. Upgrades also were made to elevator cabs and a new control system was installed to improve speed and response times. Lighting and signage throughout the building, including the garage, were enhanced.

Morris said that while losing Pinnacle hurts, the effort to bring the airline’s headquarters Downtown will contribute to long-term stability and success.

“Pinnacle's departure is a huge disappointment, but it also creates an opportunity,” Morris said. “One Commerce Square has strong, stable, local ownership, and with millions of dollars of recent upgrades, it presents a great opportunity to attract new office users to Downtown Memphis.

“The Pinnacle lease made the redevelopment of One Commerce Square possible, and without it, One Commerce Square may very well be completely empty today. Instead, One Commerce Square is a premier Class A office building with stable local ownership, several premier tenants and room for more.”

Just as Pinnacle is packing up and leaving, one large tenant target has emerged: the state of Tennessee.

The state is looking for 82,000 square feet of office space, down from the original 100,000 square feet, as it prepares to leave the Donnelley J. Hill State Office Building in Civic Center Plaza. The most recent request for qualifications from the state focuses on a narrow area of Downtown.

An amended RFQ from the Department of General Services issued the week of May 13 said the area for the site would be bounded on the west by the Mississippi River, Interstate 40 on the north, G.E. Patterson Avenue to the south and Danny Thomas Boulevard on the east.

Pembroke declined to comment on whether One Commerce Square bid on the state project but said that in addition to searching for a possible headquarters tenant for the building with the Greater Memphis Chamber, he is also exploring smaller companies that could lease chunks of space.

“All things being equal we’re looking for a strong tenant mix in the building,” he said, “and all options are open.”