VOL. 129 | NO. 220 | Tuesday, November 11, 2014
Former FedEx Headquarters Up for Auction
By Amos Maki
This week you can acquire a sizeable piece of Memphis business history at a deep discount.
The Commerce Center complex on Lamar Avenue, former home to Memphis business titans Holiday Inn and FedEx, is up for auction.
(SVN Auction Services)
The Commerce Center complex on Lamar Avenue – former home to Memphis-based corporate titans Holiday Inn and FedEx – is on the auction block.
With a starting bid of $2.5 million, the 313,843-square-foot, three-building campus on 33 acres comes in at $7.97 per square foot.
“That’s just absurd because the property is basically rent-ready,” said Harry Atlick, senior adviser to Sperry Van Ness Auction Services, which is handling the auction. “It’s a hell of a buy for the price. I’ve never seen anything this attractive at this price.”
The initial bid price of $2.5 million is far below the $7.5 million the owner was asking just a few years ago. The auction is open now at svnauctions.com and runs until Wednesday, Nov. 12, at 3:30 p.m.
“I think it’s a great opportunity,” said Dede Malmo of Malmo Memphis Real Estate, the local broker handling the building. “We have marketed this thing all over the world in the hope there are people from China, New Zealand, New York who say they can’t turn it down because of the price.”
The centerpiece of the campus is a three-story, 271,730-square-foot office building that features a grand entrance through a large, round lobby. Marble flooring, an open design plan and reflective metal ceiling panels greet visitors.
The second campus building is a single-story, 22,539-square-foot data center built like a bunker to withstand natural and manmade disasters.
The third building is a 19,574-square-foot fitness center that contains exercise rooms, three racquetball courts, swimming pool, indoor spa, whirlpool, steam, sauna, four outdoor tennis courts, a rubberized asphalt running track and volleyball courts. It also has a shaded picnic area with barbecue pits.
The facility was constructed and occupied by Holiday Inn and subsequently FedEx, which utilized the campus for its global operation command and control center. FedEx reportedly spent in excess of $7 million on improvements from 1995 to 2004, when it left for the company’s new headquarters.
Parts of the building appear frozen in time. The cafeteria and 50-seat lunch room look like they could be prepared to sell a meal today.
“I could walk you through the area FedEx left and you would think they left yesterday,” Malmo said. “I’ve never dealt with a seller of a vacant building who has spent more time or money maintaining a vacant building. You could move in today and not spend a dime. I could eat off the floor at the cafeteria at this very minute.”
Malmo said the complex would make a great home for state and local governments. The city of Memphis is eyeing the Donnelley J. Hill state office building, which was vacated in One Commerce Square Downtown.
“It is something that the city should purchase or the state should purchase and they should create a centralized location for all government offices,” said Malmo.
Malmo has been critical of the state leasing space at One Commerce Square, saying the state operations that moved to the Downtown skyscraper did not have to be Downtown and that the Commerce Center property was more centrally located and much cheaper.
The gated and secured property, located on Lamar between Getwell and Knight Arnold roads, is a stone’s throw from Memphis International Airport and the sprawling southeast Memphis industrial submarket.
However, the neighborhood has largely seen better days. Signs of neighborhood decay – from payday lenders to nearby strip clubs and shuttered buildings – dot the urban landscape
“Lamar Avenue, as you know, it has its own challenges, but you’ve got close proximity to the airport, rail and everything else,” said Atlick. “And it’s a secure, gated facility.”