VOL. 133 | NO. 96 | Monday, May 14, 2018
Memphis Real Estate Recap
AutoZone Expanding Downtown, One Commerce Square Hits Market
By Patrick Lantrip
40 S. Main St.
Memphis, TN 38103
Property: One Commerce Square Building
Seller: Memphis Commerce Square Partners LLC
Details: One Commerce Square, the fourth-largest building in Memphis, has hit the market.
The 29-story high-rise office tower and four-story annex, located at 40 S. Main St., also comes with a leasehold interest in a roughly 500-space parking garage, according to real estate brokerage firm CBRE’s Deal Flow listing.
Though no asking price is listed, the Shelby County Assessor of Property appraised the Class A Downtown office tower, which tops 400,000 square feet, for $27.5 million this year.
One Commerce Square’s current ownership has invested more than $5 million in capital improvements since 2010, including new roofs, modernizing elevators, LED lighting in the garage, chiller replacements, and upgrades to the lobby and common areas, according to the listing.
The 63,230-square-foot annex was built in 1929 and was once the headquarters for National Bank of Commerce, which constructed the 391,440-square-foot tower in 1972.
Currently the annex is used as an upscale event rental space known as The Columns that can host as many as 800 people.
One Commerce Square is owned by Memphis Commerce Square Partners LLC, a partnership that includes Karl and Gail Schledwitz, Terry Lynch, Gary Prosterman and Worthington Hyde Partners (which includes AutoZone founder J.R. “Pitt” Hyde III, John Pontius and Robert Worthington).
The partnership bought One Commerce Square from U.S. Bank for $7.6 million in late 2010 and received a 20-year payment-in-lieu-of-taxes incentive from the Center City Revenue Finance Corp.
The deal was set in motion when Pinnacle Airlines Corp. inked a 13-year lease to become the anchor tenant. But just 2 1/2 years later, the regional air carrier had moved its headquarters to Minneapolis, Minnesota, leaving a 170,000-square-foot vacancy in the building.
In June 2017, Wunderlich Securities Inc. announced it would be moving its corporate headquarters from East Memphis to One Commerce Square, where it will occupy about 30,000 square feet on the 16th and 18th floors.
The building is currently 71.9 percent leased, according to CBRE.
104 & 110 S. Front St.
Memphis, TN 38103
Sale Amount: Undisclosed
Buyer: AutoZone Inc.
Seller: 104 110 South Front Street Holdings LLC
Details: With its 270,000-square-foot Store Support Center nearing capacity, Memphis-based auto parts retailer AutoZone Inc. has entered into an agreement to purchase two adjacent parcels on South Front Street in an effort to keep its corporate employees in a centralized location.
Located at 104 S. Front and 110 S. Front, the two 140-year-old buildings would add roughly 50,000 square feet to AutoZone’s Downtown headquarters when the deal closes later this month.
“We are going to need some additional space down the road. It was just a great opportunity to make sure that we have ownership of some property adjacent to our Store Support Center,” AutoZone spokesman Ray Pohlman said.
The company’s main headquarters is across the street at 123 S. Front.
Though Pohlman said the company does not currently have a timeframe in place or know what functions they will move into the newly acquired space, he did indicate more growth in store for AutoZone’s Downtown footprint.
“We’re growing 2 or 3 percent every year, and we’re reaching capacity at our Store Support Center,” Pohlman said. “So we’re going to need some more additional space and we want to make sure everyone stays Downtown.”
645 Marshall Ave.
Memphis, TN 38103
Grant Amount: Up to $60,000
Project Cost: $1.4 million
Application Date: May 9, 2018
Completion: Fall 2018
Owner: 645 Marshall Ave LLC
Tenant: The Edge Motor Museum
Contractor: Montgomery Martin Contractors
Subcontractor: C Foster Construction
Details: A new nonprofit museum geared toward automotive history and preservation could be coming to the Memphis Medical District.
Located at 645 Marshall Ave., The Edge Motor Museum is a part of a $1.4 million renovation project in the Edge neighborhood by Richard Vining, who also owns Vining Legacy Management, a bill pay service specializing in assisting seniors and widows. The Edge District lies between the Medical District and Downtown.
To help with the restoration of the 1920s-era façade, Vining, doing business as 645 Marshall Ave LLC, is seeking up to $60,000 in Exterior Improvement Grants from the Downtown Memphis Commission’s Center City Development Corp.
The site is less than 700 feet west of Sun Studio and Vining hopes to build on the recent successes of other small-scale urban infill projects in the area such as Edge Alley and The Marshall.
“With an initial offering of vehicles on loan with the museum valued at approximately $975,000, the exhibits contained within the Edge Motor Museum are not only expected to attract visitors on their own, but also serve as a complementary attraction to the visitors of Sun Studio – many of whom are already interested in 1950s-1970s culture,” the application reads in part.
The DMC staff report calls the project a “natural fit” as the surrounding area was once known as Auto Row and was home to several car dealerships and assembly facilities dating back to the 1920s.
Montgomery Martin Contractors will be in charge of construction, but any funds from the DMC’s EIG would be handled by C Foster Construction, a certified minority business enterprise.