AT&T leaving Everbank Center

[fsujax]

Just saw this on the Business Journal's facebook page. They are vacating seven floors.

http://www.bizjournals.com/jacksonville/news/2013/08/13/att-will-vacate-seven-floors-in.html?ana=fbk&fb_action_ids=10100686292396562%2C10100686219547552&fb_action_types=og.recommends&fb_source=other_multiline&action_object_map=%7B%2210100686292396562%22%3A408192015952242%2C%2210100686219547552%22%3A1409011352646095%7D&action_type_map=%7B%2210100686292396562%22%3A%22og.recommends%22%2C%2210100686219547552%22%3A%22og.recommends%22%7D&action_ref_map=%5B%5D

[KenFSU]

Wow, that's a quarter of the building's occupancy right there.

[thelakelander]

I wonder if they are relocating to another half vacant downtown building like Parador's Suntrust Tower or space vacated by Wells Fargo?  If they head to the burbs, that pretty much sucks the wind out of the momentum from landing Everbank.

[fsujax]

I agree. I think their operations and staffing have been shrinking. I could see them going to the Suntrust Tower or old Wells Fargo building, but leaving downtown would be bad.

[JayBird]

there was talk a few months back about them wanting to downsize the office, think they'll keep a DT presence.  I like how now they'll revamp that space, room enough for a good sized new tenant

[tufsu1]

they had already downsized the space...which is why the building isn't called the AT&T tower anymore

[JayBird]

they had already downsized the space...which is why the building isn't called the AT&T tower anymore

Actually no, AT&T has held same footprint that Bellsouth did, I think they dropped one floor back in 2010 but they have had 7 or 8 floors since 2005 when I was there.  This was talk of almost cutting in half, moving other operations to San Antonio, but don't know if that still panned out. Either way, I cannot see them leaving DT for good.

[simms3]

So that's a 200,000+ block of space coming on the market.  Not to sound pessimistic, but anyone in the brokerage business know of any 100,000+ SF commitments on or coming to market?  This is a big indicator of a local office market...sure vacancies have to tighten and rents have to come up for new construction to take place, but usually there is no demand for new office, let alone highrise office/CBD office until there is a large space need by a large credit tenant or law firm.

Now I know we can never compare Jax to large booming cities like SF or Houston, but as both markets are two of the hottest office/construction markets in the country right now, it would be worth noting what's considered extreme nowadays:

SF - 6-9 months ago there were fifteen (15) 100,000+ SF space commitments on the market.  Now there are a rumored 21, and we are courting one for 202,355 SF.  Almost all of these are tech tenants.  Square just leased 246,000 SF with option to add 81,000 SF.  Salesforce.com just pre-leased an entire 33 floor, 440,000 SF building under construction now.  Twitter leased 215,000 SF for its new HQ, Yammer is taking 81,000 SF in same building, Dolby is taking an entire 354,000 SF 16 floor building, Google was reportedly in the market for 300,000 SF, etc etc.  This is news from past 3-6 months.  Lots of the major credit companies such as Google, Facebook, NVidia, Apple and Samsung are building huge new campuses with the most outlandish designs in the suburbs.

Houston - 10.1 million SF office under construction in metro, mostly high rise.  82% of this new inventory is pre-leased.  3 million SF is for Exxon Mobil's new HQ (12,000 employees at this one campus).  Anadarko building second 550,000 SF tower nearby, Southwestern Energy just broke ground on 515,000 SF HQ also nearby.  Noble Energy just signed 497,000 SF lease and prompted construction of another similar building to eventually take 954,000 SF.  ConocoPhillips taking 850,000 SF in Energy Corridor, which has 3.5% vacancy for class A.  And Houston is also seeing new towers downtown (Chevron for instance, which has been loyal to DT Houston for decades).

I keep reading about the office market in Atlanta, my old hometown.  Not hot compared to the above two, but lots of tech oriented companies taking 60-100,000 SF in the Ponce City Market under redevelopment right now.  Law firms in expansion mode.  Coca Cola just took 250,000 SF in the city's 2nd tallest building, which is in the perpetually struggling DT.  That's over 2,000 employees in the IT dept.

So what's going to replace AT&T in Jacksonville?  Where is the movement?  The expansion?

[vicupstate]

So what's going to replace AT&T in Jacksonville?  Where is the movement?  The expansion?

Everbank???  Could they expand or maybe consolidate into the AT&T building?

I suburb-to-urban core move for someone else would work too.

[JaxNole]

EverBank already has plans to expand its presence at EBC. We have satellite offices that will slowly transition to EBC as well as a bulidout to accommodate those we will hire once the hiring freeze is lifted. EverBank is injecting cash downtown and in Brooklyn.

EverBank is not done expanding or consolidating operations around the core.

[thelakelander]

So what's going to replace AT&T in Jacksonville?  Where is the movement?  The expansion?

I wonder when we'll find out about the rest of this story?  Is AT&T leaving Jax altogether or are they moving and consolidating to less square footage (say still above 100k+ SQ)?  If they are moving, are they simply doing what Wells Fargo did a few months back or are they 100% abandoning downtown?

[simms3]

Well the other question is who backfilled Wells Fargo at 225 Water St?  I'm just concerned because no matter what anyone says about residential, mixed-use, etc etc a downtown isn't healthy without its core reason for being, which is a place for business.  I hope the office brokerage community and the DIA and mayor can work something out and soon.  It isn't looking too good from a bystander's perspective.

AT&T was already in special servicing when Everbank made the move, if I remember correctly.  It was Israeli ownership, which was always weird since they don't often look much further north than SoFla.  No AT&T could push it back over the brink from a cash flow perspective - whatever CMBS loan is on there probably has an interest coverage ratio that must be kept, and if not the building goes into cash trap mode and/or special servicing after 1-2 quarters of that.

That would not be good for Everbank from a tenant's perspective.

[Wacca Pilatka]

Anyone heard anything lately about the prospects of Fanatics moving downtown?

[duvaldude08]

Anyone heard anything lately about the prospects of Fanatics moving downtown?

There has not been nothing new reported lately. Its been kinda of quiet. No news is always good news LOL

[thelakelander]

Well the other question is who backfilled Wells Fargo at 225 Water St?

I believe most of that space is still empty.