Wells Fargo Center now is marketed as 1 Independent as owners of the 37-story Downtown tower negotiate for a new anchor tenant after taking over the property April 22 in a deed-in-lieu of foreclosure.
Wells Fargo, a San Francisco-based banking institution, has had its name on the Northbank tower at 1 Independent Drive since 2011 but is downsizing its leased space this year.
“Downtown Jacksonville, like many cities around the country, is working through challenges related to both demand and supply side in the office market – in many cases driven by liquidity issues from the impact on interest rates,” said Zac Gruber, president of the Office Division of Miami-based Banyan Street Capital, in an email April 29.
“With this transaction now final, Wells Fargo Center (to be known going forward as 1 Independent) will have the capitalization to be able to deliver on necessary expenditures to successfully secure new leases and renew existing tenants,” Gruber said.
“This is not the case for every office property in Downtown Jacksonville,” he said.
An entity managed by Argentic Investment Management LLC of New York City said April 26 it acquired Wells Fargo Center and that the building’s former owner, Banyan Street Capital, was retained as the exclusive owner’s agent.
The new owners said they will continue the capital improvement plan for the nearly 50-year-old signature tower that began under previous ownership.
The group also indicated there could be a new name on the tower, which would be the fifth name since the high-rise was built in 1975 for Jacksonville-based insurance company Independent Life.
Argentic said it will “market the tower’s building-top signage opportunity and is already in discussions with two financial institutions.”
“This comes as Wells Fargo plans to downsize and extend its lease at the property, which will take place in October 2024,” the release said.
Gruber said April 29 he could not comment on whether Wells Fargo is in talks to continue its signage. He also had no comment on the size of the bank’s lease before and after downsizing, the location of the two financial institutions he is speaking with, or when a signage decision will be made.
“This is one of the most iconic and visible building top signs in the Southeast, and it represents a tremendous opportunity for a tenant desiring national exposure to accompany a large format lease,” Gruber said in the April 26 release.
Gruber confirmed April 29 that the loan on the property was between affiliates of Argentic and affiliates of Banyan.
Asked for comment on the status of the loan payments upon the property conveyance, Gruber said “all interest payments were current through the maturity date.”
Argentic said it plans to invest funds to continue the path of stabilizing the tenancy and finalizing capital improvements that began under Banyan’s ownership.
Argentic said it also purchased two parking garages as part of the acquisition. The nine-level and three-level garages are nearby.
“The team overseeing the property will remain in place, providing continuity and reliability for all tenants, employees and guests of Wells Fargo Center,” said a representative of Argentic in the news release.
Encompassing an entire city block next to the Riverwalk, “Wells Fargo Tower spans 655,000 square feet with striking architecture that stands out as an icon in the Jacksonville skyline.”
The ownership leases the land beneath the tower and the two parking garages.
Wells Fargo’s space
Market sources say Wells Fargo occupies from 105,000 to about 110,000 square feet of space in the high-rise but will drop to less than 50,000 square feet in October.
Market sources say Wells Fargo will reduce its lease from space among seven floors, which includes a branch office in the lobby, to two floors.
A Wells Fargo spokesperson was assembling responses to questions April 29 and expected to respond as soon as possible.
The building now is about 88% leased. The downsize in the Wells Fargo lease would provide more than 100,000 square feet of available space to a tenant that might be interested in naming rights.
With the property conveyed to a new owner and the anchor tenant downsizing, the Downtown high-rise “will have the capitalization to be able to deliver on necessary expenditures to successfully secure new leases and renew existing tenants.”
Landmark tower
The tower was built in 1975 as the headquarters for Jacksonville-based Independent Life & Accident Insurance Co. and was known as the Independent Life Building.
It became the AccuStaff Building starting in 1998 and later the Modis Building before Wells Fargo became the anchor tenant in 2011.
Wells Fargo saw its chance for a signature move Downtown when Adecco Group North America moved its operations to the Southside, vacating space in the former Modis Building and, importantly, space for a name on top of the tower.
Adecco bought Modis’ parent company.
The Daily Record reported in October 2010 that Wells Fargo, which bought Wachovia more than two years earlier, was considering a move from the One Enterprise Center Building at 225 W. Water St. Downtown to the former Modis Building.
At the time, Wells Fargo said it would open a bank branch on the ground floor and would move into 120,000 square feet that included six full floors – six, eight, nine, 10, 20, 25 – and part of 24.
It vacated 155,000 square feet in the 21-story One Enterprise Center building.
It said it would move 375 employees.
Wachovia had occupied the One Enterprise Center Building Downtown from the building’s beginning, first as Florida National Bank and then as First Union before mergers.
Recapping the April 22 deal
Founded in 2012, Banyan Street Capital is based in Miami with regional offices in New York City, Atlanta and Jacksonville.
It owns, develops and operates a portfolio of office, multifamily and mixed-use properties.
Argentic Investment Management is an investment manager of commercial real estate lending and investment vehicles focused on providing fixed-rate and floating-rate debt financing solutions to property owners throughout the U.S.
As reported, ownership of the Wells Fargo Center conveyed the Downtown tower and two parking garages April 22 to Argentic at a value of a combined $46.35 million.
A New York City-based limited liability company led by the CEO of Argentic Investment Management LLC now owns the tower.
The deed shows that WFC Lessee LLC, led by Banyan Street Capital LLC of Miami, conveyed the property to AREIT RE WFC LLC.
The two special warranty deeds were recorded April 24 with the Duval County Clerk of Courts for the tower, a nine-level garage at 1 W. Bay St. and a three-level garage at 21 E. Bay St.
The almost 900,000-square-foot tower, whose leasable space is less than 700,000 square feet, and the nine-level garage were conveyed at $41.715 million and the three-level garage at $4.635 million, the deeds show.
Last sold in 2014
In 2014, a group of New York and Miami investors partnered to pay $75.3 million for the tower.
Allegiance Partners of New York paid $44.75 million. Banyan Street Capital paid $30.55 million.
The nine-story parking garage was included in the purchase of the building.
The investors separately paid $3.7 million for the three-story parking garage.
The deeds recorded April 22 indicate that Banyan sold the buildings “on or upon” the land, which is owned by Allegiance Jacksonville LLC.”
Cushman & Wakefield had the listing on the property.