On the market since Whitney Bank left Downtown and relocated its Lafayette headquarters to River Ranch a little less than a year ago, the office building at 911 Lee Ave. was purchased March 16 by Baton Rouge-based Pecan Grove Commercial Properties for $1.9 million.
The five-story, 56,000-square-foot building is 45 percent occupied, according to Brad Roberts of Land Hawk Commercial Real Estate, which represented purchaser Pecan Grove and is handling the leasing and management of the property. Roberts, who is also a partner in Pecan Grove, tells ABiz the company will immediately invest approximately $300,000 renovating the common areas of the building and will likely spend another $700,000 in tenant improvements as leases are finalized. The 15th Judicial District Attorney’s Office is a temporary tenant (it will move back to the Lafayette Parish Courthouse after renovations are completed), and office space is also leased by the U.S. Department of Agriculture.
The two parking lots across Jefferson Street from the Whitney building and one down the street on Caillouet Place (an approximately .28-acre fenced in area near Ascension's gym) were also included in the sale.
Roberts says while there has been some interest, he has not had any serious discussions with potential tenants yet. He is, however, confident the building will lease quickly, as he says Downtown’s office occupancy is running at about 95 percent.
Whitney, which had used the building as its Lafayette headquarters for nearly three decades before leaving in May, initially was asking $3.6 million for the property, and on two occasions had contracts that were significantly higher than the $1.9 million Pecan Grove paid, according to sources familiar with the transactions. Roberts, who tells ABiz he has no idea why those contracts did not materialize, says the property was relisted for $1.9 million, prompting his group to jump on it. “We see a lot of upside value ... especially with all the surface parking,” says Roberts, whose company (Land Hawk was founded in 2013 and Pecan Grove in 2012) has office and industrial parks in East Baton Rouge Parish and Prairieville.
The purchase price is about $2 million less than Whitney paid in 1987 when it acquired the property from the Federal Deposit Insurance Corporation as part of Whitney’s takeover of American Bank & Trust, one of the first local banks to fail during the banking crisis of the 1980s and early 1990s.
Lafayette real estate developer Hammy Davis, who was not involved in the Whitney transaction, cautions against reading too much into the lower sales price all these years later, noting the property is tired and in desperate need of renovation. “I believe it’s not any indication of what’s happening in values Downtown,” says Davis, who is also a broker/agent for Coldwell Banker Pelican Real Estate. “They bought it for that price because of its overall condition and the fact that it had not been touched in some time.”