Construction drawings and a building permit application were filed this week for total renovation of the former AT&T office building in Downtown Orlando. A general contractor and anchor tenant are now top of mind, and could prove one in the same in the coming months.
Located at 500 N. Orange Ave. on the northwest corner with W. Amelia Street, the 2.25-acre parcel features a five-story building with about 118,500 square feet, built in 1980.
Michigan-based West Second Street Associates paid $7 million for the asset in March 2015 from Southern Bell Telephone and Telegraph, and it has remained vacant since.
The company's founder said here in March WSSA was finalizing designs for a full stripping of the building down to its skeleton, and re-skinning with nearly all glass, new HVAC, mechanical infrastructure and elevators, projected then as a $30 million investment.
Micah Strader and Bobby Palta of CBRE's Orlando office were hired in March to refresh marketing of the property, after WSSA had failed in its own leasing efforts over two years. The building will retain its 118,500 square feet of office space, add an estimated 10,000 square feet of ground-floor retail, and a 200-space parking garage on the rear (west side).
Now WSSA is starting to interview and accept bid packages from general contractors, and has a lender identified but not yet signed, Strader told GrowthSpotter on Friday.
"All of those (selections) will be playing out in early First Quarter 2018, and we'll have project costs solidified then," he said. "We've taken that step with the permit application and are now an estimated 15 months from delivery."
WSSA had initially targeted a fall groundbreaking this year and delivery of the renovated building in Q1 2018. Delays in design and now permitting shift that window for occupancy to Q1 2019.
Reconstruction of the building will move forward on spec without an anchor tenant signed, said Strader, who claims interest in the property has been steady.
"Ideally we'd have a (general) contractor come forward who is qualified to deliver, and would also have interest to lease space in the building," he added.
Each of the five floors will have 23,703 square feet. Large blocks of 40,000 square feet or more are essentially non-existent in the Downtown Orlando office market, and demand for such is slowly driving up rents and redevelopment interest in the area.
WSSA initially considered in 2015 to convert the building into a 354-unit multifamily complex, but demand for downtown apartments and price per square foot didn't support their cost of conversion, the company said in October 2016.
Similar study of demolition and new construction for multifamily also didn't meet their investment goals for the property. WSSA changed gears in early 2016, after learning that large blocks of office space were in high demand in Downtown Orlando.
Class-A office space in the downtown submarket was commanding nearly $27 per square foot in the third quarter with a 10.3 percent vacancy rate, according to the latest office market report by Colliers International Central Florida. Class B/C space was drawing $24 per square foot with a 6.8 percent vacancy rate.
Strader and CBRE are seeking $30 per square foot for 500 N. Orange. Similar pre-lease pricing is being sought by Lincoln Property Company for its new 28-story Church Street Plaza office and hotel tower, now under construction with 214,800 square feet of modern office space planned.