Many floors remain vacant in Anniston's office towers
by Daniel Gaddy
Dec 03, 2012 | 6700 views |  0 comments | 29 29 recommendations | email to a friend | print
James Lloyd, the property manager for Anniston’s Watermark Tower, said one word describes the time he’s had trying to get tenants: terrible.

He said seven of the 11 stories in the Watermark Tower remain vacant.

There’s a similar problem at the nearby Commerce Tower, now that the local office of the Department of Human Resources has moved to a new location. The building now has eight empty levels.

Arthur Fite, a local lawyer whose firm is in the Wells Fargo building in downtown Anniston, said the issue concerns basic economics. The supply of office space in the city is significantly greater than the demand.

In addition to the overwhelming supply, Fite said, the buildings in downtown districts like Anniston’s are often decades old and originally intended for retail stores. That means many of them would not meet the needs of potential tenants without costly renovations.

“It’s just flooded with availability, but not with Class-A office space,” he said.

Fite said the rental rates for office space do not vary greatly throughout the area and are somewhere between $10 and $12 per square foot. Similar property in downtown Birmingham is about double that, he said.

Lloyd said the issues with property in downtown Anniston are similar to those nationwide. In particular, there’s a problem with lenders hesitating to extend lines of credit.

He said that at one time developers could get as much as 100 percent financing for their projects. Now, many lenders will only provide lines of credit for 65 percent of the total cost of projects.

“You have to have a lot of money to get something started now,” he said.

Lloyd said there are several positives for the area, though. He believes the newly elected Anniston City Council will do much better to attract businesses and help streamline paperwork for small businesses.

“It was a fight for everything the last four years,” he said.

Lloyd also mentioned the recent establishment of the Anniston Commercial Development Authority. He said Anniston was one of the last Alabama cities of its size to organize such a body, which helps to facilitate development projects.

Lloyd said he also hopes city leaders will appoint a full-time director of the authority to attract businesses, much like city leaders in Oxford have.

“We’ve never had that person,” he said.

Some reduction in the supply of local office space should happen soon. In early 2013, about 30 businesses will be seeking new space as the Wells Fargo building shuts down for demolition. Though the bank will rebuild at the current site, the new location will not have space available to rent.

Fite said he is hoping to keep within two or three blocks of the Wells Fargo building. He’s considering space in the Commerce Tower, he said.

Sherri Sumners, executive director of the Chamber Foundation, said the former Wells Fargo tenants should help boost the market for downtown office space. She also said it is encouraging that Wells Fargo officials have enough confidence in the local economy to stay in the downtown area.

Lloyd said that despite the tough market, he’s spoken with a developer who is interested in establishing low-cost, hostel-style lodging geared toward those using the biking trails in the area.

The hostels would be among the first new tenants in the upper floors of the Watermark Tower since 2003, when fire damaged the building and left it largely abandoned until the Anniston Water Works and Sewer Board worked with developers to help restore the property, constructed in 1927.

Lloyd said he said he has also spoken with people interested in upgrading the Watermark Tower’s top floor and creating an upscale restaurant.

“That would be unbelievable,” he said.

Assistant Metro Editor Daniel Gaddy: 256-235-3560. On Twitter @DGaddy_Star
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Many floors remain vacant in Anniston's office towers by Daniel Gaddy

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