The North Main Street area should get a boost with AgFirst’s announcement to buy the Bank of America Plaza and move into 100,000 square feet of office space, observers say. The move will push the Central Business District vacancy for Class “A” space to historical lows.
By Chuck Crumbo
Published Sept. 26, 2012
AgFirst Farm Credit Bank’s decision to buy the Bank of America Plaza and occupy 100,000 square feet of the building will push the Central Business District vacancy rate for Class “A” space to historical lows.
It also should focus further redevelopment of the north Main Street area, sparking a growth in retail shops and restaurants, observers say.
“It’s a really big story,” said Matt Kennell, president and CEO of City Center Partnership. “This is one of the most significant moves in downtown Columbia in many years and for many reasons.”
AgFirst Farm Credit Bank plans to move from its headquarters at Hampton and Marion streets to the Bank of America Plaza. (File photo/James T. Hammond)
Holy Trinity Greek Orthodox Church’s new church and development of its property across the street from the Bank of America Plaza has led the way in improvements.
Further, the opening of the Nickelodeon’s new theater at 1607 Main St., plus nearby restaurants, will be attracting patrons to the area, Kennell said.
And, the city’s new parking garage at Taylor and Sumter streets, should help draw more people to the north Main area, Kennell added.
AgFirst plans to move some 380 workers into the plaza, bringing the 300,000-square-foot, 17-story tower at 1901 Main St. to full capacity.
The plaza was owned by Cooper Realty Investments, of Rogers, Ariz., before being placed into receivership. AgFirst’s offer for the property is confidential.
When AgFirst completes its move toward the end of 2013, the vacancy rate for Class “A” office space in the Central Business District will drop to 8.7%, the lowest rate in more than two decades, according to Colliers International.
Although the downtown vacancy rate for Class “A” office space is reaching single digits, it may not trigger a wave of new development.
“Certainly in years past when a market reaches these high occupancy levels then the development community becomes more active,” said David Lockwood, senior vice president at Colliers.
“However, we live in a different world since the last office building was constructed. Developers are required to have higher equity stakes as financing is more stringent. Speculative development is greatly curtailed in this new era,” he said.
Additionally, rental rates in a new building would most likely be 35% higher than current rates, Lockwood added.
“I think the Columbia market has a maturing/growth period ahead where rents will rise and demand will increase until a point when a new building is justified,” Lockwood said.
While the Central Business District is filling up, AgFirst’s move will mean emptying 100,000 square feet of its nearly 80-year-old building at Hampton and Marion streets.
Kennell, though, thinks there’ll be interest in the AgFirst building. Most likely, it will be a candidate for a mixed-use facility or even student housing.