Developer Mike Wampold has acquired the downtown Chase South Tower from a group of New York investors and is planning to eventually redevelop the iconic high rise into a mixed-use property for office, retail and residential use.
In a deal that closed late Thursday, Wampold’s La Hermana Major, LLC, acquired the 333,000-square-foot building from Florida Street Holdings, LLC for a price listed as $10 and other valuable considerations.
“La Hermana Major” is Spanish for “the tall sister,” a reference to the adjoining Riverside North Tower, which Wampold also owns.
Wampold declines to say what he paid for the nearly 50-year-old Chase South Tower, citing a nondisclosure agreement. Sources familiar with downtown real estate say market rate for a building of that size and age could be as much as $85 per square foot, or $25 million, though Wampold likely paid considerably less.
Brokers Hank Saurage and Michele Casi of Saurage Rotenberg Commercial Real Estate handled the transaction.
Though a class A office property in the heart of downtown, the 21-story Chase South Tower, located at 451 Florida St., has struggled in recent years with its absentee landlords, who in 2016 were involved in a foreclosure lawsuit with their lender. Though the suit was later settled, the property’s occupancy rate was only around 70% in April 2017. In the past two years, several large tenants, including Camelot Club, which closed in 2016, and Albemarle, have moved out.
Wampold says he is undeterred and, in fact, is bullish on the building and the submarket. His adjoining Riverside North Tower is running out of vacancies and he believes demand exists for more high rise office space in a newly renovated building, despite a general softening of the downtown office market.
“The main thing we are going to do for now is improve it and bring it back to its class A status, from bottom to top,” he says.
Wampold, though stating he has no immediate plans to redevelop the building or expand its use, has architects working on several options and is particularly interested in exploring the multifamily component.
Wampold believes there is a market for still more multifamily space downtown, even though several new apartment buildings are under construction or have recently opened. He points out that even with all the new complexes, downtown still has fewer than 500 apartment units.
“That’s not very much,” he says. “You don’t necessarily need more apartments but you need the right kind of apartment building, something that is going to entice people out of the suburbs.”
With the acquisition of the Chase South Tower, Wampold now owns five major downtown structures that he has either bought and renovated or built from the ground up. They include Riverside North Tower, City Plaza and II City Plaza, and the Watermark Hotel, which he redeveloped from the former LNB Building. The developer says it is a testament to his faith in downtown and in Baton Rouge.
“We are a state capital, a major U.S. city with a major port and two universities,” he says. ‘I happen to be a believer in downtown.”
Referencing two fiery speeches of the past two weeks by private equity firm executive Jim Bernhard, who has committed to using his money and influence to improve infrastructure, crime and higher education, Wampold says he, too, is committed to making Baton Rouge better.
“We need to take stock in Baton Rouge and change and improve some things,” he says “I’m part of that movement and plan to join in and help.”
