Hertz Makes History

Hertz Investment Group was not penny pinching with this latest purchase in the Southeast.
Jim Ingram

Jim Ingram, Hertz Investment Group

Hertz Investment Group has acquired a portfolio of six Class A office buildings in the Southeast totaling more than 3-million square feet from Equity Commonwealth for $417.45 million.

The properties will expand Hertz’s holdings in the New Orleans market and serve as the company’s entry into three new cities: Birmingham, Ala.; Columbia, S.C.; and Greensboro, N.C.

“We focus on small- to medium-size cities; we’re not interested in D.C., Chicago, New York, we’re interested in what some would consider tertiary markets,” Jim Ingram, Hertz Investment Group’s executive vice president & CIO, told Commercial Property Executive. “This portfolio gave us the opportunity to buy truly best-in-class assets in these four market places.”

One of the properties purchased was One Shell Square, a 1.3 million-square-foot, 51-story tower in the New Orleans Central Business District. Shell Oil just renewed its 650,000-square-foot lease in the building and Hertz is planning $13 million in building improvements as part of the lease.

“We were already the largest owner of office properties in New Orleans, so when you add in the 1.2 million One Shell Square, you’re still the largest owner but now you’ve added one of the best buildings in the marketplace,” Ingram added. “It’s not the newest, but it’s the most recognized in the New Orleans CBD; it’s the only 50-story tower.”

Also included in the deal were Inverness Central, a four-building complex with 475,895 square feet, located in suburban Birmingham; the Wells Fargo Tower, a 30-story tower with 514,893 square feet in Birmingham’s CBD; Meridian, a 17-story tower with 334,075 square feet in Columbia; 300 N. Greene St., a 21-story tower with 324,075 square feet in Greensboro; and 20th Place South, a four-story office building with 125,722 square feet, situated in suburban Birmingham.

As for renovations in these buildings, Hertz has $2.2 million slated for Wells Fargo Tower, $500,000 for work on 300 N. Greene and $1 million for work on Inverness Central.

It’s been a busy 12 months for Hertz. Last July it acquired the Bank of America Tower in Jacksonville for $88 million and it also added Fifth Third Center, a 508,397-square-foot tower in Cleveland; Chestnut Place, a 218,621-square-foot building in Worchester, Mass.; and South Point Business Park, a 395,920-square-foot property built as headquarters for Worldcom, in the Jackson, Miss. market.

“We’ll keep doing what you’ve seen us do. I think anyone who owns a best-in-class building in a small CBD across the country is going to say, ‘Why not call Hertz’ if they are a seller,” Ingram concluded. “This shows the world not only that we can buy individual properties but we can take half-a-million-dollar portfolios, as well.”