Marketplace: Bank could be Signature-bound

Monday, July 28, 2008 at 2:36am

Regions Bank could be the tenant to anchor developer Tony Giarratana’s Signature Tower.

But the bank, which would take roughly 100,000 square feet, may also end up as the anchor for other office buildings on local drawing boards — including Alex Palmer’s West End Summit.

Giarratana said he could neither confirm nor deny that Regions has talked to him. The developer revealed recently that a bank had contacted him about Signature. A large office lease would likely give Giarratana enough commitments to begin building his 65-story tower.

Regions representatives also have talked to Eakin Partners about the developer’s plans to build a tower at 12th Avenue South and Demonbreun Street. Apparently, there isn’t a timetable for decision.

That’s likely because, like many other banks, Regions has been taking it on the chin with the mortgage industry debacle and slumping home sales. Its stock price ended Friday trading at just over $9 per share, $24 below its 52-week high.

First Tennessee Bank also has been looking around for new space as its parent company faces a similar big-picture situation. So developers may not be able to bank on the banks until the economy improves and banking industry’s financials improve.

A Regions move would leave the building that now bears its name with two big holes to fill: Bass Berry & Sims has signed on to fill 185,000 square feet at the Pinnacle at Symphony Place when that building opens in 2010.

On the flip side is Cigna Government Services, which has leased 35,000 square feet at Regions Center and could end up expanding there. The company also has 850 people in MetroCenter.

Cigna may become the typical tenant for the 34-year-old office tower across the street from City Hall. Brokers have said its space is becoming more suited for back-office tenants and the talk has been that the building needs a substantial update.

Filed under: City Business
By: Kosh III on 12/31/69 at 6:00

Why does Regions need to move. It's fine where it is. No wonder bank fees are skyrocketing, we are paying for corporate "pride" so a bunch of overpaid executive slackers can preen.

By: nashbeck on 12/31/69 at 6:00

I think this is great. Signature Tower is absolutely breath-taking. TennJack-- If the convention center is approved, that will help lenders give a loan for the hotel Palomar. If Regions Bank signs the 100,000 sf lease that would take care of the office portion. Tony already has 105 sold contracts, giving him about 53% leased on the condo section, and only more will likely come once construction is started.Keep working hard Tony Giarratana!! Bring Signature Tower to life here in Nashville!!!!

By: TennJack on 12/31/69 at 6:00

Richard, do you ever read the wall street journal anymore ? Regardless of whether Tony signed a 100,000 sf lease he would still need a contruction loan, more presales and almost $90 million in equity as well as a contractor willing to build his dream at a price that works for everyone. Candidly, given the state of the environment I think you squander your own credibility to suggest otherwise.Reporting that the improbable signing of a 100,000 sf Regions lease would "likely" enable Tony to start this project is about as absurd as an assertion that a vote for MTC would lead to an improvement in Davidson County schools. I think both scenarios are just a touch more complicated than that. Food for thought.

By: TennJack on 12/31/69 at 6:00

nashbeck, the problems that remain for tony's signature are many. With or without an office tenant he has virtually no prospects for obtaining a construction loan. Banks aren't even making easy loans anymore let alone funds for wildly speculative condo/hotel/office projects. They are also requiring much more guaranty support and equity and, in the case of condos, they're requiring much higher presales and deposits. As far as I know Tony's clinging to the same deposit policy he had 2 years ago and still thinks he only needs to have 50% of his condos presold. The world has changed dramatically in a year and I can't imagine that most of his early buyers haven't been spooked by all the bad economic news since they originally signed their contracts.As to the suitability of this tower for a big wedge of class a office space in the middle, there are obvious problems with column locations, poor efficiencies and floorplates that are too small for a tenant expected to pony up top dollar for class a rent. And you can't point to other Nashville class a buildings like 5th 3rd as proof that this is possible because the rent expected/necessary for Signature to work will be much higher than these other 15-20 yr old comps. I can't think of a single new class a project anywhere in the country that has hotel, office, retail and residential in the same building. There's a reason (feasibility) for that and it's not because nobody ever thought to try it. Then there is the issue of experience. Without Novare or a major co-developer Tony didn't have the resume to obtain a $200 million construction loan in the go-go days. Banks are now much more conservative about who they'll provide a loan if they'll provide one at all. Even if he had a rich uncle that would make him the loan he'd need a rich aunt to give him the +/-$80 million in equity required to obtain the loan from the uncle.And even if all those bases were somehow covered he'd still have to figure out how to get it built at a cost that he can afford. Turner walked away and another big firm in Nashville wasn't even willing to invest the time to give him a price. I'm not aware of anyone even pricing the job during the last few months. Again, none of this should be a big surprise but either Richard's a big Tony fan or he hasn't worked very hard to familiarize himself with all the major issues beyond a 100k sf tenant that would need to be addressed before Signature can be considered "likely" to get started.