Chase Tower Changes Hands

Publication: CHARLESTON DAILY MAIL
Published: 03/01/2007
Byline: George Hohmann, Daily Mail Business Editor

JPMorgan Chase has sold its downtown Charleston office tower to a Toronto-based real estate investment fund.

The sale price was not disclosed. Chase spokeswoman Nancy Norris said the bank sold a total of 33 buildings, including Chase's buildings in Huntington and Clarksburg, for $460 million. "We weren't individually pricing the buildings because we sold them as a package," she said.

Asked why Chase sold the properties, Norris replied, "Our strategy is to hold long-term leases as opposed to being a landlord." 

The Chase Tower, at 707 Virginia St. E., was the city's first modern, glass-curtain high-rise. It has 20 floors, with 17 above ground, and a 460-car underground parking garage.

Charleston National Bank, which built the skyscraper, moved into it in 1969. Charleston National became a part of Key Centurion Bancshares Inc. and in 1993 Key Centurion was bought by Banc One Corp. Banc One later changed its name to Bank One.

JP Morgan Chase & Co. and Bank One merged in 2004. Later, the company decided to use Chase as its consumer and commercial-banking brand.

The 33-building deal apparently occurred in the third quarter of 2006, about seven months after the signs on the bank's buildings in West Virginia were changed from Bank One to Chase to reflect the 2004 merger of the two companies.

Chase didn't issue a press release about the deal. The buyer, Brookfield Real Estate Opportunity Fund, issued a statement in October but didn't mention the West Virginia properties. Instead it highlighted the properties it acquired in Chicago, Phoenix, Dallas, Milwaukee and Baton Rouge.

The fund said the deal involved buildings in 10 cities with a total of 5.3 million square feet of space. On its Web site, the fund says the deal included a long-term lease back with Chase "for a significant amount of the space."

The fund also says it "is repositioning underutilized space and maximizing revenue within this portfolio through lease ups and expense management."

Howard Swint, a broker with the Charleston-based commercial real estate company NAI McCabe Henley, said the company has been retained by Brookfield to manage its West Virginia properties.

Swint said McCabe Henley's task is "finding tenants and any other opportunity that can affect the bottom line."

Regarding the Chase Tower in Charleston, "One of the things we're taking a close look at is the parking garage," Swint said. "We're hoping to confirm that it was originally built to accommodate a new structure on top of it. If that's the case, we're also looking at selling or leasing the air rights above it for a future project."

Swint said the Chase Tower is slightly less than 90 percent occupied. He said suites as small as 1,000 square feet are available. He said the entire 10th floor, which contains 12,635 square feet of space, is available in shell condition.

Brookfield Real Estate Opportunity Fund is managed by Toronto-based Brookfield Asset Management Inc., an asset management company. On its Web site the fund says it "invests in underperforming real estate properties in North America including office, retail, industrial and multi-family." The fund says it has $1 billion in assets under management.

In August 2005 the company said it was considering selling the Charleston tower. Mark Prince, who heads the company's operations in the state, said at the time, "It's something we've done with some frequency around the country." He said the possible sale was not related to the merger of Bank One and Chase.

Bank One almost sold the building in 1999. The asking price was $25 million. But the company underwent a management change and in late 2001 the company altered course and announced it would invest $15 million to renovate the structure.

Three of Charleston's six modern downtown office towers have changed hands in the past five years. In addition to the Chase Tower: