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Historic downtown Sterick building hits the market

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Big day for Memphis development news:

Sterick building hits the market with 'serious offers' coming in, RFP to follow

https://www.bizjournals.com/memphis/news/2018/11/12/sterick-building-hits-the-market-with-serious.html

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It's been empty since the 1980s, but Downtown's iconic Sterick Building may not be vacant forever.

The three related families that own the land at 8 N. B.B King Blvd., which the building sits on, have listed it for sale with CBRE Inc. and hope to find the right developer to bring it back to life.

"Its time is coming soon," said Henry Grosvenor, one of the heirs. "We've had initial conversations with quite a few [developers]. … We engaged CBRE to put together a marketing effort to do a national and international request for proposals (RFP)."

Though there are many hurdles between the property being listed for sale and its eventual revitalization, the listing is a significant step for the Sterick, which has been stuck in the mud for decades.

With Downtown development heating up, Grosvenor said he had recently started hearing from multiple local developers interested in the property and was receiving "some pretty serious offers." He and his relatives hired CBRE to determine interest from non-Memphian developers then decide which developer to work with.

CBRE began marketing the property on behalf of the Grosvenor, Petree, and Jefferds families about a week ago. In the past week, brokers Johnny Lamberson and Terry Radford have received "an awful lot of inquiries from all across the country", Lamberson said.

"The timing right now is as good as it has ever been, with what's happening Downtown and in downtowns all over the country," Grosvenor said.

"We have the best, most iconic building available in Tennessee," Lamberson said.

CBRE's marketing efforts will last 35 more days. After that point, an RFP will be issued to interested parties, who will have 45 days to complete.

Lamberson said right now he expects potential developers to pursue a mixed-use project, but there are a variety of options.

"We’re all in discovery phase of what this thing could be," Lamberson said.

A redevelopment of the building wouldn't be without its challenges. To start with, getting multiple family members to agree on real estate transactions is notoriously tricky. Lamberson said he's enjoyed working with all the family members, who are "very involved" and have "interesting input."

Also, the families only control the land, not the building. Charles Niles Grosvenor Jr. helped negotiate a 99-year land lease in the late 1920s, which allowed developers R.E. Sterling and Wyatt Hedrick to build the Sterick Building in 1929.

New York-based AXA Equitable Life Insurance Co. has controlled the land lease — which has fewer than 10 years remaining — since the 1970s. Grosvenor said AXA is supportive of the building being sold and its redevelopment. The insurance firm could not be reached for comment Monday.

On top of these logistical challenges, the building itself has issues. The 351,000-square-foot structure has low ceilings, some asbestos, and some lead paint.

But those challenges, Grosvenor said, are neither worse than in similar buildings of its age nor insurmountable.

"Crosstown [Concourse] was incredibly complex, and this would probably be similar," Grosvenor said. "But, it's a priority for the city, county, and state. … The key is to get the right developer involved."

 

 

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Both the Sterick and 100 North Main buildings are in horrible condition.  Sterick is worse off and has been empty and deteriorating since 1986 and tied up in ongoing legal disputes.  100 N Main, once HQ of Union Planters Bank,  has been in big decline for many years and totally shuttered  for almost 5.  The local news media have done stories about fires, falling exterior slabs and such. Rehabbing either would be a mammoth expense and risk in this already moribund area of north downtown. Both of these towers were once icons of the downtown Memphis skyline.  The nearby government area has also seen TN  state offices move away from downtown to other parts of town. A new hotel is badly needed and planned as the Cook convention center is being  upgraded. 

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56 minutes ago, dxfret said:

Both the Sterick and 100 North Main buildings are in horrible condition.  Sterick is worse off and has been empty and deteriorating since 1986 and tied up in ongoing legal disputes.  100 N Main, once HQ of Union Planters Bank,  has been in big decline for many years and totally shuttered  for almost 5.  The local news media have done stories about fires, falling exterior slabs and such. Rehabbing either would be a mammoth expense and risk in this already moribund area of north downtown. Both of these towers were once icons of the downtown Memphis skyline.  The nearby government area has also seen TN  state offices move away from downtown to other parts of town. A new hotel is badly needed and planned as the Cook convention center is being  upgraded. 

You don't seem terribly confident in either project. I got the impression that 100 N Main was good to go, that the building was going to be stripped to the core and reclad.

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I would have torn down the Cook and made the Pyramid the Convention Center before Bass got a hold of it. After of course removing  the steel cladding and replacing it with blue tinted glass the kind of which sits atop the Pyramid. Maybe even adding a couple of smaller pyramids next to it as demand warranted. This would have facilitated the rehabilitation of the Pinch District with new hotels AND......what about moving the zoo just north of the Pinch and making it the northern terminus for the streetcar?

100 North Main I think is salvageable......the Sterick is iffy-real iffy. The Civic Center plaza was built in the early 70's and has the look by 1971.

Nice looking if you're the Brady Bunch but not so much if you're not.

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The real question is how deep are the pockets of an investor and how much confidence do they have in Memphis, especially downtown?  It would be far more cost efficient to demolish both 100 N Main and Sterick and build something new that is tailored to today’s needs.

A huge problem with 100 N Main is the tiny parking garage with turns so tight even compact cars can barely navigate it.  The building has all kinds of other structural problems and has badly deteriorated. A few years ago the Commercial Appeal ran a photo essay of the interior spaces and shows just how far gone the building has deteriorated.  Sterick Bldg  is older still and in worse shape  

Also a huge expense in rehabilitating any building in Memphis is to add the required seismic protections.  Memphis is right on the New Madrid fault and it is hugely expensive to bring such structures up to current code.  They had to spend a tremendous amount of $ on the Pyramid to retrofit for earthquakes before it became a Bass Pro Shop.  

I lack confidence in both projects simply because downtown Memphis and has a long history of failed projects. The One Beale proposal has been postponed and scaled back many times and nothing has developed. The north end of downtown is especially problematic, with so many vacant lots and dead space.  The Bass Pro Shop Pyramid is isolated from downtown as it’s cut off by the interstate bridge and the nearby Pinch area will only really begin to develop over by St Jude Hospital. 

 

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6 hours ago, dxfret said:

I lack confidence in both projects simply because downtown Memphis and has a long history of failed projects. The One Beale proposal has been postponed and scaled back many times and nothing has developed. The north end of downtown is especially problematic, with so many vacant lots and dead space.  The Bass Pro Shop Pyramid is isolated from downtown as it’s cut off by the interstate bridge and the nearby Pinch area will only really begin to develop over by St Jude Hospital. 

I understand that feeling. I am always skeptical of new high-rises proposed for downtown Knoxville. Nothing has gone up there since the 1980s and several projects have failed since then. Currently, a 26-story residential tower is proposed for downtown Knoxville. We shall see if it turns out. I think it's too ambitious for the market.

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On 11/28/2018 at 3:49 PM, bnacincy said:

I would have torn down the Cook and made the Pyramid the Convention Center before Bass got a hold of it. After of course removing  the steel cladding and replacing it with blue tinted glass the kind of which sits atop the Pyramid. Maybe even adding a couple of smaller pyramids next to it as demand warranted. This would have facilitated the rehabilitation of the Pinch District with new hotels AND......what about moving the zoo just north of the Pinch and making it the northern terminus for the streetcar?

That would have been cool but I believe that Bass Pro did an excellent job renovating the Pyramid, and I initially thought it was silly that the city allowed Bass Pro to take over the property. There are nice plans for a major Pinch district redo between the Pyramid and St Jude's but there hasn't been any news on the project in several months.  The real shame is the freeway and that monstrosity of the I-40/Riverside Dr interchange that cuts that area off from the rest of downtown.

I'm excited to see the Sterick building come back to life.  I graduated from the University of Memphis and love seeing the positive steps the city is making.

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