Intrator: Major spec office commitment 'imperative' to success of $604M Pinch phase
JACOB STEIMER | MEMPHIS BUSINESS JOURNAL
Speculative office space is "imperative to the success" of a $1.1 billion Pinch District development, Tom Intrator told a City Council committee Tuesday morning.
With Intrator's background in suburban multifamily, he wants almost 60 percent of the space built in the project's first phase to be residential. But, those 942 apartments can only succeed, he said, if companies bring jobs from other cities.
"We want to do as much residential as possible," Intrator said during the Nov. 19 meeting. "[So, we] need to bring more demand from outside the city."
To accomplish this, Intrator said he's going to do something that has long been viewed by local developers as far too risky: construct office space speculatively.
"We've committed to at least doing 150,000 square feet of spec office," Intrator said. "I think it would be very difficult for us to fill up our office space if we’re not committed."
Most companies don't consider leasing office space earlier than 18 months before they need to occupy it, Intrator said, which isn't enough time to develop office towers. He said he doesn't expect to sign his first office lease until he's breaking ground on the $604 million first phase, which calls for a total of 222,000 gross square feet for office use.
The phase's 169,000 square feet of retail and 406 hotel rooms are largely meant to support the office users, Intrator said.
"[This will] create a neighborhood that’s vibrant enough to attract out-of-town employers," he said.
Intrator's firm, 18 Main LLC, will ask the City of Memphis, Shelby County, and the State of Tennessee to approve multiple incentives, including a 30-year PILOT (payment-in-lieu-of-taxes) that would be bonded against as if it's a TIF (tax-increment-financing) incentive. That way, the developers can get an initial cash infusion instead of tax savings over 30 years.
Presuming approvals are granted, ground would be broken in 18 months, and phase one would be completed within two years.
In addition to managing partner Intrator, 18 Main is comprised of partner Shay Yadin and VP of investments Joseph Ammar. Architecture firm LRK, construction firm Montgomery Martin, and communications firm DCA are also named as being involved in the project.
Phase one calls for:
Residential: 976,000 gross square feet / 801,000 net square feet, approximately 942 units
Hotel: 290,000 gross square feet / 240,000 net square feet, 406 rooms
Retail: 169,000 gross square feet / 160,000 net square feet
Office: 222,000 gross square feet / 200,000 net square feet (at least 150,000 square feet to be built spec at the start of the phase)
Total: 1.66 million gross square feet and 1.4 million net square feet of space
Phase two calls for:
Residential: 611,000 gross square feet / 501,000 net square feet, approximately 586 units
Retail: 47,000 gross square feet / 45,000 net square feet
Office: 531,000 gross square feet / 478,000 net square feet
Total: 1.19 million gross square feet / 1.02 million net square feet