A Vantage Point for Business

Downtown Draw Brings Tenants to RSA Dexter Avenue Building

May 2016
By David Zaslawsky   
Photography by Robert Fouts

He could have pointed to the location on Dexter Avenue near the Capitol or the RSA Datacenter on the sixth floor for two of the reasons firms are leasing office space at the RSA Dexter Avenue Building.

Yet, instead, Joe Toole, director of real estate for the Retirement Systems of Alabama, said the top two factors are the 350,000-square-foot building itself and downtown Montgomery.

The $190 million building, which at one time housed the Alabama Supreme Court that is now enclosed in glass, and was once a Masonic Temple, is an absolute showpiece complete with artwork and a four-story lobby/atrium with limestone walls and a grand staircase.

There is nothing like it. It’s an incredible conversation piece and sure to leave a lasting impression on any client visiting a tenant. Sure, RSA built the much larger 23-story RSA Tower with nearly 615,000 square feet of office space, but the Dexter Avenue Building is truly unique. “In our opinion, what we have compared to what was available downtown – this is the best of the best,” Toole said.

A new building offers what Toole called “a blank plate,” which enables tenants working with the RSA’s design team to “create space that uniquely meets their needs. There are often times that businesses grow in a space and become inefficient over time, and I think that’s what happened to a lot of these firms,” he said about current tenants.

“When we have a new product, that in itself creates buzz,” Toole said. “RSA had built a solid reputation as a landlord.”

Downtown is the key. Toole said that has been the major drawing card – firms wanting to return to downtown or come to downtown. “I think there were a lot of businesses that had moved out east and with the redevelopment of downtown and the increase in nightlife and activities and restaurants to enjoy during the day – these businesses started considering coming back to downtown,” Toole said. “I think that’s what we’re seeing.”

Seven of the 20 tenants through March were law firms, including some of the state’s largest by number of attorneys: Bradley Arant Boult Cummings, Maynard Cooper & Gale, PC, and Burr & Forman, LLP.

The first tenant was Community Newspaper Holdings Inc., and its lease began a few months before the building’s official dedication on Oct. 27, 2011. About a year later, the RSA Datacenter was added. “It’s been a convenience for those that are in the building to not have to build out data facilities within their space,” Toole said. “They can be within our building and have their data here on the sixth floor.”

The building is about 60 percent leased, which is behind the pace of other RSA office buildings. “Usually with our office buildings, we like to within a year or two be where we are now – 50 percent range – and usually (after) four or five years you like to be what the industry considers is full-leased at 90 percent,” Toole said. The Great Recession upended that timeline. “We started feeling the effects of the downturn right when the building was dedicated,” Toole said. “Timing hurt us bad. That’s taken us aback. We are probably a couple of years behind where we would like to be, but we are pleased with where we are. I think that the recovery in the real estate market is starting to gain some momentum.”

He expected three more tenants to sign leases in April and combined would have 30,000 to 35,000 square feet of office space. The range currently is some tenants with about 2,500 square feet to tenants such as BB&T and Community Newspaper Holdings Inc. with between 45,000 to 60,000 square feet.

“It’s very important what your tenant mix is … each subsequent tenant becomes associated with the other tenants because they’re all living together here in the building,” Toole said.

Those living there enjoy “fantastic” views, Toole said, of the Capitol, Dexter Avenue, Dexter Avenue King Memorial Baptist Church and from the back of the building: Alabama River and Riverwalk Stadium. “There’s not a really bad vantage point,” he said.