July 4, 2003
Jane Bennett, American City Business Journals Inc.

Cathedral Gets Top Rent

ST. AUGUSTINE — Renovation is complete on the tallest Class A office building in St. Augustine. Space in the six-story Cathedral Place Office Tower averages $25 a square foot, a dollar higher than comparable office space in Ponte Vedra Beach.

Tenants pay a higher rent because the building sits in the heart of the city's historic district, it's close to the water and it has a big parking lot, brokers said.

"It's simply a supply and demand issue," said John W. Green, managing general partner of The Arbors Development Group in Ormond Beach and Virtú Investments of Scottsdale, Ariz., owners of the property.

Building new office space in St. Augustine is tough. "There are high barriers like zoning laws and parking," said Oliver Barakat, senior associate with CB Richard Ellis in Jacksonville.

Office space in the Baymeadows/Butler area leases for $18 to $19 a square foot; in Downtown it's $18 to $23; Beaches get $19 to $24, said Bob Retherford, president of Property Services Inc.

Wachovia is the major tenant in 42,000-square-foot Cathedral Place. The building was about 80 percent leased when the investors bought it in November 2001.

Average rental rates at that time were $15 a square foot, Green said. "The building was tired, at best. It was definitely run down."

St. Augustine's Historic Review Board froze property taxes for five years as an incentive to the investors.

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