After years of being on the market, the Bon Carré Business Center has been sold to a South Carolina-based company, which plans on working with community leaders in redeveloping the property.
EdgePWR, of Mount Pleasant, South Carolina, which concentrates on real estate for data centers, bought the 712,000-square-foot center on Florida Boulevard, said officials with Beau Box Real Estate. Beau Box handles leasing and manages Bon Carré, which had been transformed from the former failed Bon Marché Mall on Florida Boulevard into a business center development.
The sale of the center had not been filed with the East Baton Rouge Clerk of Court’s office as of Tuesday afternoon, but officials with EdgePWR said the sale price is “a drop in the bucket” of what they plan to invest in Bon Carré.
“Every community leader we met with had a story about Bon Carré,” said Jim La Marche, a principal with EdgePWR. “It’s a meaningful property for the city and our hope here is to amplify it and make it a focal point of the city again.”
The center is about 60% occupied. Bon Carré has a noteworthy mix of tenants that include some of Baton Rouge's biggest public and private employers. Blue Cross and Blue Shield of Louisiana, Turner Industries, Venyu, H&E Equipment Services, Capital Area Human Services, the Louisiana Department of Health and and the Baton Rouge Police Department all have operations in the center. It also houses the Nexus Louisiana Tech Park business incubator, operated by Research Park Corp., a former co-owner that Bon Carré bought out. The former Montgomery Ward building is separately owned by Cox Communications.
La Marche and Matt Chapdelaine, another principal with EdgePWR, said Bon Carré is a blank canvas that provides a large footprint for growing companies. They plan on working with tenants in the Tech Park who need more space.
“The Tech Park is doing a phenomenal job of incubating businesses,” La Marche said. “We would like to see them graduate into our space.”
The company plans on making some improvements to the property, such as creating more natural light in the building and adding green space. However, La Marche and Chapdelaine said it will be up to the community what happens with Bon Carré. “The building belongs to Baton Rouge,” La Marche said.
EdgePWR has a variety of real estate holdings, including office space, multifamily housing and hotels in markets ranging from Los Angeles, Phoenix, Chicago, Charleston, South Carolina and Omaha, Nebraska. The company specializes in data centers in secondary and tertiary markets.
La Marche said with more people working from home, there’s a need for companies to have data centers closer to home. “There are people running data on the other side of the country,” he said.
EdgePWR has been looking at Bon Carré for about a year. The company first became aware of the facility when they were working with Venyu, a data hosting firm that is a tenant.
The previous owners were Bon Carré Business Center II LLC, which is owned by Commercial Properties Realty Trust, the for-profit real estate arm of the Baton Rouge Area Foundation. The owners took out a $41.5 million loan in 2007 and defaulted in December 2017, owing $39.5 million on the remaining principal, plus interest and fees.
The previous owners put the property up for sale in 2016, but attracted only one potential buyer, who made an offer that was lower than the amount owed on the loan.
In March 2018, a trustee for the mortgage lender filed suit against the owners, seeking repayment of the mortgage. The property was seized by the U.S. Marshals Office. In August 2018, U.S. Bank National Association, the trustee for the lender, was the winning bidder at a U.S. Marshals sale. At the time, the bank said it planned to sell the center, because it wasn’t in the business of holding real estate.
But several attempts to sell the property at auction were unsuccessful.
Local real estate experts said the problem was Bon Carré was competing for large-scale tenants needing temporary space from Cortana Mall. Cortana shuttered in September 2019. And with so many people working from home, demand was limited for the kind of space Bon Carré has to offer.
At the time of the foreclosure filing, Charles Landry, an attorney representing Bon Carré said occupancy rates were about 68%, dropping off from 80% from downsizing by many of its long-term tenants. Those include some state government agencies that have offices in Bon Carré. Also, some engineering firms that had set up in the development after Hurricane Katrina moved out after their contracts for disaster recovery work ran out.
Landry noted at the time that a 12% dip in occupancy for the massive size of Bon Carré was a major issue. The center has 772,000 square feet of office space, so that drop is equal to the size of an entire office building being vacated, an amount that's difficult to fill, he said.
Bill Sanders, of Beau Box, said he’s excited about the potential for Bon Carre. Sanders and Jessie Babcock represented the sellers. “Bon Carre is a property that thrives on hands-on ownership, and the new owners have been very active in not only committing to making improvements to the property, but in meeting face-to-face with current and future tenants,” he said.