Source: Birmingham Business Journal – by Lauren B. Cooper
BBVA Compass recently signed a multiyear lease for more than 50,000 square feet of space at SurModics Pharmaceuticals’ new facility off Lakeshore Parkway.
The bank is taking the space in SurModics’ 130,000-square-foot office tower, which it purchased in 2008 along with a distribution center that was owned by Saks Inc. and now serves as a consolidated campus for SurModics Pharmaceuticals.
BBVA Compass declined to comment on the specific use of the space, but said it will be additional square footage for the Spanish-owned bank that calls Birmingham home for its U.S. operations.
A recent quarterly report for BBVA revealed the level of confidence the parent company has in BBVA Compass, which constitutes 53 percent of its U.S. assets, particularly when integrating acquired banks.
“Compass has thus proven to be a solid foundation for growth for the BBVA franchise’s subsequent construction in the United States,” said the report of the integration of Guaranty Bank, a failed Texas-based institution that it bought last year for $12 billion.
BBVA said lending to customers at BBVA Compass increased by 11.3 percent year-over-year and deposits rose nearly 32 percent. It closed the quarter with a net profit of nearly $33 million.
The lease leaves SurModics plenty of room for future growth and is a good sign things are picking up in the market, said Dan Lovell, the broker with Graham & Co. that represented SurModics. Max Taylor and Mike Lawley represented BBVA Compass, he said.
“There’s definitely more activity than any period of time last year,” said Lovell. “February through May have been the most active in 18 months.”
And companies that have an idea where they are headed are realizing now is a good time to make decisions for the long term, agreed Joe Sandner, whose Sandner Commercial Real Estate handles office leasing throughout Birmingham.
“Things are heating up across all markets,” he said. “Folks are looking to do business and a year ago they weren’t.”
But the market is still not healthy, he said, with commercial real estate sales transactions still down and property owners coming to grips with pricing.
Representatives from SurModics did not return phone calls in time for press. But the company said in a quarterly conference call the multiyear BBVA Compass lease that will go into effect later this year will reduce the company’s operating expenses. However, the company did take a $2.1 million impairment charge in the quarter related to the consolidated facilities in Birmingham, which it said reflected the decline in the commercial real estate market.
Minnesota-based SurModics bought Birmingham’s Brookwood Pharmaceuticals in 2007, creating SurModics Pharmaceuticals and furthering Brookwood’s technology solutions for pharmaceutical, biotech and medical devise companies.
In 2008, SurModics announced a $30 million expansion project that would turn the shuttered Saks Inc. headquarters and distribution center off Lakeshore Parkway into a manufacturing and research and development facility, creating 300 jobs. It moved in earlier this year, consolidating its Birmingham facilities.