In a sign of increasing commercial interest in Greenville’s Pettigru Historic District, Babcock Investment Co. has scrapped plans to convert a nearly century-old schoolhouse into condos and townhomes and is now building professional office space at the site while expanding the project’s scope.
Casting aside plans to retrofit The Hayne School at 10 Toy St. with 14 condos and 18 townhomes, the Florida-based developer has already spoken with a variety of prospective tenants who could bring up to 75 knowledge-based workers to the heart of Pettigru as early as February.
“I think there is a desire to be in the Petttigru district,” said Christopher Babcock, managing partner of the Greenville office of his family’s firm. “It’s not technically in the central business district but still, you’re very much a downtown location and you don’t get the hustle and bustle of the downtown traffic and the parking nightmares,” he said, reviewing remodeling work inside the three-level 1919 structure.
“The tech and creative are definitely people who have shown some interest. … We had some interest from law firms as well,” Babcock said, citing marketing, software design and engineering firms as other possible tenants.
The company’s decision to halt residential plans reflects a pent-up demand for close, yet affordable office space in the city, Babcock said.
Professional firms have been scouting sites in the West End, east of Main Street and increasingly in Pettigru, a quiet, verdant neighborhood, with the tilt from residential to commercial activity in Greenville’s largest historic district picking up speed.
According to city licensing data, the number of businesses in Pettigru rose from 121 in 2012 to 134 in 2016. Year-to-date 2017, 144 businesses are licensed to operate in the district, a 7% increase over the prior full year.
“I’d be hesitant to say it will become anything but more popular,” said David Sigmon, sales associate at Coldwell Banker Commercial Caine, the firm representing The Hayne School project whose offices are at the edge of the district.
To help lure tenants, Sigmon and Babcock are emphasizing the project’s “cool space” vibe, up to 75 free on-site parking spaces and 4,550 square feet of new outparcel space to be built on one side of the schoolhouse.
The lessee or purchaser will be able to brand the additional space, scheduled to open in fall 2018.
“That, in our experience, is in high demand,” Sigmon said.
In the main building totaling 18,322 square feet being readied for opening next February, employees will walk across maple-stained original hardwood flooring under 14-foot-high ceilings with exposed beams and occupy flexible workspaces.
“That creative loft feel,” Babcock calls it. “The ideal is we’re going to leave this in very wide-open, shell condition.”
By shifting gears on the Toy Street project, Babcock said, his company was able to achieve a “better risk profile” with a total development budget of $3.5 million-$4.5 million versus $9 million-$10 million with a residential plan.
The current asking price for Class B space at The Hayne School is $26 per square foot per year, full-service with free parking.
In comparison, at the end of the third quarter, the average ask rate for Class A space in Greenville’s CBD stood at $26.11 per square foot, CBRE said.
Sigmon of Coldwell Banker Commercial Caine put the current range for brand-new office space in the CBD at $28-$32 per square foot but “parking can add another $2.50 per square foot,” he said.
With downtown vacancies now at 13.5 percent, “a new record low vacancy rate appears likely during this real estate cycle,” the CBRE report noted.
Updated plans for The Hayne School project are being shared with the city’s Design Review Board and a public hearing will be held, Babcock said.
While inquiries have been made about The Hayne School, firms desiring less space are also finding the historic district attractive, drawn to the neighborhood by its blend of Southern serenity and easy access to downtown and the interstates.
Chris Webb, broker-owner at Realty-Advisors Carolina, who in 2014 purchased an office condo at Pettigru Place around the corner from the old schoolhouse, is happy to have left his former location at Interstate 385 and Woodruff Road.
With traffic, Webb said it’s a better location, and he can now travel to showings more quickly with the interstate spur just two blocks away.
“I’m less than a block from six attorneys that specialize in real estate closings,” he said.
Lil Glenn, broker-in-charge at Lil Glenn Co. representing Pettigru Place, said the 10 condos built in the 1980s, each with two floors and an unfinished basement, remain competitive in the market. Interest has increased about 25% over the past year, with two units currently available for $235,000 and $250,000, she said.
“This is a way to pay a reasonable price versus a higher downtown price. … You’d probably pay around 40% higher” for a comparable unit in the CBD, Glenn said.
Across the historic district, the rows of homes built mostly between 1910 and 1930 continue to be coveted by law firms, with at least 18 doing business on Pettigru Street alone.
“They like the gravitas of these older buildings,” said Webb, noting that alleyway parking allows ample space for client parking out front.
“Everyone that I know is renting,” he said. “A lot of these still need a lot of structural work. … It’s almost kind of a better fit for someone who spends eight hours a day there,” he said.
One attorney who left a converted property in Pettigru for more space on South Church Street said many of her colleagues continue to find the historic district appealing.
“The rent and sale prices in the Pettigru district still remain very attractive,” said Courtney Atkinson, co-owner of Metcalfe & Atkinson, LLC. “And then you have just the historic value … a certain charm that people enjoy.”
It’s a value proposition that Chris Babcock hopes will lead to full occupancy at his new “cool space” on Toy Street when it opens in February.
“We’re blasting forward on the construction side,” he said.