A SWEPCO employee posts a disconnection notice on a door of Regions Tower complex in Shreveport, La., Wednesday, Aug. 21, 2024.
Regions Tower in Shreveport, La., Tuesday, Aug. 20, 2024.
A SWEPCO employee posts a disconnection notice on a door of Regions Tower in Shreveport, La., Wednesday, Aug. 21, 2024.
"It's been the talk of the building," one receptionist at a Regions Tower business said Wednesday. "How are we going to walk up 22 floors to get to our office?" What happens next is a very real concern. At 10:30 a.
m. Wednesday, four SWEPCO employees walked from their offices at MidSouth Tower to Regions Tower with electrical disconnect flyers in hand. SWEPCO employees discuss their plan for posting disconnection notices in the Regions Tower complex in Shreveport, La.
, Wednesday, Aug. 21, 2024. The electricity, said the flyer, "is scheduled to be disconnected on Monday, August 26, 2024, or after for an undetermined duration of time.
" "This is nothing we want to do," said David Langston, the head of Customer Services and Marketing at SWEPCO, knowing that once the signs were posted the genie was out of the bottle. Steve Brocato, SWEPCO's Key Account Manager for downtown buildings, checked his phone again to make sure payment had not been received in the minutes it had taken them to walk to 333 Texas St. It had not.
He went in to see the building's local property manager one last time. With still no payment, the flyers began going up. SWEPCO employees post a disconnection notice on a door of Regions Tower in Shreveport, La.
, Wednesday, Aug. 21, 2024. The crew split up, taping flyers to the inside and outside of exterior doors.
They went inside, posting a sign at the security desk, in elevators and on interior columns. Justyn Dixon, the President and CEO of the North Louisiana Economic Partnership walked by as the signs were going up. "We had no idea about this," he said.
"We're going to try to resolve this as soon as we can," Regions Center Property Manager Forrest Fegert told The Shreveport-Bossier City Advocate. "Commercial real estate is suffering around the country. We're a large company, too.
" As he turned to take a phone call, he said, "I love our tenants, that's what bothers me the most." Regions Tower in Shreveport, La., Tuesday, Aug.
20, 2024. The flyers were posted only after multiple requests for payment. The Shreveport-Bossier City Advocate has learned that the Regions Tower property is more than 90 days past due on a bill that is in the many thousands of dollars.
The Shreveport-Bossier City Advocate attempted multiple times to get comments from the building's owner, the Hertz Investment Group of Sherman Oaks, California. As of Wednesday afternoon, there had been no response. The 24 story and adjacent 16-story historic Regions Building are considered downtown's most upscale Class A office space, home to a sweeping light-filled marble atrium with a 50-foot waterfall, an auditorium, bistro, covered parking, security, and other amenities.
It has long been "the" business address for companies ranging from wealth management and financial planning, to legal, oil and gas, and CPA firms. Regions Tower has also long been the bellwether of downtown property occupancy, with rates of 90% and above. Rent occupancy numbers, though, show one of the current challenges to high rise office space.
Occupancy in the tower is 80% at present; at the Regions Building, once home to Regions Bank, it is 83%. purchased the Regions property in September of 1999 for $24,968,507. At one time, it was one of 46 U.
S. properties in their portfolio. The era post-pandemic has not been easy for the Hertz group.
Office vacancy rates have stayed high nationwide as tenants have downsized, and some tenants have chosen to move out of congested downtowns. The increased competition for tenants has also put downward pressure on office lease rates. In April 2024, Hertz in Jackson, Mississippi.
The company went into delinquency but not foreclosure on the Energy Center building in New Orleans in October 2023 after nonpayment on its $56.5 million mortgage. William "Zev" Hertz, Chairman, Chief Executive Officer and President of the family-owned property group, said when the Energy Centre delinquency occurred, his firm was "hit with a surprise environment" just as the refinancing needed to happen.
is one of five Hertz properties in New Orleans. All carried commercial mortgage-backed security loans, also called CMBS loans, a category of loan that is seeing higher delinquency rates across the U.S.
The majority of the CMBS loans on New Orleans office space owned by both Hertz and other companies will mature between October 2024 and early 2026. Meanwhile, tenants of Regions Center are concerned about what Monday may bring. Denis Poljak is the Managing Director of which has offices on the 22 floor of Regions Tower.
His job is not one that can wait "This is unexpected news and surprising, and we hope it will be resolved quickly," he told The Shreveport-Bossier City Advocate. "We prefer to be here at our office at Regions Tower along with our friends and clients. We have a lot of friends and clients who are also tenants in the building.
"Our work will continue uninterrupted. That is one good thing that came out of COVID, it taught us how to work with things that come out of nowhere. People have become experts at working remotely, and firms all have contingency plans that are almost second nature.
" Mike Adkins, co-managing member of agreed. "We'll just have to respond. We'll see.
Hopefully there will be a resolution before then, but we'll just have to see what it is. It's an inconvenience, but will it keep us from doing business? The answer is no. We'll be able to do business whatever.
".
