The Wisconsin billionaire owner of downtown Boise’s BoDo is now also the owner of the Chicago-style Jefferson Place office building at Ninth and Jefferson streets.
The five-story, brick structure built in 1914 was acquired June 9 by Hendricks Commercial Properties in Beloit, Wisconsin, owned by Diane Hendricks, considered the second richest self-made woman in America.
Hendricks Commercial Properties acquired the office building where U.S. Sen. James E. Risch has his Boise office from Jacksons Food Stores Inc., itself a multi-billion dollar Boise company that has owned the structure long known as the Elk’s building since 2000.
The assessed value of Jefferson Place is $4.89 million, according to Ada County Assessor records.
“That building is really the sort of product we like,” said Rob Gerbitz, CEO of Hendricks Commercial Properties.
Gerbitz said Hendrick expects to redo the lobby and complete some tenant improvement work but leave Jefferson Place mostly as it is.
Midwesterners are gobbling up downtown real estate. David Baum of Chicago owns nearly the entire block of Eighth, Idaho, Ninth and Bannock streets.
“We really like the Boise market,” Gerbitz said. “We just constantly keep our eyes open for what becomes available. We’ve looked at The Owyhee. It’s a great building. We like it.”
Hendricks picked up the BoDo retail/office complex on Oct. 25, 2017, for $25 million, with intentions to redo the façade to better match the century-old 8th Street Marketplace across the street.
“The BoDo buildings are well built, but they don’t have the feel of the buildings across the street,” said Gerbitz, referencing 8th Street Marketplace. “Our job is to get (BoDo) so they feel like that.”
Hendricks has done extensive design work for a new BoDo look, but Gerbitz expects the approval process to extend well into 2019 before façade work begins.
“We don’t rush,” he said. “We’re not looking to flip BoDo or sell it.”
Gerbitz said Hendricks Commercial is attracted to Boise because of the relationships he has built with civic leaders.
The new owners of BoDo want to give the downtown Boise commercial/office/movie complex more personality.
Rob Gerbitz, sitting at Caffé D’Arte, looked across the street at 8th Street Marketplace – the 1903 Northrup Building and the 1904 Mercantile Building between Broad and Myrtle streets.
“Details,” said Gerbitz, president and CEO of Hendricks Commercial Properties. Hencricks is the Beloit, Wisc., firm that closed Oct. 25 on the $25 million purchase of the 118,977-square-foot, three-building BoDo.
Gerbitz said Hendricks expects to spend at least $3 million to dress up the BoDo exterior with historic detail between Broad and Front streets. BoDo opened in 2005.
“We already have an idea what we want to create,” he said. “We want the characteristics of what’s around them.”
8th Street Marketplace?
“Absolutely,” Gerbitz said.
8th Street Marketplace owner Ephraim Greenwall welcomed the news.
“It’s always wonderful to have new blood and new money come into the submarket,” Greenwall said. “To have them attempt to make the look consistent can only be good for the entire area.”
Gerbitz and other Hendricks staff started meeting with BoDo tenants Nov. 8. He plans to move ahead with the façade work right away.
“They need a facelift,” Gerbitz said. “Best way to say it, they need a personality. Why are downtowns booming again? They have personality.”
Gerbitz has been CEO at Hendricks Commercial for 10 years. Though based in Wisconsin, Gerbitz said the company has become “ingrained” in Indianapolis, where the company is redeveloping an 11-acre former downtown Coca-Cola bottling plant and has already redeveloped a former iron foundry as the 200,000-square foot mixed-used Ironworks at Keystone.
Gerbitz works for Diana Hendricks, second richest self-made woman in the U.S., as declared by Forbes magazine earlier this year. Since August, the New York Times and Forbes have both written long profiles on Hendricks, who owns Hendricks Commercial Properties and also the ABC Supply roofing supply chain.
“One thing Diana said to me, ‘I want a product I can be proud of.’” Gerbitz said. “We’re not going to skimp on things.”
Gerbitz said that a year ago, he looked at Boise, Chattanooga and Kansas City as places to research for growth.
“What we like is the demographics,” Gerbitz said. “Boise is one of the best-growing cities. It gives us an opportunity to show what we can do.”
Gerbitz has seen the countless “best of” lists.
“Boise is always on that list,” he noted.
BoDo came up for sale in March, and Hendricks Commercial entered into negotiations in May.
BoDo was built for $65 million. Colliers International listed it for $30 million. Gerbitz said he paid just over $25 million.
“We were getting a very solid deal,” he said.
Gerbitz visited Boise four times during the negotiations and walked and biked much of downtown. He also climbed Table Rock.
“In commercial real estate, you need to be on the ground,” he said. “You need to see it, see the people walking by. Quite frankly, after the first time I was here, I get it. The thing I found with people I talked to is they are genuinely positive (about the community). I went to the state of the city address. It was a lot of fun. People I never met in my life, they talked to me like they knew me all my life.”
He won over Diana Hendricks, too.
“She said to me, ‘I’ve never been to Boise, Idaho.’ She said, ‘I’m getting this.’”
BoDo owners envision more downtown projects
BoDo will not be a one-off for Hendricks Commercial Properties.
But Gerbitz first did have to win over some staff with committing to far-off Boise.
“One of my guys said ‘Do we want to fly three hours every time we need to do something?’” Gerbitz recalled.
He recommended that this skeptic run around downtown and the neighborhoods and walk the alleys.
“We like downtowns,” he said. “We love old buildings. We don’t mind building things either.”
Gerbitz can see Hendricks Commercial laying claim to property in the 8th Street area or near the Capitol or even building something on the surface parking lots downtown.
“Most of those surface parking lots used to have buildings on them,” he noted.
Looking for a tenant for the Urban Outfitters vacancy
Hendricks Commercial Properties inherited a 10,360-square-foot vacancy created by the July departure of Urban Outfitters, which had been a BoDo tenant for 10 years before moving to The Village at Meridan.
The space is represented by Colliers International, which itself is a BoDo tenant.
“We tried to zero in on what we would like to see and what we don’t want to see,” Hendricks Commercial CEO Rob Gerbitz said. “We don’t rent space just to rent space. We want the right tenant. We’re not interested in a convenience store.
“We want something that would be special to that space,” he continued. “We want something that would bring extra life. We’re looking for dynamic, let’s just say restaurant, local, a regional operator, not a chain. I’d love to find a retailer, something like women’s apparel. That would probably require splitting the space. Those are the two biggest drivers.”
The quickly approaching holiday season isn’t a deterrent.
“We want to be in serious discussions by the end of the year,” he said.
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