Luken Holdings has purchased the Tivoli Center, the historic office building that stands next to the Tivoli Theatre on Broad Street, from Jimmy Hudson and Frank McDonald.
The terms of the deal, which has been in the works since it was first reported in July 2008, were not disclosed.
The former Fowler Brothers building is a four-story Victorian-style brick and stone structure that has stood since 1889, according to Lynda Childress, president and CEO of Luken Holdings.
"It was renovated in 1986 and again in 2002, and it is beautiful," she said. "Luken is in the process of cleaning it up and putting our touch on it."
Henry Luken, owner of Luken Holdings, wanted the building, which has been vacant since former tenant BlueCross BlueShield of Tennessee moved out, Ms. Childress said.
Press reports in March indicated that nearly a million square feet of office space, or 15.1 percent of all downtown offices, was vacant in the city.
"We initially thought we'd move in there, but we think we can lease the whole space out," she added.
Mr. Luken, who has been in "acquisition mode," is happy with the deal, Ms. Childress said.
"I'm very pleased about the addition of the Tivoli Center to my real estate holdings," Mr. Luken said. "I'm looking forward to purchasing more property in the Chattanooga area in the future."
The 57,000-square-foot building is ready to occupy, with room for about 50 people per floor, said Russ Elliott, leasing and sales agent for Luken.
"Obviously, the market has been slow, but I personally believe that's going to change," he said. "A lot of companies are taking a look at Chattanooga; it's become a real place to go."
The Tivoli Center features art deco details within, and a unique cut stone facade. The building's basement was designed to be the first floor, but when Chattanooga's streets were raised to prevent flooding near the turn of the century, the original entrance was covered by the new sidewalk, Mr. Elliott said.
Though the building is old, it's wired for fiber-optic, and space starts at $5 per square foot, according to the company.
Other vacant downtown buildings as of March included the Chattanooga Bank building, the Maclellan building, the Hub building, the BlueCross Gold building, the Eighth Street building and the Chestnut Street building.
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