SNAPSHOT, APRIL 2004

Nashville Office Market

In Nashville, Tennessee’s office market, stronger demand is anticipated for the second half of the year. “There appear to be several developers gearing up to start new construction as the market begins to turn,” says David Koziak, director of office leasing with Grubb & Ellis|Centennial in Nashville.

Significant developments include Roundabout Plaza by Eakin Partners, which is already underway. This Class A, 200,000-square-foot project is 61 percent pre-leased, with completion slated for this October. Roundabout Plaza is located in the Green Hills/Music Row submarket.

Alex S. Palmer & Company is seeking a major tenant in order to kick off The Summit, a new development on West End Avenue. The project will include a 15-story, 325,000-square-foot tower, and a 25-story, 425,000-square-foot tower, as well as a dedicated parking structure capable of holding 3,000 cars. There will be internal access between each building.

Tony Giarrantana is planning a 31-story condominium high-rise building downtown that will include a parking deck. “That will help the downtown area retain some tenants that seek covered parking in close proximity to office buildings,” says Koziak.

Giarrantana and Cumberland Advisors are developing Belle Meade Town Center, a mixed-use project with 125,000 square feet of office space. The project is a redevelopment of the shopping center anchored by the former Belle Meade Theater.

The range for Class A rental rates in Nashville is $19.37 per square foot. Vacancy rates range from 18.86 percent in the Airport submarket to 8 percent in the Rivergate/North submarket.

The West End Avenue/Midtown and Brentwood/Cool Springs submarkets remain the strongest. West End Avenue benefits from Vanderbilt University, which continues to absorb space and remains attractive to high profile tenants. Brentwood/Cool Springs continues to absorb healthcare industry tenants, the predominant office user for that submarket. Duke Realty is considering construction of Creekside Crossing II building, which would complement Buildings I and II in the heart of Brentwood’s Maryland Farms. The Cool Springs vacancy number rose slightly during 2003 due to a previous corporate headquarters building becoming multi-tenant. The former Service Merchandise building brought 350,000 square feet to the Cool Springs submarket, and currently the building is approximately 87 percent vacant. This building appears unlikely to attract tenants seeking a true Class A facility in comparison to the Corporate Centre buildings.

©2004 France Publications, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For information on reprints of this article contact Barbara Sherer at (630) 554-6054.