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Fifth Third Center Finds $90M Buyer, While Palmer Plaza Starts Looking For One

4 Jun 2014, 1:09 pm

By Eliza Theiss, Associate Editor

Palmer Plaza

Palmer Plaza, the 284,000-square-foot office high-rise at the corner of 18th and West End Avenue, is set to go on the market due to the impending maturing of an outstanding loan on the property, reports The Tennessean. The 18-story West End office tower’s owner, entity Palmer Plaza Partners II, has close to $30 million in outstanding debt on the property, which matures in September 2015 and can be paid off by March 2016 without penalty. The ownership might also choose to refinance the loan, instead of selling the property. Real estate investment banking firm Eastdil Secured’s Atlanta office is expected to market the property.

Developed by the Alex S. Palmer-run Alex S. Palmer & Company, the namesake property offers 284,000 square feet of gross space with 15,970 square feet of space per floor. Amenities include an adjacent 700-space, nine-story parking garage, rooftop fitness center with sauna and sun deck and a three-story entrance lobby. The Class A office asset has efficiency features such as reflective glass curtain wall and computerized energy management system. It was designed by architecture firm Gould Turner Group PC.

According to The Tennessean, Palmer Plaza is 94 percent leased, anchor tenants including Marsh, Lend Lease and Bethel University.

Fifth Third Center

In other office news, the 490,276-square-foot Fifth Third Center in Nashville’s downtown is set to sell in June for around $90 million, reports the Nashville Business Journal. The property’s owner, Amstar Group, has selected a yet-to-be-disclosed buyer who will pay in the low- to mid-$180s per square foot for the asset, which Amstar purchased for $62 million in 2007.

Downtown’s fourth largest building, Fifth Third Center’s amenities include an underground parking facility, high-end men’s barber shop, executive shoe shine and a Starbucks. Close to 80 percent occupied, the 31-story tower’s tenant roster includes Fifth Third Bank’s Nashville headquarters, Loews Hotels Shared Services Headquarters, Deloitte and Sony/ATV Music Publishing. According to the Nashville Business Journal, the property is being marketed by Mike McDonald, managing director of Eastdil Secured’s Atlanta office

Images via Alex S. Palmer & Company and Fifth Third Center Nashville

Steadfast Buys Nashville Apartments for $35.2M

28 May 2014, 2:00 pm

By Eliza Theiss, Associate Editor

Richland Falls

California-based Steadfast Income REIT continues its Tennessee apartment buying spree with the fourth purchase in the state and the third in metro Nashville in eight months. Steadfast’s latest acquisition is the 176-unit Village at Spring Hill, which it purchased for $14.2 million from Villages at Spring Hill LP, according to the Nashville Business Journal. Brentwood-based The Kirkland Co. brokered the $80,680 per unit sale. Located in Nashville’s Spring Hill submarket, the community comprises one-, two- and three-bedroom apartments. According to apartmentguide.com the community’s amenities include a 24-hour fitness center with sauna, swimming pool, lighted tennis court, pet park, playground and picnic area with grills.

The California investor also purchased the 190-unit Richland Falls community in Murfreesboro, TN, paying $21 million for the community only two weeks ago. The newly constructed community comprises nine multi-story buildings totaling 190 one-, two- and three-story apartments averaging 1,026 square feet and average in-place rents of $892. Richland Falls comprises 18 acres, part of which has the ability of holding an additional 86-unit phase. Amenities include a fitness center, outdoor swimming pool, dog park, billiards lounge and business center.

“Steadfast Income REIT’s acquisition focus has been to focus on properties in flourishing markets,” said Ella Shaw Neyland, president of Steadfast Income REIT. “Murfreesboro and the Nashville area are high on national rankings for economic strength, attractiveness to business, population growth and job growth.”

Cantare at Indian lake

With the acquisition of Richland Falls and Village at Spring Hill, Steadfast now owns 67 communities in 11 Southern and Midwestern states. Barring the latest acquisitions, the company’s Nashville portfolio includes the 206-unit Cantare at Indian Lake, 90-unit Keystone Farms and 256-unit Audubon Park. According to The Tennessean, Steadfast picked up Cantare for $29 million, while Keystone was bought for $8.4 million.

Images via Facebook

Athena Companies Buys 100-Key Asset in Booming Nashville Hotel Market

22 May 2014, 1:49 pm

By Eliza Theiss, Associate Editor

MainStay Suites Brentwood/Nashville

Hunter Hotel Advisors recently advised on the sale of three MainStay Suites for Choice Hotels International in three secondary US markets: Nashville, Pittsburgh and Greenville, SC. All three hotels were acquired by regional investors, attracted to the extended stay model of prime location hotels. The total purchase price was $12.2 million, although the assets were sold individually. Athena Companies paid $4.6 million for the Nashville property, Shiv Hospitality paid $4.5 million for the Pittsburgh asset, while the Greenville MainStay was picked up for $3.1 million by Paragon Hotel Companies.

“Their robust interests in these assets reinforce the importance that investors place on strong locations even if they are in secondary markets,” said David Perrin, a senior associate at Hunter Hotel Advisors’ DC office and the broker of the transaction. According to Hunter Hotel Advisors, regional investors are fueling robust activity in secondary markets.

David Perrin

“Demand for well-located hotels in secondary markets is extremely high.” David Perrin told CPE. “Investors can produce high returns in markets other than New York and San Francisco, as long as the hotels are well positioned within the particular sub-market and they keep the property updated to compete with new supply.”

The new owners of the three recently sold properties are following this trend, planning full renovations to all rooms and public areas in order to upgrade the hotels to current Mainstay standards, which include a fully equipped kitchen, flat panel TVs and free high-speed internet.

The Nashville property currently features amenities such as a pool, fitness room and continental breakfast. The hotel, operating as MainStay Suites Brentwood/Nashville, comprises 100 keys.

According to David Perrin, Nashville is a prime example of a city whose suburbs are benefiting from an influx of investments to the city. “Nashville continues to be one of the hottest hospitality markets in the country,” Perrin told CPE. “Some are beginning to worry about the impact the large amount of new supply will have, but with the new convention center, a heavy focus on the Healthcare industry, and a strong University system, Nashville should not have a problem absorbing the new rooms coming into the market,” he added.

Images courtesy of Hunter Hotel Advisors and Ben Rose Photography

Starwood Plans to Fill Void of Full-Service Hotels in Downtown Nashville

14 May 2014, 4:10 pm

By Eliza Theiss, Associate Editor

Music City Center

While Nashville’s swanky $600 million Music City Center has brought great profits for the local hotel market, especially in the downtown area, things aren’t working exactly as they should. More to the point, business isn’t as good as it could be for the year-old convention center. According to the Nashville Business Journal, in its first eight months of operation, the 1.2 million-square-foot convention center was passed over by no less than 16 massive conventions due to a shortage in downtown’s high-end hotel inventory. In fact, downtown Nashville would need up to 1,000 more full-service hotel keys in the downtown sector to adequately accommodate the sheer number of visitors brought in by the massive conventions Music City Center can hold.

That void could be partially filled by a 430-key The Westin Nashville, recently announced by Starwood Hotels & Resorts Worldwide, Inc. “Demand for this city is at a historic high. The addition of the Westin to our hotel package will help ensure our continued success,” said Butch Spyridon, president and CEO of the Nashville Convention & Visitors Corp., adding that “… a brand that is new to Nashville makes this a perfect fit. And the timing couldn’t be better.”

The Westin Nashville will rise across from Music City Center, to the right from the roundabout

Certainly the new hotel could not be located more conveniently to Music City Center, as it will be built at 100 Clark Place, right across from the new convention center on the Cokesbury site previously acquired for $8.2 million. Set to break ground this summer and open in early 2017, the hotel will be owned by Nashville Hospitality Capital, LLC and managed by Wischermann Partners, Inc.

The 430-key hotel will feature 25,800 square feet of state-of-the-art meeting and events facilities, a business center, the brand’s signature WestinWORKOUT fitness studio, a rooftop pool and lounge, an indoor pool, a full-service spa and a signature restaurant.

The hotel will also be within walking distance of the lower Broad, The Gulch, Ryman Auditorium, Bridgestone Arena and downtown’s myriad of shopping, dining and entertainment venues. Music Row, the Country Music Hall of Fame and The pantheon will also be easily accessible. Separated by less than eight miles from Nashville International Airport, The Westin Nashville will also offer access to the offices of KPMG, AT&T and Deloitte.

According to the Nashville Post, the Metro Development and Housing Agency design review committee has to approve the exterior design of the hotel before the project can move forward. The developer is expected to submit renderings soon.

Image via tvsdesign and Google Maps

$95M Sale of Elliston 23 Breaks All Records in Nashville Apartment Market

7 May 2014, 8:05 pm

By Eliza Theiss, Associate Editor

Franklin, TN-based Southern Land Company has announced the sale of Elliston 23 Apartments to Dayton, OH-based The Connor Group for $95.1 million. The sale broke several records—it’s the highest price paid for one apartment community by The Connor Group, the highest price paid for one apartment community in the Nashville market, and the highest price per-unit sale in the state of Tennessee. At over $287,000 per unit, it surpassed previous record holder Vista Germantown by over $65,000 per unit.

The Silver LEED-certified mixed-use development in the Elliston Place block of Nashville was owned by 2300 Elliston Place LLC, a joint venture comprised of Southern Land Company and institutional investors advised by J.P. Morgan Asset Management. The property was originally listed on the market in mid-February and garnered significant interest prior to the final offer. Southern Land served as developer, architect, general contractor and property manager for Elliston 23, which had a price tag of $60 million.

Completed in late 2013, Elliston 23 features 331 luxury residential units and 15,000-square feet of commercial space. The community offers 20 different one- and two-bedroom floor plans ranging between 554 and 1,363 square feet. At an average rental rate of $2.20 per square-foot, rents range between $1,300 and $3,000. At the time of closing, E23 boasted a 75 percent occupancy and 82 percent leasing rate for an averaged lease-up speed of over 30 units per month.

Amenities at the luxury community include a 2,000-square-foot heated saltwater pool (Nashville’s largest), 1,000-square-foot fitness center, six-floor parking garage, dog park, game room, two landscaped courtyards, grilling stations, controlled access and a resident lounge which hosts the live tweeting parties of the cast of hit TV series Nashville, Southern Land told MHN.  Other neat facts MHN found out? Elliston 23 is the only Nashville property with exposed concrete ceiling and walls and the benches in front of the property are made out of repurposed stone. Due to Southern Land CEO Tim Downey’s wishes to preserve some of the history of the Father Ryan High School, which occupied E23’s site between 1928 and 1991, the stone was sourced from the previous structure. E23 boasts a walk score of 92.

The 15,000-square-foot street-level retail component is also fully leased to local and national retailers such as Dunkin Donuts, Massage Envy, Jamba Juice, Fresh To Order, Nama Sushi Bar, Juel Salon and Dailey Method (barre), some of which established their first Tennessee locations at E23.

Sitting on three acres of some of the most desirable land in Nashville, the six-story luxury apartment is located at the center of the “eds and meds” job base afforded by three major hospitals (Vanderbilt Medical Center, Centennial Hospital and Baptist Hospital) and Vanderbilt University campus. Also within walking distance are the 132-acre Centennial Park, the Centennial Sportsplex and the dynamic West End Avenue commercial corridor with its myriad dining, shopping and entertainment venues.

The purchase of Elliston 23 is The Connor Group’s second foray in the Nashville market, after the $60.5 million purchase of Ashton Brook in 2013.

The “Day in the life” promo video of E23, created by Southern Land Marketing Manager of Multifamily Operations Morgan Porter and Glenn Sweitzer of Fresh-Design, received a 2014 Telly award.

Click here to read the MHN interview with Southern Lands’ VP of mixed-use development Michael McNally

Images courtesy of Southern Land Company

$598M Music City Center Earns LEED Gold

30 Apr 2014, 4:00 pm

By Eliza Theiss, Associate Editor

Music City Center, Nashville’s brand-new $598 million convention center, has been awarded LEED Gold Certification for New Construction by the U.S. Green Building Council.

The 1.2 million-square-foot facility boasts a 20 percent lower energy consumption than conventionally designed facilities of similar size thanks to a variety of green features, among them an 845-panel, 211-kilowatt solar array, high-efficiency HVAC system and energy-conserving LED lighting equipped with occupancy and photo sensors and dimmable ballasts. One of the most striking green features of Music City Center is the four-acre green roof that helps reduce the heat island effect as well as the center’s energy consumption by insulating the facility. It also provides a natural habitat for plants, insects and wildlife in the urban core of Nashville. At 175,000 square feet, the green roof is the Southeast’s largest. A water management system comprised of, among other features, low-flow fixtures, rainwater irrigation and a 360,000-gallon rainwater harvest and recycling system reduces the center’s water consumption by 40 percent. Other green features include using low-emitting VOC materials, 90 percent recycled glass, locally sourced building supplies and diverting at least half of the waste towards recycling. The project is also a brownfield redevelopment.

The sustainable development is the result of a collaboration between Nashville Mayor Karl Dean, architecture firms tvsdesign, Tuck-Hinton Architects and Moody Nolan, Inc. and the construction team composed of Clark Construction, Bell & Associates Construction and Harmony Construction Group. In addition, 130 local, small and/or disadvantaged businesses were involved in building Music City Center. A total of 7,800 workers were employed on the site.

Since opening in May 2013, Music City Center has hosted over 250 events with an economic impact of $125 million and has spurred over $1 billion in new developments in the SoBro neighborhood.

Image courtesy of tvsdesign

Virgin Hotels Plans 240-Key Location on Music Row

23 Apr 2014, 7:54 pm

By Eliza Theiss, Associate Editor

The now demolished Victorian mansion

Virgin Group’s lifestyle hotel brand Virgin Hotels has announced plans to open and operate a new hotel in Nashville, Tennessee. Set to rise on Nashville’s famed Music Row, the hotel is expected to open in 2016 and will be managed by Virgin Hotels. The new hotel will be developed by local businessman David Chase, executive vice president of D.F. Chase Inc., a national construction services firm.

Although many of the details of the 240-key project have yet to be disclosed, the future hotel’s location is being regarded as its most defining characteristic: One Music Row, the start of Nashville’s iconic entertainment industry hub. The setting is also the inspiration of one of the distinctive features of the hotel: a cutting-edge recording studio. Other amenities include food and beverage outlets, several concept suites, and according to the Nashville Business Journal, a fitness center, spa, meeting rooms, a rooftop venue and a parking facility.

According to the Nashville Business Journal, NV Music Row LLC, an entity headed by David Chase, has started assembling the necessary land for the project, making three Music Row purchases for a total worth of $6.35 million. Among the acquisitions was 1 Music Square West, which fetched $3.18 million. The site was until very recently the home of one the oldest structures on Music Row, a 6,605-square-foot Victorian brick mansion, reported the Nashville Post. The six-bedroom single family home built in 1870 was razed a few days ago. The home avoided demolition in 2007, after plans for a $52 million office and residential condo project fell through.

Virgin Hotels Nashville is the brand’s third announced location, after New York and Chicago. The city’s strong cultural and musical heritage, paired with its recent economic growth, contributed to its selection as a Virgin Hotels city.

Image via Google Maps

Highwoods Inks 91KSF Lease in Brentwood

16 Apr 2014, 8:09 pm

By Eliza Theiss, Associate Editor

Raleigh, NC-based Highwoods Properties has signed a 91,000-square-foot long-term lease at Highwoods Plaza II in Nashville with a current customer. The lease represents a 32,000-square-foot net expansion for the undisclosed customer, while also accessing an additional ten years of lease term.

The space was part of LifePoint Hopsitals’ recently vacated offices at Highwoods Plaza II. This latest lease, paired with another recently secured contract for 13,000 square feet, leaves 29 percent of LifePoint’s previous square footage vacant. According to a news release, Highwoods is in negotiations for the remaining 43,000 square feet of space.

In February 2014 LifePoint relocated its operations from Highwoods Plaza II to a seven-story Class A built-to-suit office tower at The Shops at Seven Springs. LifePoint’s new 203,000-square-foot home was developed and is owned by Highwoods.

Located in the Maryland Farms Office Park in Nashville’s Brentwood submarket, Highwoods Plaza II comprises 102,121 square feet of space across four floors. Built in 1997, the property is ENERGY Star certified and boasts several more eco-conscious features, such as high-efficiency lighting and HVAC drives, green cleaning and a recycling program.

“Nashville continues to be one of our best performing markets,” President and CEO of Highwoods Properties Ed Fritsch commented, adding, “The Brentwood submarket, where Highwoods Plaza II is located, is very strong, with vacancy of 6% at March 31.”

Although Colliers International’s data is slightly more conservative, it still reports a healthy 6.7 percent vacancy rate for the submarket, the fifth lowest within metro Nashville. Brentwood’s average asking rent rate of $23.25 per square foot is the fourth highest within the market.

Image courtesy of Highwoods Properties

Chart via Colliers International

Vista Germantown Sold for Record $53M

14 Apr 2014, 1:42 pm

By Eliza Theiss, Associate Editor

Nashville’s apartment market is reaching for the stars, with two record-breaking sales inked just a few days apart. Following the recent $83 million sale of Wyndchase Aspen Grove, which broke the per-community price record (details here), the $53.25 million sale of Vista Germantown set a new record in the per-unit price category, reported the Nashville Post, as it was sold for a cool $220,041 per apartment. That’s $10,000 per unit more than previous record holder West End Nashville.

Vista Germantown Apartments LP, an affiliate of Canadian institutional investor Avison Young Inc., acquired the 242-unit community from Ohio-based Associated Estates Realty Corp. affiliate AERC Bristol Germantown JV. The latter co-developed Vista Germantown with Franklin-based Bristol Development Group, an entity that sold its ownership in 2010 for over $6.7 million. California-headquartered Hancock Real Estate Strategies and Nashville-based The Kirkland Co. marketed the property on behalf of AERC.

As previously reported, Vista Germantown was expected to be a record-breaking deal if it sold before 331-unit Elliston 23, another high-profile Nashville apartment project on the market. Elliston 23 is expected to be bought at a per-unit price in the high $200,000s.

Opened in 2012 and developed at a $32 million cost, the Vista Germantown luxury apartment complex is located in Nashville’s historic Germantown district. It features 242 one- or two-bedroom units, each with uniquely designed floor plans and amenities such as stainless steel appliances, oversized closets and granite kitchen counters. Community amenities include a five-story parking deck, resort-style saltwater pool, 24-hour fitness center, bike storage areas, electric car charging stations, grilling are and firepit.

Image via the Vista Germantown Facebook page

Wyndchase Aspen Grove Breaks Record with $83M Sale

8 Apr 2014, 1:08 pm

By Eliza Theiss, Associate Editor

An affiliate of Boston-based Berkshire Property Advisors has acquired Wyndchase Aspen Grove, paying $83 million, the highest price ever for one apartment community in the Metro Nashville, reports The Tennessean. Berkshire bought the 560-unit Franklin, TN apartment community from Dallas-based Crow Holdings and has taken over the management from Bell Partners. According to PropertyShark.com, the seller, operating as Ch Realty V/Wyndchase Lp paid $71.5 million for the community in September 2011. The real estate website’s market value assessment of the property for 2013 was a little over $60.5 million.

Located at 3100 Aspen Grove Drive in Nashville’s Franklin submarket, the 1997-built community sprawls on 60 acres of land overlooking a 36-hole championship golf course. Wyndchase Aspen Grove comprises one-, two- and three-bedroom units ranging between 708 square feet and 1,423 square feet.  Apartment features include an all-electric kitchen, breakfast bar, dishwasher, refrigerator, large walk-in closets, garden style tubs, patios or balconies, extra storage, nine-foot ceilings and oversized windows for copious amounts of sunlight.  Selected units even boats built-in bookshelves, attached garage and wood burning fireplaces.

The gated community boasts amenities such as a 36-hole championship golf course, two swimming pools, fitness studio with personal trainer, outdoor fireplace, pet park, children’s play area, cyber café, resident video library, business center, car care center, laundry facility, on-site recycling, on-site maintenance and easy access to shopping and Franklin’s historic areas.

Berkshire Property Advisors focuses on value-add opportunistic investments in the multifamily industry. The company owns or manages over 100 apartment communities with over 32,000 units located in 30 markets across the US.  Wyndchase Aspen Grove is Berkshire’s only apartment community in Tennessee.

Image via wyndchaseaspengroveapts.com