The overall Nashville office vacancy rate ticked up to 9.4 percent in the third quarter, but that was due primarily to Regions leaving what is now the UBS Tower and the state vacating a bunch of space in the L&C Tower. If you are looking for top-shelf Class A space, you don’t have all that many choices these days, say the researchers at the local office of Cassidy Turley. Just 4.7 percent of Class A space now sits vacant, which is down from 5.9 percent at year-end 2012. Overall lease rates rose 8 cents during the quarter to $19.73 and are now up 3.3 percent from the same time last year. Check out the full report here.
On the industrial side, the story is one of steady growth that has pushed the region's vacancy rate more than a point below its historical average. Lease rates are holding steady and the important East and Southeast submarkets have each absorbed more than 1 million square feet of space year to date. All the numbers are available here.
Nissan has contracted with T.W. Frierson to expand the former Singer Sewing and B&W Wholesale distribution center in Murfreesboro. The auto maker is adding 400,000 square feet of warehouse space to the back of a smaller building that now can house some call center, engineering and IT workers. Chambers Williams has the details.
It will be shared by the Nissan Export Center and a parts-return operation, said Nissan spokesman Justin Saia. The facility is located about three miles from the main Smryna plant. The number of workers based in the warehouse has not yet been determined, he said.
The Nashville-based CBRE trio of Douglass Johnson, Morgan Hillenmeyer and Steve Preston (below in that order) have been hired by the receiver for what remains of WexTrust, the real estate investment firm whose two former principals are serving a total of 35 years in prison for fraud. The brokers will help attorney Timothy Coleman dispose of a portfolio appraised at $66 million and comprising 13 single-tenant office buildings, four warehouses, two office flex buildings and a grocery-anchored shopping center.
The portfolio — check out the full list here — includes the 528,500-square-foot building at 530 Myatt Drive south of RiverGate and a number of properties around Tennessee being leased by the state.
SEE ALSO: WexTrust CEO pleads guilty in fraud case from 2010
The Nashville commercial real estate market is healthy and poised to see new construction, according to first quarter statistics and analysis the local office of Colliers International has released. Bert Mathews, president of The Mathews Company and a partner at Colliers International, said larger tenants are having a difficult time finding space to accommodate growth and expansion.
“Our office market is extremely healthy,” Mathews said. “A lot of tenants in the 25,000- to 50,000-square-foot range looking for places to go.”
The Colliers numbers show the city's direct vacancy rate of 7.9 percent is the lowest it’s been since third quarter 2007. Mathews said those companies wanting to develop an office building and competing for prospective tenants are engaged in "a race" to provide appealing amenities and rental rates.
“Because the market is getting so tight, we will see more new office construction,” he predicted.
If Hemlock Semiconductor doesn't crank up operations at its massive Clarksville plant by year's end, it will have to cover the principal payments on the $20 million loan Montgomery County officials took out to buy the land under the facility. Mark Hicks at the Leaf-Chronicle has the details.
The terms are part of a performance-based agreement between HSC and the EDC, in which Hemlock committed to a $1 billion investment, which Chavez noted to company exceeded by $1 billion, and 500 jobs, “but they’re short on jobs by about 400,” he said.
The Tennessee Environmental Council and nonprofit group Rediscover East! have filed suit against PSC Metals in District Court for alleged environmental violations at the company's prominent East Bank facility. The complaint asks for an injunction and wants the court to apply the maximum penalty possible under law — $37,500 per day every day since Sept. 10, 2010. That would amount to about $35 million and counting.
The notice claims that water samplings from a drain used by PSC had elevated levels of suspended solids, copper, lead, iron and zinc when tested in September 2010. Other samplings in 2011 and 2012 allegedly found industrial waste, oil and grease in the water.
First-quarter real estate market reports are starting to hit inboxes today, and so far there have been few shocks.
On the industrial side, Cassidy Turley's research team says things are being driven by Wilson County's emergence as the new logistical center for the Midstate. The three largest lease moves in the quarter — two CEVA moves in Beckwith Farms and Starbucks for Park 840 — totaled nearly 1.8 million square feet and all were in the Wilson County-dominated East submarket.
Overall, industrial asking rates are starting to creep up — hitting an average of $3.55 per square foot, up 45 cents from the low in 2010. Check out the full report here.
On the office side, most movement appears to be on the horizon. Brokers are aware of big moves by Tractor Supply, LifePoint, HCA and AmSurg, which will open up some square footage ... eventually. The large tracts for new development are controlled by a small number of developers, described as "historically conservative."
Site clearing and infrastructure work has begun on several sites after developers paused to see the economic woes shake out. With the recent demand for quality by many users, Class A vacancy is at an all-time low of 5.2% and the pressure has shifted to add speculative space. The current end user wants LEED certification, high end finishes, and more efficient floorplates to accommodate modern day space utilization.
There was very little movement in office in 1Q and there's little available space in 2Q. As a result, asking rates in Green Hills are topping $30 per square foot. For more on that stat and others, check out the full office report.
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