Nashville City Center, a prominent downtown office building, has been sold to a Miami real estate firm, in one of the biggest commercial real estate deals ever recorded in the city.
Parmenter Realty Partners closed this week on the skyscraper at 511 Union St., which stands out on the Nashville skyline with its gleaming white, modern architecture and its big First Tennessee Bank sign.
The sale by the property's longtime owners came in at $84.76 million, including assumed debt, according to a deed filed Thursday in Davidson County.
The deal comes despite a credit crunch that has slowed commercial transactions across much of the country. It could also pave the way for the completion of Nashville City Center's long-delayed second phase, a building on half an acre of land on the tower's south side.
"A lot of the problems you read about, the issues are debt driven rather than fundamentals driven," said Andrew Weiss, Parmenter's chief operating officer. "Supply and demand, which is the fundamental issue for real estate, it's what we would call in balance."
Meanwhile, the transaction puts an end to the 20-year ownership of Nashville City Center by the group that developed the building, the Nashville City Center Partnership.
That association between local developer David R. Emery, Texas-based John P. Grayken and the Robert M. Bass Group Inc., the investment arm of the wealthy Fort Worth, Texas-based Bass family, pushed through Nashville City Center despite setbacks in the real estate market that delayed the project through much of the 1980s.
Emery, who is now the chief executive of Nashville-based Healthcare Realty Trust Inc., referred calls to Richard Fletcher, president of the building's manager, 511 Group. Fletcher did not return a call seeking comment.
Deal is one of highestThe price paid for the
27-story Nashville City Center is one of the highest in recent years for a downtown high-rise, eclipsing the $62 million paid for the Fifth Third Tower in late 2006 and the $78.3 million paid for One Nashville Place in 2005.
The deal values Nashville City Center's 480,224 square feet at $176.50 a foot, more than the $130 a foot for the Fifth Third building, but less than the $195 a foot paid for One Nashville Place.
The sale is also the first big downtown deal since the AT&T Building was sold to the MetLife insurance company in a portfolio sale more than a year ago. The Nashville City Center deal came together because Parmenter had been looking for a building to buy in Middle Tennessee and was attracted to Nashville City Center's high occupancy rate of more than 90 percent, Weiss said.
The company was also drawn in by the opportunity to develop two surface parking lots next to the building on Sixth Avenue North.
The original plan for Nashville City Center, which opened in 1988, was to build two towers. But the second,
39-story building never got started.
Parmenter plans to build a five-story, 570-space parking garage on the property that could be topped with an office or mixed-use building. Plans for that building are still being developed, and no timetable has been set to start construction of the garage, Weiss said.
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