Midtown Nashville Office Tower Trades for $77M

1801 West End Ave.

An 18-story office tower in Nashville’s Midtown traded for $76.5 million, according to public records filed on Friday. The buyer was an LLC associated with C-III Capital Partners, the records show, with the entity also taking control of the adjacent multi-floor parking structure.

The seller was an LLC associated with Apollo Global Real Estate and Vanderbilt Office Properties. However, the acquisition loan document is also signed by Vanderbilt’s CEO, Casey Wold, which would indicate that Vanderbilt retained some ownership stake in the 243,024-square-foot property.

Public records also show that a loan was associated with the sale. Blackstone provided a $64.6 million financing package, which matures in July 2024. 

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Since the beginning of the year, the average price per square foot in the metro was $263, according to CommercialEdge data, but the property traded at roughly $315 per square foot. The asset last changed hands in 2015, when a joint venture of Vanderbilt and Apollo acquired it for $50 million from developer Alex S. Palmer Co., the same data provider shows.

Formerly known as Palmer Plaza, the office tower was constructed in 1986 at 1801 West End Ave., adjacent to Music Row and a short distance from downtown Nashville. The building is situated within a short distance of interstates 40, 65 and 440, as well as a variety of entertainment destinations, restaurants, retailers and Vanderbilt University. The tower includes floorplates averaging 16,000 square feet, an open three-story lobby and a rooftop fitness center, as well as ground-floor retail and a café. The building received a full renovation in 2016. 

CommercialEdge data shows tenants include The Tennessean newspaper, JLL, the U.S. Department of Veteran Affairs. The building also has medical offices occupied by Alliance Oncology, the Nashville Center for Trauma & Psychotherapy and others. 

Betting on Music City

According to CommercialEdge, this purchase marked C-III Capital Partners’ first office acquisition in Nashville. The Texas-based company is a controlled affiliate of Island Capital Group LLC, an international merchant bank, and owns office properties in Charlotte, N.C.; Fort Lauderdale, Fla.; Las Vegas and Phoenix.

In the past few years, several large companies relocated or opened offices in Nashville, including Amazon, Mitsubishi, Western Express Inc., among others.

Developers and investors seem keen on the city’s future, as massive projects are completed or underway—in February, Skanska USA completed work on a $450 million project in the downtown area. Nearby, Southwest Value Partners is constructing a 5-million-square-foot, mixed-use project, which will include two Amazon-leased towers totaling more than 1 million square feet, and Pinnacle Financial Partners’ future headquarters.

According to a CommercialEdge report, the average per-square-foot price for urban core office assets increased by 4.5 percent nationwide in the 12 months ending in May, despite uncertainty regarding urban locations. Nashville’s office vacancy reached 19.4 percent at the end of May, rising by 830 basis points year-over-year, the same report shows.