Friday, August 1, 2008
Politics Why Is the Chamber Playing Possum with May Town?
Posted by Matt Pulle on Fri, Aug 1, 2008 at 5:31 AM
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Office Vacancy in the CBD is 10.7% - the same as the Nashville Market average and lower (gasp) than Cool Springs (11.3%).
Pulle - fact checking, you should try it.
Last I saw, the vacancy rate was around 20% for the central core. Half of the ATT building is now vacant. That's probably 5% alone.
Hey Anon, the 10.7% vacancy doesn't include Nissan leaving or the pending opening of the Pinnacle Tower. A conservative estimate is that at least 1 million square feet of office space will be vacant in the CBD in the next year. Want a source? Check out Chas Sisk's article in the May 19th issue of The Tennessean.
Anon ... or come out to a planning commission meeting some time and listen to the stats fly. 20+% when pinnacle comes online.
Actually, I think the advocates of MTC have a legitimate point when they contend that Nashville needs an alternative to downtown, because a lot of businesses prefer a campus; I doubt that high gas prices are going to change that very much. The bigger problem with MTC is that the promoters are making extravagant promises with only a hypothetical likelihood of delivery. An even bigger problem is that they haven't thought the thing through. They promote it as "New Urbanism," when it would seem to me that a basic requirement of a new urbanist development of the intended scale would be a light-rail link to downtown. If forty thousand people are going to work there, it'll need infrastructure, and one bridge won't do it. I suspect the Chamber types have thought this thing through, and realize that the *concept*, not just the promoters, is all hat and no cattle.
More deeply [and to take up the City Paper's challenge to think through the developmental goals of the city], just what sort of economic role do we see Nashville as playing? The unquestioned premise of these discussions is that "economic development" consists of enticing outsiders to locate operations here. But such "footloose industries" have historically proven fickle; ask any small Tennessee town whose cut-and-sew operation has decamped to Central America over the weekend--or, for that matter, the geniuses who lured Magnetek to downtown. This ain't how Silicon Valley does it; there they create their own businesses, and the world goes there to be where the action is. I can think of two industries like that here--health care and [especially] music. Health care might use MTC [Those firms avoid DT like the plague], but music wouldn't; those people have the Row. Any others? Again, I think the key is making Nashville a magnet for creative people eager for opportunity; the approach of MTC just looks like a higher form of smokestack-chasing.
The Central Business District (CBD) and
MetroCenter both posted modest positive absorption, although completion of The
Terrazo, currently 33 percent pre-leased, and the relocation of Nissan North America
to its new headquarters will add approximately 330,000 square feet of vacant office
space to the CBD by the end of the year.
Excerpt from 2Q results:
http://www.centenn.com/o-08q2-Nashville.pdf
The source: Bi-annually, Grubb & Ellis|Centennial publishes a comprehensive report, the Nashville Office Market Survey. This report includes data and text covering basic market conditions such as inventory, vacancy, absorption, rents, and new and planned construction, as well as economic background analysis.
". . . completion of The
Terrazo, currently 33 percent pre-leased, and the relocation of Nissan North America
to its new headquarters will add approximately 330,000 square feet of vacant office
space to the CBD by the end of the year."
Er, the Terrazzo is a residential tower.
The Terrazzo's website notes 75,000 square feet of office space. It's pre-leasing and ultimate occupancy rate might give a feel for how office space outside of the core downtown area, especially combined with residential on-site, is accepted in the near future. Much smaller scale than MTC of course, but the Gulch could still be a bellweather. Doesn't even need a new bridge.
