Tag Archives: office vacancies

New High Density Office Space in Mallory Park Alleviates Growing Employer Occupancy Costs

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This press release was originally released on Oct. 10, 2016.

New High Density Office Space in Mallory Park Alleviates Growing Employer Occupancy Costs

Higher parking ratio featured in completed Phase I project

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NASHVILLE, Tenn. Oct. 10, 2016 – Southeast Venture has announced the completion of the first phase of a high-density office complex in Brentwood’s Mallory Park. The 87,100-square-foot project at 1573 Mallory Lane is now home to Quorum Healthcare Corporation.  The building type is similar to the Healthspring/Cigna Health campus that Southeast Venture developed in Metro Center in 2010.

The Healthspring/Cigna Health complex ­– a 175,000-square-foot build-to-suit project – filled a need that more and more Middle Tennessee employers are facing today.  Finding office space that can accommodate higher parking densities.

 The solution, said Southeast Venture Principal Michael Finucane, is simple. “Put more people in less office space; however, to do that, buildings need to have more parking spaces.  To maximize the efficiency of our project we simply built more parking spaces.”

 This increase in office density has become increasingly prevalent since the recession, as business owners look for ways to lower occupancy costs per employee. Beginning with the Healthspring/Cigna Health project in Metro Center and now in Mallory Park, Southeast Venture is providing options to resolve this issue, he added.

 “We had tremendous success with our building in Metro Center so we wanted to take that same product to the Brentwood/Cool Springs market. We saw a real need for higher density office space that, quite frankly, did not exist in this market,” Finucane said.

 “Suburban office space typically has a parking ratio that is four parking spaces per 1,000 square feet of office space,” he added. “The ratio for our Mallory Park project is six parking spaces per 1,000 square feet of office space. A tenant with 100 employees can rent 16,667 square feet in our project, versus 20,000 square feet in a building with four spaces per 1,000 square feet. Based on current office rents, that’s a $100,000 or more savings in occupancy costs per year. In addition, because these buildings have no shared common lobbies, exit corridors or elevators, each tenant only leases the space they occupy, which makes our buildings even more efficient.”

 Phase II of Southeast Venture’s Mallory Park project broke ground this spring and will include 68,000 square feet of one-story office space designed for multiple points of entry and parking around the perimeter of the building. The shell of Phase II will be delivered in the fourth quarter of 2016 and could be ready for tenants as early as the first quarter of 2017.

 About Southeast Venture:

Founded in 1981, Southeast Venture is a diversified commercial real estate and design services company guided by a mission of “Building Value by Valuing Relationships.” The firm provides and coordinates the delivery of brokerage, development, architectural and interior design and property management. This unique, comprehensive approach to commercial real estate offers a cost effective and efficient way of meeting its clients’ commercial real estate needs. For more information, visit SoutheastVenture.com, or find Southeast Venture on Twitter @SEVentureCRE.

One More 2010 Look Back and 2011 Outlook Blog Post

Last week, CoStar Group posted a lengthy article about CRE industry professionals looking back to 2010 and forward to 2011. You can read the whole article, titled “Anyone Sorry To See 2010 Go? Hell No!,” here.

In reading the piece, I was presently surprised that it wasn’t simply a rehashing of the red giant of a year 2010, but rather a semi-statistical, optimistic look at 2011.

According to CoStar, this time last year the CRE industry was mostly reading doom-and-gloom articles about the upcoming 12 months. This year, we seem more interested in “half-full” assessments.

The stories getting the most reads in January and February 2010 were markedly downbeat.

  • Betting on Bad Debt Becoming a Growing Investment Play
  • CRE in 2010: Weak Fundamentals and Constrained Liquidity
  • Risky CRE Lending Deadly for Banks
  • Movie Gallery Files Bankruptcy, Closing 800+ Stores
  • Capital Market Recovery Will Take Time
  • Distressed CRE Assets Jump 15% at Nation’s Banks
  • Shopping Center Receiverships and Foreclosures Usher in New Year

The stories getting the most reads in last two months were more longingly hopeful.

  • Have Commercial Real Estate Prices Bottomed Out?
  • Has the CMBS Market Finally Turned the Recessionary Corner?
  • Google Acquires One of NYC’s Largest Buildings for $1.8B
  • REIT Execs Hail Rally
  • U.S. Multifamily Market Strengthens in Third Quarter on Rising Demand, Falling Vacancy
  • Falling Retail Rents Mean More Store Openings
  • Surge in Growth at Apple Prompts 100-Acre Cupertino Acquisition

The article also includes 2011 CRE outlooks that were sent in by CoStar readers. The most interesting of which for Nashville may be the assessment of office and industrial vacancies.

Office, Industrial Vacancies Near Peaks

The U.S. office market vacancy rate is expected to slowly decline over the next two years, falling to 16.4% by the end of 2011 and to 15.3% by the end of 2012, according to analysis from CBRE Econometric Advisors (CBRE-EA). CBRE-EA forecasts that the office vacancy rate will peak in second quarter of this year at 16.8%, up from the 16.6% level at third quarter.

“The recent increase in leasing is a step in the right direction but activity is uneven across markets and generally tenant footprints are not increasing,” said Arthur Jones, senior economist of CBRE-EA. “Since office space is the ‘economy in a box,’ continued job growth is key to the market’s ongoing recovery.”

The U.S. industrial real estate sector’s national availability rate is expected to fall to 13.1% in 2011, down from 14.% in the third quarter of 2010, according to CBRE-EA, which forecasts that the industrial availability rate is expected to continue declining during 2012, ending the year at 11.8%. The national industrial availability rate peaked at 14.1% in the second quarter of 2010.

With Nashville’s office vacancies down to 13.2% at the end of 2010, and industrial vacancies up to 11.7%, it’s good that we’ve beat national averages on both fronts, but we need to continue to whittle away at office vacancies and get industrial vacancies under control in 2011.

Am I sorry to see 2010 go? A little bit. It’s been a year that went better than expected, witnessing the HealthSpring expansion and groundbreaking and the “flagpole property” deal.

But, I too am cautiously optimistic about 2011. Here’s to breaking expectations two years in a row.