Developer’s Encore on Music Row: An Even Bigger Office Building
Monday, February 1st 2016
NASHVILLE, TN – The principals at Panattoni Development Co. are just wrapping up the first office building on Nashville’s famed Music Row in at least a decade — and they’re already pursuing an even larger encore.
The 120,000-square-foot building would be welcome not just in Nashville, where the historically low amount of available space handcuffs companies that are trying to expand, but especially on Music Row, where the country music recording industry was born six decades ago. A complete lack of any sizable modern office space is one factor that’s prompted big brands to decamp from the mile-long Midtown neighborhood in recent years, moving to offices as varied as downtown skyscrapers to Franklin, 20 miles south.
Music Row has become a high-profile flashpoint in Nashville’s real estate boom and epic blitz of construction, in part because generally speaking, the buildings are significant for their cultural impact, not their architectural or design features, which is what preservationists typically focus on. Some of those buildings have been torn down for apartment complexes and the proposed site of Virgin Group Ltd.’s luxury hotel. For the past year, the Metro Planning Commission’s policy has been not to endorse zoning changes on Music Row that would allow developers to build more on a particular site — an effort to pause the action and buy time to create new standards for Music Row development (that work may not end until June; check out the progress here).
In Tennessee, Panattoni is known for its industrial development — 50 projects, totaling 35 million square feet. The company developed the distribution hub for sports apparel company Under Armour Inc. (NYSE: UA), which opened a couple of months ago in Mt. Juliet.
Panattoni, which is based in Sacramento, Calif., has developed office buildings in other cities. As we speak, Panattoni is finishing work on its first in Nashville, a five-story office building at 35 Music Square East. The $31 million building is almost fully leased, with anchor tenants including the headquarters for SESAC, which works on royalties and licensing for artists, and also for the Country Music Association.
Panattoni quoted rent of $35 per square foot for the space, which is a leap from current office rent on Music Row and a reminder not just of how long it’s been since new office space was developed on Music Row, but also how little top-flight Class A office space is available to rent anywhere in Nashville these days. Music Row is part of the Midtown market, where just 2.9 percent of all Class A office space was available to rent as of year’s end, according to statistics from brokerage firm Cushman & Wakefield.
Panattoni’s proposed second office building contains 25 percent more space than its first, which was 96,000 square feet. Nashville’s Tuck-Hinton Architects designed that first building and is also designing the proposed one as well.
The Metro Planning Commission is scheduled to review Panattoni’s requested zoning change at its March 10 meeting. The proposed building would be 65 feet tall (roughly five or six stories), according to the newly filed zoning change.
As we’ve reported, for this project, Panattoni is under contract to buy the 0.9-acre site at 1 Music Circle South — the now-former home of CMA’s offices.
That property falls outside of the territory the planning commission designated for its policy of not endorsing zoning changes to allow larger development to occur. That said, the draft of the design rules Metro is working on for Music Row would limit a building there to five stories.