The Tennessean is putting its longtime offices up for sale, as the media company considers a new downtown Nashville home better suited for its expanding digital operation.
Though no sales price has been named, the 10-acre property at 1100 Broadway covers a full city block adjacent to the booming Gulch neighborhood and is expected to fetch a sizable price for The Tennessean's parent company, Gannett Co. Inc.
Laura Hollingsworth, president of The Tennessean and USA TODAY Network –Tennessee, said plans call for moving the news, business and sales operations to a yet-to-be-identified space in Nashville.
With more technology, open and collaborative spaces and specialized work areas, that new location would align more closely with the multimedia company's digital focus, she said.
“We believe this to be critical to our continued success and growth,” Hollingsworth said, adding that the newspaper’s current location was built for the manufacturing era.
Commercial real estate firm CBRE is handling listing of the property's three adjacent parcels, totaling roughly 435,600 square feet of land area. The site could draw strong interest considering that there are only a few large developable tracts in the downtown area, but real estate observers also see a limited number of potential suitors that could afford it.
The Tennessean’s location is sandwiched between two major redevelopment sites.
To the east, Southwest Value Partners is designing a large mixed-use project for LifeWay Christian Resources’ former 14.8-acre campus, which that San Diego-based real estate investor bought for $125 million in cash last fall. Preliminary plans called for a mix of hotel, entertainment and commercial development, along with creative office and residential uses.
On the west end of the newspaper’s property, Austin, Texas-based Endeavor Real Estate Group last year paid $14.6 million, or roughly $209 a square foot, for 1.6 acres including the former Nelson Mazda dealership site and an adjacent vacant lot. A Whole Foods grocery store will anchor the planned mixed-use project that’s also expected to include apartments along with restaurant and retail space.
CBRE’s listing of The Tennessean’s property doesn’t include an asking price. Nashville land broker Fred Kane of Cushman & Wakefield Nashville referred to the property as an “A location” that could be worth $87 million, or roughly $200 a square foot.
“That’s a lot of money to put down for land to carry on your books,” he said. “It feels like we’re in a boom because there’s still a lot of construction going on, but there’s definitely less demand now.”
Real estate observers said The Tennessean’s property would be especially attractive to an investor or developer such as Endeavor Real Estate Group with adjacent property.
“We like the dynamics of Nashville long-term,” said Jamil Alam, a managing principal with Endeavor, speaking generally. “We’re primarily interested in the Gulch and Midtown.”
Under a sale-lease arrangement in the proposed transaction, Gannett will want to negotiate the ability to remain on the property for up to 18 months from the transaction closing date. The preference is to sell the overall 10 acres as one parcel, CBRE broker Steve Preston said.
In addition to the 3.2 acres at 1100 Broadway on which The Tennessean's main 50,981-square-feet building sits, the listing includes 5.65 acres at 120 11th Ave. N., 0.81 acres at 1100 McGavock St. and 0.34 acres at 115-117 12th Ave. N
Hollingsworth said finding a location in the region for a new production and distribution facility that would house printing presses is a top priority for The Tennessean and Gannett.
One of Gannett’s busiest printing operations nationwide, the presses run seven days a week, churning out The Tennessean, USA Today, The New York Times, and other regional publications and commercial advertising work.
Listing of The Tennessean’s location mirrors moves by Gannett in other cities where the nation’s largest newspaper chain owns properties.
More broadly, the major industry chains have been selling off real estate to reduce overhead, leaving prime downtown locations for cheaper rental space in the suburbs that’s better designed to reflect the industry’s transition to digital media. Such property sales have also raised cash to help pay down debt.
Last fall, London-based real estate investor Tamares Group acquired Gannett’s 787,000-square-foot headquarters complex in Tysons Corner, Va., for $270 million. In recent years, the newspaper chain has sold longtime offices of newspapers such as the Indianapolis Star in Indiana and the Democrat & Chronicle in Rochester, N.Y.
Hollingsworth, who as publisher of the Des Moines Register oversaw that Iowa newspaper’s relocation from its longtime home to modern new offices three years ago, said The Tennessean remains committed to exceptional journalism and to Nashville.
“This is good timing for us and for city redevelopment prospects, so that’s a win-win,” she added about the property listing. “It’s an exciting future we have in store.”