Bridgestone Americas’ decision to move its headquarters from the airport area to downtown Nashville illustrates a larger trend: more businesses are eyeing downtown relocations and more inventory there is being prepared for office tenants.
Two big downtown buildings, the UBS Tower and the AT&T Tower, are being renovated for spiffier office digs, and Bridgestone is promising to bring 1,700 workers to downtown.
The fourth quarter of 2014 saw the state of Tennessee leasing more than 100,000 square feet of office space in the UBS Tower, and Bridgestone is expected to lease out 514,000 square feet of its new office space.
“For twenty years, I’ve seen nothing but folks move away from the river — whether’s that West End, Brentwood, or Cool Springs — and starting about a year and a half ago, all we’ve seen in more folks moving to downtown,” said Crews Johnston with the real estate firm Cassidy Turley. “Most pinpoint that to this Millennial workforce force, chasing the workforce of the future downtown.”
In addition to the back-to-the-city movement, Johnston said suburban office space is tight. And for several corporate employers that require a lot of parking, many existing suburban lots can’t accommodate.
By contrast, one hidden downtown perk is that parking can be outsourced to LP Field, which contracts out some of its overflow space to employers like Asurion and Service Source.
“So actually downtown becomes a place that can park these cars,” Johnston said. “Now it’s not cheap, but they can park them, whereas a stand-alone suburb office building, you either got it, or you don’t.”
Downtown Nashville still has a way to go, though. Cassidy Turley’s latest report on office space found that the downtown area’s 60 buildings are 85 percent full. Johnston said the sweet spot is around 90 percent. The West End corridor, by comparison, is more than 97 percent full.
The future of office buildings in Nashville will be focused south of Broadway and the Gulch because there’s still some available land and it’s seen as an extension of downtown, according to Johnston.
The parking lots that now dot parts of the heart of Nashville’s downtown will eventually be developed into hotels or condo buildings, Johnston predicts. But some of those projects could have mixed-use plans and house some office workers.