News Summary
The Citizens Plaza office tower in downtown Nashville has been sold for $16 million, a notable decrease from its previous appraisal of $74.85 million. This 15-story property has seen its value significantly drop due to changing real estate market conditions influenced by the COVID-19 pandemic. Originally owned by the state of Tennessee, the building has historical significance as it once housed Tennessee’s first minority-owned bank. With ongoing shifts in office space demand, the sale marks a critical moment in Nashville’s evolving real estate landscape.
Nashville, Tennessee – The Citizens Plaza office tower in downtown Nashville has been sold for $16 million, a significant decline from its recent appraisal of $74.85 million by Metro. The property, situated at 400 Deaderick St., spans 244,957 square feet across 15 stories and sits on 0.57 acres of land. Opened in 1985, the building reaches nearly 200 feet in height and is now under the ownership of Mourya Hotels LLC, represented by Nayan Patel and Nishith Jobalia.
The sale of Citizens Plaza marks a pivotal moment amidst ongoing shifts in the real estate market. The office tower, which was previously owned by the state of Tennessee since 1986, was initially purchased for approximately $25.36 million. In early 2021, its appraised value was around $61.58 million, but this figure has dropped significantly in recent years. The state began marketing the property for sale in early 2018, coinciding with the departure of most state employees from the building.
Essential discussions between the state and Metro regarding the sale continued into 2022, but these communications ceased by July 2023, prompting a renewed effort to market the property. The marketing and sales process was overseen by senior vice presidents with CBRE, Roscoe High and Morgan Hillenmeyer.
Citizens Plaza has a historical significance, having originally housed the main offices of the Citizens Savings Bank and Trust Company, Tennessee’s first minority-owned bank established in 1904. The bank has since relocated to 1917 Heiman St. The building is currently the office for the Tennessee Arts Commission, a state agency.
The transaction comes at a time when office space valuations across Nashville and the country are reportedly declining, driven largely by changing workplace norms following the COVID-19 pandemic. The need for traditional office space has been affected as remote and flexible work options have led to increased vacancy rates. As of early 2024, it is estimated that about one in five downtown Nashville offices are vacant, with older buildings facing the most significant challenges in attracting tenants.
The new owners, Mourya Hotels LLC, have connection ties to previous real estate ventures, including a stalled construction project of a Radisson RED hotel at a different location in Nashville. Nishith Jobalia is also affiliated with Manek Holdings LLC, which owns the site of the halted hotel project at 333 Union St. This indicates a continuing interest in Nashville’s real estate market, albeit with careful consideration given the current economic climate.
The sale of Citizens Plaza not only underscores the drastic changes in the real estate market prompted by the pandemic but also highlights the ongoing adaptation of businesses to meet new demands for office spaces. As Nashville continues to develop and grow, the fate of older office buildings remains a critical focal point for stakeholders in the city’s real estate landscape.
In conclusion, the sale of Citizens Plaza for $16 million serves as a significant indicator of the evolving real estate dynamics in Nashville, reflecting both local and national trends in office space utilization and valuation amidst a shifting economic environment.
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Additional Resources
- Nashville Post: State Takes Loss on Sale of Downtown Building
- Wikipedia: Nashville
- Rebusiness Online: Amazon to Expand Office Footprint at Nashville Yards
- Google Search: Nashville real estate trends
- Tennessean: Nashville Office Buildings Sell Deep Discounts
- Google Scholar: Nashville office market
- The Real Deal: Local Investors Bought Discounted Nashville Office Building
- Encyclopedia Britannica: Nashville
Author: HERE Nashville
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