Company Signs Lease That Gives It First Dibs on Additional New Construction

When Amazon reversed its decision to put part of its second headquarters in Queens, New York, after a highly publicized nationwide hunt, it kicked off speculation about where the online behemoth would place those employees. Now those following the online retailer’s real estate travails are looking at Nashville, Tennessee.

The Seattle-based company didn’t make a new choice. Instead, Amazon officials stuck with just Crystal City in Northern Virginia and said the company would grow in existing offices.

As it turns out, that may eventually be more good news for Nashville, a surprise selection for an Amazon operations center that promises to bring the city 5,000 jobs. Amazon is anchoring a massive new development at the western edge of downtown called Nashville Yards, taking space in the first two towers being developed by San Diego-based Southwest Value Partners that total roughly 1 million square feet.

But it also has first right of refusal for expansion into additional office towers the developer has planned across Church Street, according to the lease filed with Metro Register of Deeds on July 5.

A future Amazon expansion wouldn’t come as a big surprise to local leaders.

“Many of the jobs announcements have produced more jobs than promised,” said Ralph Schulz, chief executive officer of the Nashville Area Chamber of Commerce. Schulz said Amazon has “never said they’re done looking at Nashville.”

The lease is for 20 years with two 10-year options. Construction has started on one of two initial towers. The second two could total 1.5 million square feet, with one having 1 million square feet alone.

“If Amazon indeed takes additional space in Nashville Yards, that could help ease concerns of overbuilding office in Nashville’s urban core,” said Alexander Tkac, CoStar’s Nashville market analyst.

Nashville Yards runs between railroad tracks and 10 Avenue North from Broadway Avenue to about Union Street. A Grand Hyatt hotel is well underway at Broadway Avenue. Los Angeles-based Anschutz Entertainment Group has plans to build an entertainment district within the development. A lot of public green space is also planned for the project.

The lease follows Metro Council’s approval of $17.5 million in economic incentives to Amazon. Tennessee has agreed to give the company a cash grant of $65 million for capital expenses if it hits 5,000 employees over the next seven years. Amazon gets another $21.7 million in job tax credits to offset state franchise and excise taxes.

Author: RICHARD LAWSON
Source: https://product.costar.com/home/news/shared/1079934151