Investor’s Deal Beats Next Closest by More Than $100 Million
Starwood Capital Group paid a record price for this building in downtown Nashville, Tennessee. (CoStar)
By Richard Lawson
February 21, 2020 | 04:46 P.M.
Global investment firm Starwood Capital Group officially owns a trophy tower in downtown Nashville, Tennessee.
The Miami Beach, Florida-based real estate company shattered the sales record for a downtown office tower by paying Houston developer Hines $264.1 million for the 222 building, according to property records. That works out to nearly $729 per square foot for the 362,475-square-foot office portion.
The tower’s 29,000-square-foot retail portion remains with local real estate firm C.B. Ragland & Co. The firm owned the land and joined with Houston-based Hines on developing the 25-story skyscraper, which opened in 2017.
In the deal, Starwood bought the parking garage as well, which is considered a money-making machine given its location across from Ascend Amphitheater and within walking distance of Nissan Stadium, home field to the NFL’s Tennessee Titans.
Starwood’s price far surpasses the $152 million that Raleigh-based Highwoods Properties paid in 2013 for The Pinnacle at Symphony Place, a block away from the 222 building. The sale price more than doubles the record per-square-foot price Vancouver, Washington-based The Agnew Co. paid for One Nashville Place in 2018.
CoStar first reported last year that Eastdil Secured had begun marketing the building and first reported in January that Starwood had the building under contract. CBRE’s Nashville office, which is in the tower and handles the office leasing, assisted in the deal.
Bank of America and Nashville-based architectural firm Gresham & Smith Partners are the largest tenants in the 222 tower. CoStar data shows the building as basically full.
The tower is in a part of the city center that has seen significant office, residential and hotel development over the past six to seven years.
“Downtown Nashville is perhaps the strongest office node in Nashville right now,” said Alex Tkac, CoStar’s Nashville market analyst. “Vacancies are hovering around a historical low at 6.9%. And CoStar data shows that office rents have increased by 7.4% over the past 12 months, well outpacing the national average.
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