The First Tennessee Bank building is under contract to be sold for a mixed-use commercial and residential space in Downtown Chattanooga. Currently owned by its namesake, the 16-story building, located at 701 Market St., will be sold to Memphis-based development group Heritage Land and Development.
Noted in the 2013 City Center Plan by River City Company, the First Tennessee Bank building was highlighted as a potential housing site, as existing commercial space sits vacant.
A downtown market study conducted the same year as the City Center Plan showed that pent up demand for downtown housing including 2,300 apartment units in addition to 3,500 student units, with an additional 900 unit absorption rate yearly after that demand was filled. Furthermore, the existing available commercial space could satisfy the downtown market until 2020.
“From both the City Center Plan and the market study, we knew people wanted more housing options downtown,” Kim White, River City Company president and CEO, said in a press release announcing the sale. “This project showcases how we can think differently about our downtown buildings. First Tennessee has been a long time downtown stakeholder and supporter, and we’re excited about their new take on the building along with having a talented development group like Heritage Land and Development re-invest in our city.”
As a term of the sale of the building, First Tennessee will have a long-term lease on the first three stories of the building, which will house a financial center and executive offices. Three additional stories will remain office space.
Keith Sanford, First Tennessee’s market president, said it’s more efficient for the bank to lease than own. “We’re excited to see the added value the building can provide in Downtown Chattanooga,” he said. “Yet the sale of the building will not change First Tennessee’s commitment, services, or presence in Chattanooga.”
Heritage Land and Development has already made an investment in Chattanooga with a recent purchase of the Maclellan Building on Broad Street, which is to be converted into 90 apartment units, along with keeping the existing BB&T Bank location and adding retail and restaurant space.
“Chattanooga is an in-demand market where we can create much needed housing options in the urban footprint,” said Will Yandell, principal at Heritage Land and Development. “With the ground work that’s been laid with studies and community input, we’re excited about a second opportunity to invest in the core of Downtown Chattanooga.”
Closing is set for March 2016, with construction to begin shortly thereafter.
Source: River City Company