Nashville team to redevelop furniture warehouse in Germantown as office space
*Premium content from Nashville Business Journal by Nevin Batiwalla, Staff Reporter - Nashville Business Journal
The team behind some of Nashville’s most notable redevelopment projects has kicked off its next undertaking: transforming the Cresent Furniture building in Germantown.
Partners Ronnie Wenzler, Tom Gibson andAllen Arender plan to turn a vacant warehouse at 1009 Third Ave. N. into 40,000 square feet of office space with a capital investment that could top $5 million.
The group has brought on architect Nick Dryden, whom they also worked with to design the redevelopment of the Sawtooth Building from a vacant industrial warehouse to the headquarters for gadget accessory maker Griffin Technology.
“We could start doing tenant build-out by the end of this year,” said Arender, who heads development in Nashville for South Bend, Ind.-based Holladay Properties Inc. “Our goal is to be moving tenants in first quarter of next year.”
The partners hope the 2-acre site’s proximity to East Nashville and downtown will appeal to creative firms with younger employees.
“Companies are going to feed off of the sheer number of young people within a few miles looking for a unique work experience,” Wenzler said. “We have potential tenants identified. There’s been a lot of activity.”
With a track-record of re-imagining old buildings (the team also converted the former Collins & Aikman Corp. manufacturing plant at 660 Massman Drive into warehouse and office space), the group should have no trouble doing it again, said Tom Hooper, a broker with Eakin Partners.
“Sawtooth was a home run,” Hooper said. “They took a building with interesting features and updated it. (It was a) good match for the architecture of the building and creativity of the tenant.”
Historic Germantown, an 18-square-block neighborhood bounded by Jefferson Street on the south, Hume Street on the north, Rosa Parks Boulevard on the west and Third Avenue North on the east, has seen new homes, restaurants and shops spring up over the past decade. Now the neighborhood is generating interest from office users, Hooper said.
“We’ve got clients looking in that area now,” he said. “We are bullish on that part of town.”
Though new construction is typically more expensive, redevelopment projects present their own challenges. Due diligence is key when searching for potential redevelopment sites, which means the process of buying property can take longer than usual, Wenzler said.
“Everybody talks about the money pit, where somebody gets into a project and it just sucks them down and becomes something bigger,” Wenzler said. “The key component to redevelopment is having an understanding of the real costs of reconstruction. … We start from a very practical standpoint: What are the opportunities here? What are the costs? What are the risks?”
When searching for a potential redevelopment site, the group may have to make offers on five properties before landing one. But it’s crucial to never overpay, Wenzler said.
Getting the property at a lower price allows for “a big enough margin for error where you can miss and still win,” Wenzler said.
For Wenzler, restoring old to new comes with a great deal of satisfaction.
“Aesthetically what happens when something gets re-imagined is the community around it responds to that in a different way than new construction,” Wenzler said. “You get a different experience. It speaks to you in a different way to let something be what it is but make it more useful.”