A 31-story office tower in downtown Nashville is next in line for the discount bin.
Fifth Third Center, at 424 Church Street, is under contract to sell at a loss, just one day after its largest tenant and namesake confirmed it’s leaving for good, the Nashville Business Journal reported.
Fifth Third Bank will relocate its Nashville headquarters to 20,000 square feet at the Neuhoff District, New City Properties’ mixed-use development in Germantown. The bank has occupied two full floors at the 650,000-square-foot tower since 2006 and will exit when its lease expires next April. The move adds to a cascade of tenant departures from downtown towers, including Sony Music Publishing and Regions Bank.
Blackstone subsidiary Revantage, which paid $144.8 million ($223 per square foot) for the building in 2019, won’t recoup its investment, sources told the outlet. A buyer and sale price have not been disclosed, but the tower’s appraised value has already fallen by 24 percent to $111 million, amid Nashville’s wider office downturn.
The property, built in 1986, is the city’s fifth-largest office building and was put on the market last year. Its trade is one of several recent distressed sales reshaping the downtown landscape.
In December, Philips Plaza sold for $94 million below its prior valuation, and Parkway Towers and the Court Square Building sold at a combined loss of $26 million.
Atlanta-based New City Properties’ Neuhoff District, where Fifth Third is relocating, has emerged as a top draw. It recently lured Boston Consulting Group and law firm Butler Snow from downtown towers to its adaptive reuse campus, which includes office, retail, residential and public space.
Cushman & Wakefield is representing Blackstone in the sale. The pending deal will likely set a new comp for the Nashville office market as landlords adjust expectations in a landscape shaped by vacancy, valuation resets and tenant migration.
— Judah Duke