Nashville City Center Hits Market Ahead of Major Tenant Exit

One of downtown Nashville’s best-known office towers is up for grabs just as it’s poised to lose one of its biggest tenants.

Austin-based CapRidge Partners listed Nashville City Center, a 27-story, 477,000-square-foot building at 511 Union Street, for sale, the Nashville Business Journal reported, citing Newmark marketing materials.

The 1988-built tower — also known as the First Horizon building — has been a downtown fixture for decades, but it’s facing a looming hit to occupancy.

Holland & Knight, which inherited space in the building through its 2023 merger with longtime Nashville firm Waller Lansden Dortch & Davis, plans to vacate its nine floors and 159,000 square feet next year for new space at Highwoods Properties’ Symphony Place in SoBro. That exit, along with other recent move-outs, will leave a major hole in the property.

CapRidge acquired Nashville City Center for $105.3 million in 2019, marking its debut in the market. However, it doesn’t own the underlying land. An affiliate of former owner Alliance Partners, Terra Funding, holds the 0.75-acre piece of dirt under a long-term ground lease, according to Metro records and CoStar.

There’s no asking price, but Newmark brokers Ryan Reethof, Jay O’Meara, Justin Parsonnet and Austin Sheahan are pitching the property as a flexible opportunity amid a shifting office market.

Marketing materials suggest potential for re-leasing or converting upper floors to another use.

Nashville City Center — home to First Horizon Bank’s local headquarters — has suffered from a thinning tenant roster in recent years. Foundry Commercial, which both leased space and handled leasing for the building, also relocated to SoBro earlier this year.

The listing comes amid widespread stress in Nashville’s office sector, where rising vacancies and hybrid work have prompted a wave of distressed sales and conversions.

In August, Dreamscape Companies paid $55.25 million for the nearby Fifth Third Center at 424 Church Street, a 62 percent drop from its prior sale price, with plans to convert it into a 500-room hotel. Similar plays are underway at nearby Philips Plaza and 211 Commerce, the latter being redeveloped into Dolly Parton’s Songteller Hotel.

A few blocks down, construction is set to begin at 1010 Church Street on Giarratana Development’s the Paramount, set to be the tallest tower in Tennessee.

Newmark estimates nearly 2 million square feet of downtown office space is slated for removal or conversion.

— Eric Weilbacher