August 04, 2015

New Cool Springs Office Space Targets Expansions, Relocations

The Tennessean
By Josh Adams
FRANKLIN — One of the statistics that flatter the economy in Williamson County also has the potential to result in missed opportunities.
A stunningly low volume of office space — approximately 5 percent — is all that sits dormant here, which speaks to how desirable a location Williamson County is for companies to expand and relocate. But with so little of this property on the market, prospective occupants must either wait for something to open up or turn their search elsewhere.
“It could conceivably be an issue, but fortunately it hasn’t been,” said Matt Largen, director of Economic Development for the county.
As the country continues to put the recession in its rearview mirror, developers are again introducing new office space in Cool Springs. Projects are under way and, according to several people with an eye on the industry, there is no reason to think such growth won’t continue.
Jason Holwerda is a vice president at Crescent Resources, a development firm with almost a dozen office properties in Cool Springs. Crescent announced last week that it is designing a 155,000-square-foot structure to go next door to its property that houses Jackson National Life Insurance.
Crescent’s last two office buildings sat stagnant for a bit, Holwerda said, but his company and others in the area recognize the time is right to start building again. In combination with the lack of available property, rental rates are climbing.
“I think in general we all kind of see the same thing. All the large chunks of space were taken off the market,” Holwerda said. “The biggest driver was just the vacancy rates.”
Boyle Investment Co. expects to make a new 190,000-square-foot office building available this summer. That property, at 5000 Meridian Blvd., will be the eighth and final project of its kind for the company in its mixed-use Meridian development. Thomas McDaniel, director of office properties for Boyle, said some prospective tenants were concerned they couldn’t immediately move in.
Boyle also expects to begin vertical construction this summer on its Berry Farms project, a 600-acre mixed-use site south of Cool Springs.
Generally, so long as construction is under way, companies are willing to wait several months for an office project to be completed. Larger tenants typically adopt a longer time frame, McDaniel said.
At the county office of Economic Development, Largen is trying to land the big fish. Those businesses usually need between 50,000 square feet and 100,000 square feet, he said. In recent years he has worked with more companies looking for less, roughly 30,000 square feet.
Will corporations move south?
Exactly where in Williamson County the next crop of offices will sprout depends a bit on who’s answering the question. Along Interstate 65 is the safe bet, but whether developers and their tenants are willing to head farther south toward Spring Hill or laterally across the county is debatable.
Largen has been of the opinion that this growth won’t stretch too far south so as to make commuting to Nashville or the airport a hassle, but he acknowledged that the recent announcement of Mars Petcare building moving its regional headquarters to rural Thompson’s Station puts a crack in his theory.
McDaniel, with Boyle Investment Co., predicted there won’t be a big shift from what we’ve seen over the past decade. One-third of development will increase the density in more urban areas, but developers will continue to stake new ground.
Holwerda said there is still another decade’s worth of land to develop in the heart of Cool Springs. His company has 60 acres to the east of the interstate, he noted.
Spectrum Properties owns 70 acres south of Nissan’s headquarters.
Based on zoning regulations and available land, the county could accommodate an additional 6 million square feet of office space, Largen said.
“It’s not the same kind of development it was in 2006 with people lining up to write checks for these buildings, but we’re getting back to that,” Holwerda said. “It is slowly and healthily coming back. It’s good growth.”