Of real estate markets old and new At face value, Murfreesboro, Tenn., and lower Manhattan may not seem too similar, but both are slated for more than 1.5 million sq. ft. of new development that will significantly alter both markets. For Murfreesboro, southeast of Nashville, the new development is the vision of local and state economic development officials who wish to create a suburban market and drive it into the next century. For Manhattan, 2 million sq. ft. of new Class-A office buildings are the impetus of New York-based Trinity Real Estate, an affiliate of a 300-year-old church, whose land holdings stem from a 1705 grant from England's Queen Anne.
Murfreesboro chose Atlanta-based Carter & Associates*ONCOR to develop, build and market a new $45 million commerce center, which will include 1.5 million sq. ft. of office space, a 200-room resort hotel and regional conference center, and a 27-hole golf course. Murfreesboro hopes to take advantage of a surging Nashville-area economy as high-tech and service companies move into middle Tennessee. The city hopes to attract corporate office users initially and then develop facilities for multi-tenant use, according to John Willig, vice president and project director for Carter & Associates.
"[Local leaders] realized they needed to do something different," says Willig. "This will not look like a commodity office park with the amenities of the Stone's River, the golf course and Middle Tennessee State University."
Taking an area once dominated by the printing industry and transforming it into Class-A office space, Trinity Real Estate plans to add more than 2 million sq. ft. of Class-A space in lower Manhattan's Hudson Square. Over the past decade, Trinity has redeveloped more than 2 million sq. ft. in Hudson Square, about half of the company's portfolio.
Trinity has four development sites in the area, including Four Hudson Square, which can accommodate a 1.2 million sq. ft. building. The remaining sites can accommodate either redevelopment or new construction. Trinity will not begin construction without an anchor tenant, but the company can offer rents between $15 and $20 per sq. ft. cheaper than comparable properties in other areas because of the company's low cost of ownership.
"The thing to remember about all of the sites is that Trinity is a long-term player; we've been around for 300 years," says Stephen Heyman, Trinity's director of commercial leasing. "With these sites, we're convinced that, if we build the larger buildings, we increase the value of the rest of the portfolio by a significant percentage."