The First Tennessee Bank building is under contract to be sold for a mixed-use commercial and residential space in Downtown Chattanooga. Currently owned by its namesake First Tennessee Bank, the 16-story building at 701 Market Street will be sold to Memphis based development group Heritage Land and Development.
Noted in the 2013 City Center Plan by River City Company, the First Tennessee Bank building was highlighted as a potential housing site as several existing commercial floors then and now sit vacant.
In addition to the City Center Plan in the same year, a downtown market study focused on the commercial and residential climate showed that current pent up demand for downtown housing including 2,300 apartment units in addition to 3,500 student units with an additional 900 unit absorption rate yearly after that demand was filled. Furthermore, the existing available commercial space could satisfy the downtown market until 2020.
“From both the City Center Plan and the market study, we knew people wanted more housing options downtown,” said Kim White, River City Company president and CEO. “And with projects like the select floor conversion of the First Tennessee Building into residential space, this project showcases how we can think differently about our downtown buildings. First Tennessee has been a long time downtown stakeholder and supporter, and we are excited about their new take on the building along with having a talented development group like Heritage Land and Development re-invest in our city.”
As a term of the sale of the building, First Tennessee will have a long-term lease on the first three floors of the building which will house a financial center and executive offices. Three additional floors will remain office space.
“First Tennessee is the banking market leader in Chattanooga and remains committed to the area,” said Keith Sanford, First Tennessee’s Market president. “It is more efficient for us to lease than own, and we are excited to see the added value the building can provide in Downtown Chattanooga. Yet, the sale of the building will not change First Tennessee’s commitment, services or presence in the Chattanooga Market.”
Heritage Land and Development has already made an investment in Chattanooga with a recent purchase of the Maclellan Building on Broad Street to be converted into 90 apartment units along with keeping the existing BB&T Bank location and adding an additional first floor retail and restaurant concept.
“Chattanooga is an in-demand market where we can create much needed housing options in the urban footprint,” said Will Yandell, principal at Heritage Land and Development. “With the ground work that’s been laid with studies and community input, we are excited about a second opportunity to invest in the core of Downtown Chattanooga.”
Closing is set for March 2016 with construction to begin shortly after closing.