Industries Commercial Real Estate

Lingerfelt Cos. buys $41 million property portfolio in Nashville from Highwoods Properties

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The Lingerfelt Cos. in Richmond has entered Nashville’s commercial real estate market with the purchase of a portfolio of five, Class A office buildings for $41 million. The seller was Raleigh-based Highwoods Properties, a public real estate investment trust (REIT) that owns many of the buildings in the Innsbrook Corporate Center in Henrico County.

The five buildings near Nashville International Airport, located within three office parks, total 484,047 square feet. Lingerfelt purchased Lakeview Ridge II, Lakeview Ridge III, Century City Plaza I and the two buildings that comprise the BNA Corporate Center. This represents the developer’s first deal in the Nashville market, and it paid about $85 per square foot for the properties.

In a press release, Ryan Lingerfelt, one of Lingerfelt’s principals, said the acquisition “provides us with a unique opportunity to acquire critical mass in the Nashville office market that is ranked as the second best suburban office market in the U.S.” 

He also noted that the buildings are close to Nashville’s central business district as well as the airport and busy submarkets of Brentwood and Cool Springs. “This portfolio is comprised of Class A office buildings that have been institutionally owned and maintained and have an impressive tenant roster and favorable occupancy of 86 percent. The building mix, range of sizes and rental price points will provide the company the ability to increase income through existing contract rental increases, additional lease-up activity and a manageable tenant rollover in an improving office market.”

The Airport North submarket has experienced an accelerated rate of growth over the last three to four quarters, Lingerfelt Principal Brian Witthoefft told Virginia Business in an interview.
“There’s a lot of wind at the sails in this area. It’s priced right and provides a quality, cost effective opportunity for tenants as opposed to some of the new product that is being delivered in the Brentwood/Cool Springs area. “

During the past two years, Lingerfelt has acquired more than 1.5 million square feet of property valued at about $200 million, not including the Nashville purchase.  A big chunk of that was a $100 million portfolio that Lingerfelt bought in suburban Richmond last year from Liberty Property Trust, another public REIT. Lingerfelt paid about $105 per square foot for that 919,000-square-foot portfolio. 
That deal made Lingerfelt one of the largest owners of Class A commercial real estate in Innsbrook, one of the Richmond area’s premiere office markets. However, this is the first acquisition the company has done with Highwoods Properties, Innsbrook’s primary office owner.

With the Nashville deal, Lingerfelt’s total portfolio is now about 3 million square feet of space, Wittehoefft said.

 


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