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VOL. 38 | NO. 4 | Friday, January 24, 2014

Lack of office space slows Sumner’s momentum

By Hollie Deese

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For businesses considering a geographic change, Hendersonville is a natural fit with its proximity to Nashville and access to all of the perks of the ‘It City.’

Located just 18 miles from downtown Nashville, and 20 miles from the airport, Hendersonville also has nearly 30 miles of premium Old Hickory Lake shoreline. Housing options are abundant, and suitable for all economic levels of employees.

But while housing is plentiful, office space is not, creating a serious issue when recruiting new companies.

“There is housing here for the executive all the way down to the receptionist,” says Danny Hale, CEO of HALO Realty. “There is an abundant labor force. And with all of the new retail growth, there are places for people to shop here, so companies are taking a second and third look at Hendersonville, and all of Sumner County for that matter.

“Typically, they can relocate here and rent rates are less than they are in the business district, and without the congestion you have downtown.”

Hale has long been a proponent of bringing new business to the area, promoting Sumner County as a complete destination for corporate relocation. Businesses have listened, and commercial growth has been strong.

“There is a shortage of office space in Hendersonville now,” Hale explains. “Vacancy has dropped to below 3 percent, so we are having a hard time finding space for companies who are looking to relocate here now.

“We are at full occupancy. There is just no space for anybody who needs office space to come to Hendersonville. We are down to just the last four or five spaces that are available.”

Waiting on buildings

Hale says new office space builds take 12-18 months, and while there are two 12,000-20,000 office buildings in the works, it will be more than a year before they are realized. And really, it just isn’t enough.

“They are already pre-leased, so that is not going to give any relief to the office demand there,” Hale says. For now, businesses are forced to choose another place to move.

“There is just no place for them to locate here.”

Hale says the demand will result in several new office complexes being built over the next two years, and newcomers are willing to pay.

“North Nashville rent rates rose higher than any other area last year, hitting 11 percent,” he adds. “And we have the lowest vacancy rate of anywhere in Nashville right now at less than 3 percent.”

Hale says Gallatin and Portland continue to experience industrial growth, only driving up the demand for retail and office space.

“We continue to be rated as one of the No. 1 places to relocate your company,” Hale explains. “Sumner County is the place to be.”

Indian Lake retail thrives

Indian Lake Village, a development on more than 400 acres, began construction in 2002. The Streets of Indian Lake opened in the Indian Lake Village development in 2008 with 182,000 square feet of retail, restaurants and a movie theater.

But growth stalled until 2011. Since then, new restaurants, retail and even a surgery center have opened their doors. And growth continues.

“Right now, Hobby Lobby is under construction, and there will be a little bit of shadow retail in the smaller spaces that will be built along with that,” Hale says. “Two smaller tenants are going to be in the mix out there.

“Currently, Culver’s is in the process of constructing a new restaurant. They have purchased a lot there and will hopefully be done with construction by the end of 2014.”

Along Indian Lake Boulevard, retail land is starting to become scarce.

“There is not much more,” Hale says.

However, The Streets of Indian Lake is still struggling to reach full occupancy.

“They have been stuck at about 86-87 percent, but I think that is more of a corporate decision about their rent rates,” Hale adds. “But the stores that are there are doing pretty well.”

Fresh produce, please

Along Main Street in Hendersonville, the old Kmart in the Maple Row Shopping Center is set to get a facelift and a number of new businesses. Victory Real Estate Investments of Georgia owns the 167,401 square-foot facility and was approved earlier this month to move forward with redeveloping the 35-year old building, which has been vacant since 2012.

“They are getting ready to break some of that Kmart into two or three spaces, much like they did with the Kmart center that was repurposed in Gallatin in a few years ago,” Hale says.

And there’s more. Hale says they are working with a 20,000-square-foot user new to the area, and while he can’t disclose yet who it is, locals are hoping for a specialty grocer like Trader Joe’s. A Facebook page devoted to bringing Whole Foods to Hendersonville has more than 1,200 likes.

“That is the No. 1 demand we are hearing right now, either a Trader Joe’s or Fresh Market, something in the fresh foods, organic foods area,” Hale says. “I think we are going to see in Hendersonville over the next 24-36 months some sort of fresh produce store. And I think we are going to see several retailers follow Sam’s lead and relocate from Rivergate area. And then we are going to see retailers who are not yet in the area choose Sumner County as home.”

Transit needs work

An $18 million dollar road and five-lane bridge project associated with Indian Lake Village was completed in the last six months, which allows drivers access to the north side from Vietnam Veterans Boulevard. Improvements for the 386-Vietnam Veterans bypass itself are in the works as well.

“The long-term plan now for Vietnam Veterans is to add a third lane on each side, but that is probably not going to materialize for 8-10 years,’’ Hale adds.

The Gallatin-Hendersonville-Goodlettsville-Nashville corridor was tapped as one of the most pressing in terms of needing alternative transportation solutions in a long-range study done in 2010 by the Metropolitan Planning Organization for their “Bold New Vision for Transit.” But without a dedicated source of revenue for the project, nothing is for sure.

“I think we are going to have to look at mass transit over the long haul,” Hale says.

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