Cannery Row 500,000 sq. ft. mixed-use project

[markhollin]

Thor Equities Group, a global real estate company based out of NYC, has finalized the $32 million purchase of the Cannery Row complex, which covers 110,000 sq. ft. on 2.8 acres (including 1.2 acres of surface lots) in various 2 and 3 story structures, some of which date back to the 1880s.  It is currently home to three music venues (Mercy Lounge, Cannery Ballroom, and The High Watt), as well as dozens of businesses/offices.  

Thor chairman Joe Stitt says he "intends to one day add an additional 500,000 square feet of mixed-use development to the expansive site." No further details of those plans were immediately available.

From NBJ:  Thor called the existing music venues "treasured" and "among the most recognized in Nashville’s music scene." Todd Ohlhauser, owner of three music venues, previously told NBJ that they would "remain open for many years to come" under an existing long-term lease.

Thor Equities owns billions of dollars of commercial real estate in Manhattan, including prime retail locations. Thor also owns real estate in London, Mexico City, Paris, Madrid, Milan, Montreal, and Austin.

Edward and Scott Warner bought the property in 1992 for $240,000. 

DZL, which owns the Cummins Station properties just to the north, is the equity investor in the deal, and Thor will serve as the developer and asset manager. Reliant Bank provided the loan.
 

This from The Post:  "DZL is excited to invest in the Cannery and expand our interests in the Station District," DZL's Zach Liff emailed the Post. "The opportunity to partner with Thor makes it even more attractive for us. It's rare to have the opportunity to make such a natural investment in line with our existing long-term goals while at the same time being able to partner with a major player in our industry that brings global capabilities and expertise right into the heart of our neighborhood. And to complete this transaction with Reliant Bank's support makes this an exciting effort that reflects the unique combination of local and cosmopolitan for which Nashville is now known."

“Having emerged as a tech hub in recent years, the city has attracted a host of companies across all industries ready to capitalize on the talent base and take advantage of all the city has to offer,” Sitt said in the release. “The live, work, and play lifestyle has thrived in Nashville and we are thrilled to enter the market with an acquisition that is emblematic of the city’s culture.”

More at The Nashville Post here:

https://www.nashvillepost.com/business/development/article/21093110/property-home-to-canner-row-sells-for-32m

More behind the NBJ paywall here:

https://www.bizjournals.com/nashville/news/2019/10/18/exclusive-ny-buyer-pays-32m-for-complex-home-to.html?iana=hpmvp_nsh_news_headline

And at The Nashville Scene here:

https://www.nashvillescene.com/music/nashville-cream/article/21093111/property-home-to-cannery-row-sells-for-32-million

I could see the northern portion of the site (see the map below), which is mostly surface lot (approximately an acre) being where most of the new development would take place in a tower or two.  Additionally, I could see Thor making a play to buy the Downtown Clinic and The Guest House which also inhabit frontage along 8th Ave. South directly south of the strip that Thor now owns at the SW corner of 8th and Drexel St.  Perhaps they will even make a move to buy up the .6 acre lot on the NW corner of 8th and Drexel that Jay Patel has been sitting on for 3 years.

[BnaBreaker]

Thrilled to hear that the new owner highly values the existing businesses and the structure in which they reside!

[markhollin]

Joseph Stitt of Thor Equities Group did an interview with NBJ about his plans for the Cannery Row project, including a 500,000 sq. ft. tower, and upgrading the existing historical structures.  Here are highlights:

What made Cannery Row the ideal debut deal for you? We like things that have physical histories, and obviously, it fits that. I love the architecture, the buildings, the history. We also like things we can grow and expand on. We happen to have that there, with the parking lots out in front.

How did you arrive at that choice? We actually searched for awhile to find such an opportunity and we had a very difficult time. Mostly what was available was plain old buildings that needed to be knocked down, or vacant lots. It was hard for us to find an asset we could buy that had a history to it. History brings perspective. It tells a story. It allows for a brand. When we say Cannery, people know which property we're talking about. What [we're] building new could become "Cannery Tower."

What do you want to build? We like the music venues that are there. That is part of what makes it special. People don't realize we're probably the most diversified property in the marketplace. We have music venues, office tenants, retail tenants and residential tenants. No one else has that mix. The goal is to continue with all four. And if you break retail into shops and restaurants, we have both of those. So really, it's really five things.

What timeline are you on? We're not in an extreme rush. I'd say it's at least a year and change before we start going full-blast over there. But a year goes by pretty quickly, with all the planning and design required. It'll be a big investment — tens of millions of dollars.

Are you already looking at other investments? Yes, certainly. We're starting to knock on doors. We're hoping people will come knock on our doors now, to bring us opportunities. As we get enough scale in the business community, we hope to get involved in the civic community and those organizations. For us, this is just the tip of the iceberg.

What was your first impression of Nashville? Great restaurants. Surprisingly, an incredible amount of great music venues. And while so many of the people there were new … everybody seemed to have a camaraderie. Last but not least was the local pride. You don't always see that. Historically, where I've seen pride of ownership, it's normally led to good success for those cities and good investments for us.

It made me not just think of it from the music perspective, as a tourist, but really realizing if a city like Nashville can recruit people away from New York, it must have something powerful. There aren't too many places moving and grooving like that city."

More behind the NBJ paywall here:

https://www.bizjournals.com/nashville/news/2019/10/31/exclusive-cannery-rows-new-owner-loves-music.html?iana=hpmvp_nsh_news_headline

[smeagolsfree]

At least they were not asking the old stupid questions like what's your favorite ice-cream or what's your favorite movie like they did in the past.

[markhollin]

Mercy Lounge, The Cannery Ballroom, The High Watt, and One will all cease operations inside the historic Cannery Building in May of 2022 and relocate to as-yet-unannounced new location.

In October 2019, New York City-based global real estate company Thor Equities Group paid $32 million for the Cannery complex. At the time, the company said in a press release it hoped to eventually add mixed-use buildings with a collective 500,000 square feet to the 2.8-acre site. Thor officials could not be reached for comment.

More behind the Nashville Post paywall here:

https://www.nashvillepost.com/business/music/mercy-lounge-sister-venues-to-close-at-cannery-will-relocate/article_32033534-21e8-11ec-89f9-3b679fe7a973.html

[Mr_Bond]

On 10/31/2019 at 7:49 AM, markhollin said:

Joseph Stitt of Thor Equities Group did an interview with NBJ about his plans for the Cannery Row project, including a 500,000 sq. ft. tower, and upgrading the existing historical structures.  Here are highlights:

What made Cannery Row the ideal debut deal for you? We like things that have physical histories, and obviously, it fits that. I love the architecture, the buildings, the history. We also like things we can grow and expand on. We happen to have that there, with the parking lots out in front.

How did you arrive at that choice? We actually searched for awhile to find such an opportunity and we had a very difficult time. Mostly what was available was plain old buildings that needed to be knocked down, or vacant lots. It was hard for us to find an asset we could buy that had a history to it. History brings perspective. It tells a story. It allows for a brand. When we say Cannery, people know which property we're talking about. What [we're] building new could become "Cannery Tower."

What do you want to build? We like the music venues that are there. That is part of what makes it special. People don't realize we're probably the most diversified property in the marketplace. We have music venues, office tenants, retail tenants and residential tenants. No one else has that mix. The goal is to continue with all four. And if you break retail into shops and restaurants, we have both of those. So really, it's really five things.

What timeline are you on? We're not in an extreme rush. I'd say it's at least a year and change before we start going full-blast over there. But a year goes by pretty quickly, with all the planning and design required. It'll be a big investment — tens of millions of dollars.

Are you already looking at other investments? Yes, certainly. We're starting to knock on doors. We're hoping people will come knock on our doors now, to bring us opportunities. As we get enough scale in the business community, we hope to get involved in the civic community and those organizations. For us, this is just the tip of the iceberg.

What was your first impression of Nashville? Great restaurants. Surprisingly, an incredible amount of great music venues. And while so many of the people there were new … everybody seemed to have a camaraderie. Last but not least was the local pride. You don't always see that. Historically, where I've seen pride of ownership, it's normally led to good success for those cities and good investments for us.

It made me not just think of it from the music perspective, as a tourist, but really realizing if a city like Nashville can recruit people away from New York, it must have something powerful. There aren't too many places moving and grooving like that city."

More behind the NBJ paywall here:

https://www.bizjournals.com/nashville/news/2019/10/31/exclusive-cannery-rows-new-owner-loves-music.html?iana=hpmvp_nsh_news_headline

Based on this interview Mark posted two years go, the iconic buildings would stay and be used for music.  I hope these operations can return to their historical locations after construction is complete.

[Flatrock]

28 minutes ago, markhollin said:

Mercy Lounge, The Cannery Ballroom, The High Watt, and One will all cease operations inside the historic Cannery Building in May of 2022 and relocate to as-yet-unannounced new location

OMG. Cannot even process this loss of space (for the existing music venues), and the magic it holds. I have countless memories tied to the music I've heard, the friends I've been with, all while surrounded by the old bricks and wood floors of those wonderful places. Damn. 

[smeagolsfree]

Again this goes back to the fact they have utility markings and core drilling markings around the property and they are getting ready to do a project of some sort along Palmer Street.

[nashvylle]

Just now, smeagolsfree said:

Again this goes back to the fact they have utility markings and core drilling markings around the property and they are getting ready to do a project of some sort along Palmer Street.

Do you know if the music venues will remain, but with perhaps different operators (Kind of like AJ Capital & Rock Block/ExitInn)? 

[grilled_cheese]

Absolutely disgusting.

 

Thanks transplants.

[smeagolsfree]

My guess is that the new building will replace the Storyville USA building that runs along Palmer. The core drilling markings are on the Cummins Station side of the building.

My Sunday walks are very detailed in nature and I pay close attention to the sidewalks and parking lots. These are very small thing to look for.

Look for another long delayed project to start before the end of the year too. Just one little thing I picked up from a sidewalk marking.

[dmillsphoto]

Echoing sentiments already expressed, but this is a huge loss for the music scene in Nashville. High Watt is one of the best sounding 300-capacity venues in the city, and the character of Cannery and Mercy cannot be matched elsewhere. It is akin to losing City Hall a decade ago. This is one of the few times where I'd much rather see the existing property stay exactly as is rather than any kind of redevelopment at all. Sad and disappointed.

[MLBrumby]

Is there any historical protection for the structure?  What is its history?  I get it that the music venue is a huge loss for live music downtown. I even went to a couple of shows thirty years ago.  It's a cool building.

[smeagolsfree]

Actually Zach Liff now owns all of this. He bought Thor out a while back out of the partnership from my understanding.

[MLBrumby]

1 minute ago, smeagolsfree said:

Actually Zach Liff now owns all of this. He bought Thor out a while back out of the partnership from my understanding.

So were the core drilling markings at one of the locations where Liff wants to build his multiple towers proposal?

[PaulChinetti]

https://www.nashvillescene.com/music/nashvillecream/cannery-row-venues-to-relocate/article_1ca217a2-21e6-11ec-b560-abe33e0cae16.html

Noooooooo.

Like the article says, that is going to be a hard one to replicate. This one hurts, hopefully they can find a new place and start replicating the magic somehow. 

Another place that I thought for sure owned their building but alas did not.

[smeagolsfree]

I know more of the story since my last post. I have heard those buildings are sort of back on the drawing board through one source. I know what is planned for the Cannery Row area somewhat, but I cannot say yet.

Nothing against you guys, but this is a story in progress. From what I understand we will be pleased! So RELAX.

[Rockatansky]

On 10/20/2019 at 4:41 PM, BnaBreaker said:

Thrilled to hear that the new owner highly values the existing businesses and the structure in which they reside!

Or maybe not given today's announcement. 

2 hours ago, Mr_Bond said:

I hope these operations can return to their historical locations after construction is complete.

That's not happening. The Mercy complex will  be relocating.

[Bos2Nash]

One thing that may need to be considered is the age and shape of these older buildings. If upgrades were to be made (typically beyond 50% of the square footage) they have to be brought up to current codes and if the building is has not been upgraded or maintained it gets too costly to keep. It does not take away from the loss of the venues, but it speaks to building owners who may not want to or are financially capable of making necessary maintenance/improvements.

 

[Luvemtall]

27 minutes ago, Bos2Nash said:

One thing that may need to be considered is the age and shape of these older buildings. If upgrades were to be made (typically beyond 50% of the square footage) they have to be brought up to current codes and if the building is has not been upgraded or maintained it gets too costly to keep. It does not take away from the loss of the venues, but it speaks to building owners who may not want to or are financially capable of making necessary maintenance/improvements.

 

This is a good possibility. My wife and I are investors with a realtor and we have done many abandoned and / or neglected properties and I know of three off the top of my head that Metro said that they needed more then 50 % the value. We were forced to tear them down by codes, within a short period of time or they would do it at our cost. 

[CandyAisles]

"Codes" is an easy scapegoat.  Nashville has a very productive "Rehab Committee" that allows for deviations from the current code based on existing facilities.  You do need to know to ask, though...and also prepare for negotiation.

[Luvemtall]

37 minutes ago, CandyAisles said:

"Codes" is an easy scapegoat.  Nashville has a very productive "Rehab Committee" that allows for deviations from the current code based on existing facilities.  You do need to know to ask, though...and also prepare for negotiation.

Thank you for this info, I will look into this for future reference. The people we work with now , probably have knowledge of this as they been working and rehabbing in Nashville for 30 + years. 

[markhollin]

Zach Liff says that the live venue spaces are going to remain in the historic 1883-era Cannery complex.

“We expect a number of exciting announcements about the Cannery over the next 12 months, and we are planning for the entire Cannery complex to be a place our community enjoys and where music lives and thrives,” Liff said.

DZL (Liff's company) in recent years has made “significant investments” at both Cummins Station and the nearby Baggage Building (located next to Union Station Hotel) “to ensure these 120-year-old structures have a healthy future to build on their rich past,” Liff said.

“The Cannery complex, including the music venue building, needs that care now so it can have the life it deserves looking forward,” he said. “As the long-term owner of historic properties next door, and as a native Nashvillian, I love the Cannery and I bought it when it was unexpectedly going to be sold to make sure it remains and thrives along with our other historic properties well into the future. I have spent my entire professional life with my office next door to the Cannery, and I am as excited about its future and the stewardship of its character as anything we are working on.”

More at The Nashville Post here:

https://www.nashvillepost.com/cannery-to-continue-offering-live-music-after-mercy-lounge-departs/article_7fe61ef8-2231-11ec-9409-d7b077f8604f.html?fbclid=IwAR18kXAdMIbmyeDJOGpdtQuAIa7qd6fxho0auTVv9DuUgnKETRuiColEFpg

[japan]

House of Blues?

[smeagolsfree]

I know a little more than I can say publicly and may be able to share tomorrow with WW’s permission. This goes back to the core drilling on site.