A high-profile corner in Chattanooga is seeing a lot of activity with a Nashville company buying a commercial complex and a convenience store chain purchasing a nearby tract for a new fuel center.
Excelsior Capital, a real estate private equity group in Nashville, paid $8.47 million for nearly 100,000 square feet in commercial space on Encompass Drive near the Highway 153 and Shallowford Road intersection, records show.
Also, convenience store chain Mapco has purchased a nearby parcel on Shallowford Road for $2.2 million where it plans to put up a new location.
William George, Excelsior's vice president of investments and asset management, said its purchase of the Friar's Crossing space is the firm's first foray into the Chattanooga market.
Avenger Logistics is one of the key tenants in the complex, which faces Highway 153 and is 92.5% occupied, he said.
"We'd love to buy more [in Chattanooga]," he said. "We're high on Chattanooga in general."
George said the site isn't traditional office space and has flexible uses such as a storage warehouse or light industrial.
"It can also be used as office and light retail in the front," he said. George said that Excelsior's research shows those types of buildings perform better in the current environment than traditional office space.
David DeVaney, president of NAI Charter Real Estate in Chattanooga, said the site includes a former auto dealership that has been renovated.
"It has great visibility," he said, citing the Highway 153 frontage. An array of car dealers operate in the area known as "auto row."
DeVaney, whose company brokered the deal with locally based Spirit Holding LLC, said Chattanooga's business climate, quality of life and strength of its real estate market is drawing more companies on a regional and national basis.
Meanwhile, the Shallowford Road tract was "pretty highly sought-after property," said broker Andrew Holt of Healy & Co. in Chattanooga. That site, too, formerly held an auto dealership.
"It had multiple offers," he said, noting other convenience store businesses were interested, he said. Mapco "threw their hat in the ring first," Holt said.
While Mapco has a heavy presence in the city, it's not in that part of Chattanooga, he said.
An existing building is undergoing demolition now to make way for the convenience store, Holt said. He said he believed the company plans to put truck diesel pumps in the rear of the site.
Just across Highway 153 at Shallowford, East Tennessee convenience store chain Weigel's is to build the first of about a half dozen planned locations in Chattanooga as that company enters the market.
After locating real estate over the past several years, the company is ready to build with the first store to go up at Highway 153 and Shallowford, said Chief Executive Bill Weigel earlier.
That 9.3-acre parcel, on the former Mountain View at Highway 153 dealership tract, will include a store along with diesel pumps for trucks in the rear, he said.
DeVaney said the commercial real estate market is recovering quicker from the coronavirus pandemic than many had expected.
"A year ago, there was so much unknown about the pandemic and how it would affect the commercial real estate sector, office and retail space," he said. "What we're seeing as we're gaining control of the pandemic, there's pent-up demand. Companies are starting to implement their growth patterns that they had put on hold for last 12 months."
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