Nashville-based guitar maker Gibson Brands Inc. confirmed Friday, Oct. 20, it is putting its Downtown Memphis factory on the market and plans to build and lease a new facility nearby.

Gibson Brands Inc. confirmed it will sell its Memphis guitar factory in the heart of Downtown Memphis and build a new facility for its manufacturing operation here. (Daily News/Houston Cofield)

The Gibson Beale Street Showcase and Guitar Factory opened more than 16 years ago at 145 Lt. George W. Lee Ave., across South B.B. King Boulevard from FedExForum.

The 127,000-square-foot building includes production facilities, administrative offices and a large entertainment venue.

CBRE Memphis is marketing the property for $17 million.

“We continue to love the Memphis community and hope to be a key contributor to its future when we move nearby to a more appropriate location for our manufacturing-based business, allowing the world the benefit of our great American craftsmen,” Gibson Brands Inc. CEO Henry Juszkiewicz said.

Its Memphis division “is growing and achieving record profitability and sales levels,” the company said.

A new facility, the statement continues, would allow Gibson to improve product quality, increase production capacity and potentially increase local employment.

Gibson is seeking a buyer that will allow it to continue to operate in the current factory on George W. Lee Avenue while the new facility is under construction, according to the announcement.

Downtown Memphis Commission interim president Jennifer Oswalt said that while no one has contacted her office about a project yet, she believes that property won’t stay on the market for long.

“We’d just like to see a mixed-use project that adds vibrancy,” she said. “Both the hotel market and the apartment market are still very hot. “(The apartments) are leasing as fast as they are built, and the occupancy rates at the hotels are great, too.”

In terms of apartments, Oswalt cited Fielder’s Square and the Pressbox Lofts, which overlook AutoZone Park, as examples of how a multifamily development might fare in that location.

“It’s such a prime location that it will be very popular for both apartment and hotel developers,” she said. “We need another hotel near Beale, so it would be a good option for that, too.”

The Westin Memphis Beale Street hotel is located directly north of the Gibson site.

And on the topic of hotels, Oswalt said the Gibson news may even reopen the convention center hotel debate.

“Although what we have heard from most of the hotel developers is that to be really successful as a convention center hotel, you would need to be a lot closer than that,” she said. “However, there’s also the need to fill your hotel when there is no convention, which would easily be accommodated by Beale Street and the tourism that happens on that end of Downtown.”

Oswalt added that there is a lot of surface parking to the south of the Gibson factory, and if someone were to acquire that as well, it could become an opportunity for an even larger-scale project.

“Should we make it to the next round with Amazon (second U.S. headquarters), it would certainly change that discussion a little more,” she concluded. “While all of those parking lots were in the phase two option, it could be phase one now that this is available.”

Founded in 1894, Gibson produces musical instruments, consumer electronics and professional audio equipment. Along with the Memphis factory, it has production facilities in Nashville and in Bozeman, Montana.

Daily News staff members contributed to this article.