VOL. 133 | NO. 152 | Thursday, August 2, 2018
Commercial Appeal Looking at New Spot Downtown
By Patrick Lantrip
The Commercial Appeal building was a nexus of local news coverage for Memphis and the Mid-South for nearly a half-century, but The CA won’t be operating out of its 495 Union Ave. location for the first time since the Ford Administration.
Memphis Publishing Co., The CA’s parent company, has agreed to take 17,000 square feet in the Toyota Center, according to multiple sources with knowledge of the deal.
The Commercial Appeal will be taking over Sullivan Branding’s lease on the first floor of the Downtown office building, as the local advertising firm is in the process of right-sizing its staff.
For nearly a half-century, The Commercial Appeal building was a nexus of local news coverage for Memphis and the Mid-South, but for the first time since the Ford Administration, The CA won’t be operating out of its 495 Union Ave. location. (Daily News File)
Meanwhile, The CA’s long-time Medical District office building is under new ownership and is facing an uncertain future.
The beginning of the end for The CA’s tenure at 495 Union came Feb. 13, 2017, when the Gannett-owned publication announced it would be outsourcing its printing operations to a sister publication in Jackson, Tennessee.
This move resulted in the elimination of 19 full-time jobs at The Commercial Appeal facility, which was built to house two newspapers before the afternoon daily, The Press Scimitar, went out of business in 1983.
In June 2017 CA president Mike Jung told employees that Gannett would be putting the 275,958-square-foot building and its adjacent parking lot on the market.
At that time Jung told The Daily News that he was looking forward to moving into a new, modern building that reflects their “digital-forward environment and organization.” As for where they planned to look to, Jung said the only certainty was that they would remain within the city.
“We are a Memphis-based organization, and we will remain in Memphis,” he said.
The company then tapped commercial real estate brokerage firm CBRE to handle both the sale and the move.
In April 2018, Memphis Publishing Co. sold the 495 Union building to Twenty Lakes Holdings, doing business as 495 Union Avenue LLC, according to a warranty deed filed with the Shelby County Register of Deeds.
The week prior, the same New York firm also bought the five-acre parking lot behind the paper’s building for $1 million, this time doing business as 597 Beale Street LLC.
Also around that time, Twenty Lakes acquired several other properties from Gannett, including the buildings housing the Courier & Press in Evansville, Indiana; the Patriot-News in Harrisburg, Pennsylvania; the Now Media Group in Waukesha, Wisconsin; and the Ventura County Star in Camarillo, California.
According to their website, Twenty Lakes’ portfolio includes more than 180 properties encompassing 2.3 million square feet in 29 different states and specializes in acquiring underperforming and underutilized locations from legacy newspapers.
Since buying the building, the new owners of 495 Union Ave. have tapped Colliers International to oversee the redevelopment of the 6.5-acre site.
Meanwhile, The Commercial Appeal’s move Downtown echoes similar patterns in the city’s office market, as more and more users are flocking back to the city’s core. Orion Federal Credit Union, Wunderlich Securities and SouthernSun Asset Management are just a few of the big names that are in the process of relocating Downtown.
While the East Class A office market continues to be the “it” submarket, with rental rates that push or exceed $30 per square foot, Downtown has been making serious strides to close the gap.
However, bringing new office product online in Downtown can be tricky because of the existing office rental rates in the submarket versus the implied rents from new construction.
The only large-scale development currently in works for Downtown is the 250,000- to 400,000-square-foot Class A tower planned as part of the One Beale development, which will break ground this coming January.