Nashville Business Journal

Revamped investor snags sky-high office space above hotel

Revamped investor snags sky-high office space above hotel

Two Nashville real estate companies have swapped ownership of what’s basically an office building perched at the top of downtown’s second-largest hotel.

New public records show that OakPoint Real Estate paid $21.05 million for the six floors of office space above the Renaissance Nashville Hotel. The space, dubbed CitySpace, covers floors 26 through 31 of the hotel building at 611 Commerce St.

This is the first purchase OakPoint has closed since company founders revealed last month that they are selling the brokerage part of their business to Orlando-based Foundry Commercial, and refocusing on what sparked OakPoint’s creation six years ago — buying and upgrading office buildings.

To help complete the deal, OakPoint tapped some of the $50 million of new funds that an investor group with local and Texas-based members is funneling through OakPoint to invest in Nashville and Austin. In a federal regulatory filing, an OakPoint entity named after CitySpace’s address reported raising $9.2 million from 72 investors.

“It can cater to everybody, not just the 50,000-square-foot tenant that would typically take upper floors like this,” said Justin Albright, a founding principal of OakPoint. “We’ve had our eye on this for really several years. The views are just absolutely phenomenal up there. There’s no real availability of this kind of space in other downtown assets, and when there is, it usually goes at a steep premium compared to the rest of the building.”

OakPoint bought CitySpace from Elmington Capital Group, which had owned the space since 2014 and invested in upgrades. Today, 90 percent of the 100,000 square feet of office space is leased. OakPoint paid roughly double what Elmington Capital paid for the space four years ago.

Albright said current and future tenants will benefit from the office space’s atypical location because of the features the hotel offers. The owners of the Renaissance are investing millions of dollars in upgrades, including a forthcoming restaurant (seen in the gallery below). The ballroom level of the hotel will be connected to the adjacent Fifth + Broadway development, where announced tenants so far include H&M, Shake Shack and a massive food hall.

Separately, Albright noted that OakPoint has a contract to develop a 170,000-square-foot office building in Austin. Since Albright and business partner James Granbery opened OakPoint in late 2011, they have acquired $425 million of real estate, combining $120 million of investor funds with loans.

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