Indianapolis developer buys Third and Peabody site for $4 million, plans 175 rooms, restaurant and retail space
March 30, 2017 | Getahn Ward | Tennessean
An Indianapolis-based developer has paid $4 million for a 0.56-acre site in the area south of Broadway with plans for a mixed-use project that's expected to include a roughly 175-room upscale boutique hotel.
Sun Development & Management Corp. is targeting a fall groundbreaking for the yet-to-be-named independent hotel.
Planned for the southwest corner of Third Avenue South and Peabody Street, it will be the first hotel in Nashville belonging to the Tapestry Collection by Hilton. The overall mixed-use project will also include restaurant and retail space.
"We're very excited to launch this new brand in Nashville," said Suraj Patel, president of the Sun Group of Companies. "The hotel is very design-centric and will appeal to artists, creatives, tourists and business travelers alike."
Sun Development & Management is no stranger Nashville's hospitality market. The hotel developer's portfolio includes downtown Nashville's 117-room Homewood Suites hotel at 706 Church St.
The price that Sun Development & Management paid for the property at 501 Third Ave. S. equates to $164 a square foot. Davis Management Inc. was the seller of the location, which includes a 13,700-square-foot warehouse that once housed heating equipment supplier Johnstone Supply.
Earlier this year, McLean, Virginia-based hospitality company Hilton identified Nashville among cities targeted for debut of its Tapestry collection of upscale independent hotels.
Currently, 32 hotel projects with 4,844 rooms are under construction around Nashville, reflecting how strong local growth in key lodging industry performance measures is attracting developers here.
The numbers come from Hendersonville-based industry tracker STR, whose data shows another 32 projects with 3,644 rooms in final planning that could start within four months. An additional 45 projects with 5,355 rooms are in even earlier planning stages.
For February, Nashville's average daily hotel room rate rose 6.3 percent year-over-year to $132.09, according to STR. The average revenue per day from each available hotel room increased 6.2 percent to $92.30, while average occupancy remained generally flat year-over-year at 69.9 percent.
Broker Andrew Maxwell of OakPoint Real Estate represented Sun Development & Management in buying 501 Third Ave. S. Lance Bloom, a senior associate with CBRE in Nashville, represented seller Davis Management.
"This sale further cements SoBro as the number one submarket for hotel development in Nashville," Bloom said. "The proximity to the hospitality demand drivers of Lower Broadway, the Country Music Hall of Fame and the convention center is unmatched."