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Vacant:
Vacant tenant spaces in Farragut number more than 100. But why? Part one of a two-part series


Vacant buildings in Farragut have been a point of discussion among Town leaders, elected officials and even farragutpress presstalk callers for months.

Upon closer inspection, the reason is clear: the sheer number of vacant spaces in Town limits.

Around Town, there are, at a conservative estimate, 126 vacant properties, in the form of entire buildings or tenant spaces within buildings.

Most of those properties advertise being for sale or lease.

Some of them are new to the market; others have been vacant for years.

Highly visible vacant properties — such as former restaurants Silver Spoon and Edison Park and the former Kroger, Food City and Ingles supermarkets — tend to attract a lot of attention from Farragut residents and business owners.

But what about the 30,000 square foot warehouse located just east of West End Avenue off Kingston Pike?

The building, a former millworks, sits on more than five acres and has been vacant for years.


It sits largely forgotten beside a sale sign proclaiming it has a “motivated seller.”

The realtor of that property, Jerry Headrick of Rocky Top Realty, made no bones about why that building still was vacant.

“Nobody likes dealing with Farragut. Nobody. Because of the rules that they have,” Headrick said.

“As far as we are concerned, Farragut is not business friendly,” he added. According to Headrick, Town staff told him the building’s “grandfather” clause no longer is applicable.

In other words, the building must be brought up to current Farragut codes because it’s been vacant so long.

“I’m standing there on the property, and I’m looking up the highway, and I see four more ‘for sale’ signs from the place I’m standing on. There’s a tremendous amount of vacancies,” Headrick added.

Indeed, Kingston Pike racks up the highest number of vacant properties in Town: 80 from Farragut limits at Dixie Lee Junction to the last business inside Farragut’s borders going east, toward Lovell Road.

It’s no surprise that some believe this glut of spaces is due to the rapid development and popularity of Turkey Creek.

But what may be a surprise is the amount of vacant spaces along Parkside Drive in Farragut limits: 23, not including undeveloped land and unfinished buildings.

Also surprisingly, the economy did not rank high on most realtors’ lists of reasons for the high number of vacant spaces.

“There is a lot of space available in Farragut. It’s cyclical, and right now there’s just a bulk of inventory on the market,” said Joyce Anderson, who is marketing a space in Concord Square with Coldwell Banker Wallace & Wallace.

“There’s a lot on the market, and I’m not sure if I would say that it’s just because the inventory is so high, or it’s the economy. I would dare to say it’s a combination.

“There’s been so much built, and so much inventory right now, and just not enough people to fill it up,” Anderson said.

“There’s not been a lot of businesses come in to absorb that office space,” she added.

According to Anderson, watching vacancies in the commercial real estate market is like moving pieces on a chessboard.

A castle can move to a better spot, but without a knight or bishop to take its place, its former spot just stands empty.

“So some of the companies that have moved to nicer and newer spaces, nobody’s coming in behind them and leasing where they left,” Anderson said.

On the positive side, she added, the glut of vacant spaces makes Farrragut a “leaser’s market.”

Among shopping centers, Concord Square ranks relatively low on its number of vacancies, with two apparent empty spaces.

West End has the highest number of vacancies, with 12.

By comparison, relatively new development Renaissance | Farragut has six. Village Green, one of the oldest developments in Town, has only one. The new strip mall off Brooklawn Street, just finished earlier this year, has nine vacancies. Essex Pointe has four.

While most of Farragut’s vacancies are along the older Kingston Pike corridor, one can’t ignore the surprising number along Parkside Drive.

And if the economy isn’t entirely to blame for a high vacancy rate in a new, popular and still-developing retail environment, what is?

According to several realtors, it could be rent.

Rates per square foot in Turkey Creek are more expensive than many places off Kingston Pike, reportedly running at or above $25 per square foot.

“Not all businesses can afford Turkey Creek prices; and to generate the kind of business that they would have to generate to make those expensive rents, some businesses just can’t go there,” Anderson said.

“The office space over there is high profile space, and it’s very expensive … of course, it’s brand new,” she added.

Headrick agreed: “Turkey Creek is the best thing that ever happened to Farragut. But Turkey Creek’s rates are pretty high and people are looking for alternatives to the higher prices.”

Could the Kingston Pike corridor be marketed as just that alternative?

Perhaps.

One “for lease” sign at Century Plaza advertised its rates as $11 per square foot.

Anderson said the difference in square footage rates could be due to the price at which building owners or developers bought their properties.

“The person who developed it paid too much money for the land, and they’ve got to get a certain amount out of their leases, so their rate per square foot is higher than market.

“And they’re not really in a position to negotiate those. … Their hands are virtually tied,” she said.

Could vacancies be considered an opportunity, and how should Farragut market its vacant spaces?

Those questions will be asked in part two of this farragutpress business series.

The vacancy figures were compiled after a physical inventory of vacant properties only in Town limits and are not intended to be an exhaustive count.

The numbers do include empty spaces for rent or lease, even in partially occupied buildings.

The figures do not include undeveloped or vacant lots or unfinished buildings, do not differentiate between vacant commercial and office space, and do not include buildings that may be for sale but are not vacant.

The numbers were compiled during the week of March 8, and while steps were taken to contact building owners, developers or realtors, the figures may not show if a building or space has been bought or leased.

 

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