The office market in Chattanooga has experienced significant change in the past year. The most dramatic change will take place in the summer of 2009 when BlueCross BlueShield of Tennessee has completed their 950,000SF office campus on Cameron Hill. This $300 million complex is believed to be the largest in East Tennessee. Cameron Hill is on the periphery of downtown. They originally planned on vacating three buildings they own totaling 387,662SF and further vacating the three buildings they lease totaling 185,000SF. All six buildings are in the Financial District. However, in December 2008, BlueCross BlueShield announced that they will remain on the upper floors of the Miller Brothers Building. This will result in BlueCross retaining 110,000SF of downtown office space, keeping approximately 500 employees in the CBD. There is anticipation concerning the absorption of the other buildings, however activity and interest has been strong from both users and developers.
Further, Tennessee Valley Authority announced that it will purchase its 1.1 million SF office complex in 2011 for $22 million or $20psf. There was a possible concern that TVA would vacate the property and move out of the Central Business District, opening up over 1.1 million SF of office space and relocating over 3,000 employees. The decision to purchase is good news for the city.
Contributed by David DeVaney, NAI Charter Commercial Real Estate Services, Chattanooga, TN
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