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KBS Sells Nashville-Area Office Building

Boyle Investment Co. is expanding its presence in Nashville’s Cool Springs submarket with the acquisition of The McEwen Building, a 175,000-square-foot Class A office building from KBS for $48.8 million.

KBS Real Estate Investment Trust III purchased the mixed-use building at 1550 W. McEwen Drive in Franklin, Tenn., in May 2012 for $40 million, according to CommercialEdge data. KBS, one of the nation’s largest commercial real estate investors, was founded in 1992. Along with its affiliated companies, the firm has completed more than $44.9 billion of transactions on behalf of private and institutional investors globally.

Since the pandemic, KBS had signed 112,000 square feet of new and renewal leases at the Cool Springs property. The asset had a 95 percent occupancy rate at the time of the sale, with 15 businesses and retail and restaurant tenants.


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Marc DeLuca, KBS CEO and eastern regional president, said in a prepared statement KBS identified an opportunity to capitalize on a high-performing property to achieve additional liquidity in the current debt environment. He said the REIT’s ability to bring the building to nearly 100 percent occupancy, particularly in the challenging office leasing and investment climate, is a testament to solid asset management expertise, the strength of the core office assets and the strength of the Nashville market. DeLuca added the building traded at a 5 percent discount from its 2022 valuation.

Like many owners of U.S. office properties, the California-based REIT has been struggling to meet its debt obligations as office property values drop. KBS REIT III stated in a December filing with the U.S. Securities and Exchange Commission that it was facing $1.7 billion in loan maturities in 2024 and its debt load on the 16 properties it owned at the time could affect its solvency.

The REIT had previously received a two-year extension on a loan that included The McEwen Building and three other properties, according to Bisnow. CommercialEdge reports the REIT had a $9.3 million bridge loan for The McEwen Building that was originated in January 2020 by U.S. Bank and matured in March 2023. More recently, the REIT was granted a fourth extension on a $613 million loan covering a six-property office portfolio of more than 3 million square feet after agreeing to raise $100 million by July 15, Bisnow reported. Those properties are located in the Dallas-Fort Worth metro, the Bay Area and Minneapolis.

The McEwen building up close

The seven-story building in Franklin has 577 parking spaces and 28,000 square feet of retail space on the ground floor, including Brixx Wood Fired Pizza + Craft Bar, Title Boxing Club and Massage Luxe. Kaiser Aluminum has its world headquarters on the top floor of the office building. Built in 2009, the LEED-registered and Energy Star-Gold rated building recently underwent more than $2.1 million in capital improvements.

Situated on 11 acres in the McEwen Southside development, The McEwen Building provides tenants with direct access to more than 30 restaurants, 70 retailers, eight hotels and seven fitness studios. Many of those offerings are within a 3-minute walk of the property. Completed in 2014, McEwen Southside has a mix of upscale residential units, Whole Foods and several retail and dining options, including PureBarre, Lululemon and BrickTops, all centered around The McEwen Building.

The property is also situated directly across West McEwen Drive from the Boyle-managed McEwen Northside, a 45-acre mixed-use development that has positioned itself as one of the area’s top destinations. During the first two months of 2023, Boyle completed a mixed-use building in the master-planned McEwen Northside community that had 126,000 square feet of office and 15,000 square feet of retail and restaurant space.

Boyle Nashville owns and manages almost 4 million square feet of office and retail space, as well as a projected 5 million square feet in the development and planning stages. In addition to McEwen Northside, other projects include Berry Farms, Meridian Cool Springs, CityPark Brentwood and Capitol View.

Jeff Haynes, a Boyle Nashville partner, said in a prepared statement the purchase of The McEwen Building helps the firm further its vision of creating a unique district in Cool Springs that began with McEwen Northside. He said the firm’s goal has always been to stitch together great pieces in a highly walkable area and create an atmosphere that benefits tenants and the community.

Transaction team

Samir Idris, David Meline and Crews Johnston of Cushman & Wakefield represented KBS in the sales transaction.

Greenberg Traurig represented KBS as legal counsel in the disposition. Bruce Fischer, co-chair of West Coast Real Estate and co-managing shareholder of the Orange County, Calif., office for Greenberg Traurig, led the team. He was assisted by Howard Chu, attorney and shareholder with the firm, and Amanda Kennedy, a paralegal.

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