VUMC expansion could render 21st Ave. properties more valuable

Monday, November 5, 2007 at 2:08am

Vanderbilt University Medical Center is preparing to expand it children’s hospital.

However, VUMC is not likely to target the acquisition of adjacent properties — including those home to a Mapco and a Kentucky Fried Chicken — as part of that growth.

Dr. Wright Pinson, VUMC associate vice chancellor for clinical affairs and chief medical officer, said the KFC and Mapco properties, located at 1501 and 1507 21st avenues south, respectively, are “attractive pieces of property.”

“But I don’t think it will be necessary [to acquire them] for the expansion [to be fully successful],” adds Pinson, who is overseeing the expansion effort.

Recently, VUMC announced the eight-story addition to the Monroe J. Carell Jr. Children’s Hospital, which when finished (likely in 2012 at the earliest) will see its eastern wall tower over the back portion of the buildings housing the chicken eatery and gas station. The new building will replace the existing Dayani Center, slated to move to VUMC’s 100 Oaks campus.

With the Vanderbilt announcement, the land on which KFC and Mapco sits potentially becomes more valuable — and eventually desirable to VUMC — according to Nashville-based commercial real estate officials.

“I could see the KFC property commanding $90 per square foot, which would be just under $2 million for a half acre,”

said Bruce Reed, senior vice president and office tenant representative for Chas. Hawkins Co./CORFAC International.

Tim Stowell, president of West End Avenue-based Corporate Real Estate Advisors, agreed, adding that the smallish lot sizes (both the KFC and Mapco properties sit on about a half acre each) would require, if to be redeveloped, “vertical construction.”

VUMC, which owns .22 acres of land used for surface parking and sandwiched between the Mapco and KFC lots, has shown a willingness to construct buildings of five or more stories.

“If you’re to pay that much for a property, you have to go vertical,” Stowell said. “Vanderbilt has the best chance to justify the price with a larger project that could be put together on the adjoining land.”

Efforts to contact the Chicago-base Askounis family, owners of the KFC property, failed. Mapco officials declined to comment.

The segment of 21st Avenue between Blakemore and Pierce avenues is also home to two other non-VUMC properties, from which SunTrust and Sportsman’s Grille operate.

Neither W.L. Bashford nor Bonnie R. Bashford, the owners of the Sportsman’s property, nor SunTrust officials could be reached for comment.

Vanderbilt owns the 1.04-acre lot, once the site of a Hill grocery store, on the northwest corner of the 21st/Blakemore intersection, paying about $1.5 million for it in 1990.

VUMC’s Pinson said Vanderbilt officials have talked to the owners of the four properties “in times past and periodically check in at times to see if they are interested” in possibly selling.

“We have not found them eager to sell, but I don’t think we have focused on those four at this time,” Pinson added.

Reed said the KFC and Mapco properties have emerged as potentially more attractive with Vanderbilt’s recent completion of a second pedestrian walkway spanning 21st and connecting the Peabody campus to an under-construction parking garage on the northwest corner of the intersection.

“Certainly, a Vanderbilt use would probably be the highest and best use for those properties,” Reed said. “However, there are several companies that do work with Vanderbilt that could easily justify the rental rates or sales price that those properties would command. I could also see upscale retail, as well as office, for the sites. There certainly would be a great demand for office space.”

A development similar to the Vanderbilt University-owned Villages at Vanderbilt (which, hypothetically, could include the KFC yet, not realistically, the Mapco) could be an option, Stowell said.

Stowell said Mapco likely will not want to sell, and there would have to be leverage on Vanderbilt’s part to finalize a transaction.

“Mapco might say, ‘We would like to be a good citizen of the community, so find us a site near here,’” he said.

Richard Exton, president of Manier and Exton Real Estate Appraisers, said property in the general West End corridor commands between $60 and $70 per foot.

If Vanderbilt wants to extend its holding to those four parcels on 21st, top dollar might be required, he said.

“When you do a land assemblage, the last piece is typically the most expensive,” Exton noted. “To Vanderbilt, [$90 per foot] might be worth that. To another developer, it might not be worth it.”

Filed under: City Business