Somera Road Inc. will open a second headquarters in mid-July in Nashville, a move that comes as the New York-based commercial real estate firm continues to gain a presence throughout Music City
A release does note the location of the future office.
Somera Road’s primary headquarters will remain in New York City. However, two key senior team members of the company — Jonathon Reeser, vice president of acquisitions and Joe LeMense, vice president of construction — will relocate to Nashville to co-head the office. The two will soon be hiring additional employees to bolster the local presence.
Somera Road’s Nashville portfolio includes the Voorhees/Downtown Antique Mall site on Eighth Avenue South in The Gulch (read here), WeHo Crossing (read here) in Wedgewood-Houston, 501 Great Circle Road in MetroCenter (home to Nashville-based JumpCrew; read here) and PINS Mechanical Co. in the North Gulch. The company plans to soon announce future projects for Wedgewood-Houston, Germantown and East Nashville.
“Nashville is a perfect second headquarters as we continue to grow our foothold and development pipeline in [the city],” Ian Ross, Somera Road managing principal, said in the release. “Nashville’s proximity to other focal markets with active projects such as Memphis, Louisville, Kansas City and Indianapolis is an added perk.
“The markets we invest in offer an unparalleled value proposition to both employees and employers, offering a lower cost of living and a higher quality of life in forward-thinking, hyper-connected live-work-play environments,” Ross (pictured) added. “Nashville was a natural choice for our HQ2, as it simply reinforces our firm’s primary investment thesis over the past five years.”
Somera Road garnered headlines in mid-March when it announced it had offered a $17 million property purchase and leaseback package as an alternative to the Watkins College of Art and Belmont University merger announced in late January (read here). That effort did not materialize.
The announcement of the future Nashville co-headquarters follows Somera Road’s launch of a division focused on ground-up development. Andrew Donchez, formerly with Boca Raton, Florida-based Mill Creek Residential, will oversee the division as vice president, head of development. Donchez is expected to spend some time in Nashville given Somera Road’s multiple projects in the city.
A real estate developer from New York is so smitten with Nashville that it’s opening a permanent office in mid-July — and tipping its hand about where its next projects will occur.
Somera Road Inc. announced that three employees will move from New York to Nashville, to elevate what had been a part-time office into a full-time operation. Two of those three transplants will jointly lead the Nashville office: Joe LeMense, the company’s vice president of construction, and Jonathon Reeser, vice president of acquisitions. Somera Road will look to hire three additional employees in Nashville, for what it’s dubbing a “second headquarters.”
Somera Road illustrates how quickly so many out-of-state developers have become smitten with the city’s growth, prospects and vibe. Somera Road joins a growing group going as far as opening an office in the city.
Somera Road sealed its debut investment less than three years ago, buying a former Gibson Guitar warehouse in the Gulch. Today, it’s home to two entertainment concepts, Pins Mechanical Co. and 16-Bit Bar+Arcade. Somera Road’s other developments include revitalizing an industrial building in Wedgewood-Houston, spending $18 million to buy an office building in MetroCenter, and paying $30 million at the end of 2019 for 2.6 acres of land near the Gulch on Eighth Avenue South, including the Voorhees Building.
Ian Ross, founder and managing principal of Somera Road, said Nashville sits in the “pole position” of all the markets the company invests in (referring to the most favorable spot to begin a car race).
“Nashville’s proximity to other focal markets with active projects, such as Memphis, Louisville, Kansas City and Indianapolis, is an added perk,” Ross said in a statement. “These cities allow for increased productivity, improved retention and a happier and more fulfilled workforce – allowing people to embrace some of the American Dream elements that have become out of reach in high-cost gateway cities.”
Somera Road said new projects will “be announced shortly across Wedgewood-Houston, Germantown and East Nashville.”
“In addition to being a thriving city with a diversified employment base, Nashville’s location is ideal for us as we continue to expand our platform, located within a two-hour drive or flight to the majority of our portfolio,” Ross said. “And most importantly, our team and our families have fallen in love with the city.”
The Somera Road team is excited to welcome Andrew Donchez to our ranks. Andrew will serve as Vice President of Development, overseeing all aspects of Somera Road’s ground up multi-family & mixed-use development platform. Andrew will lead the acquisition, underwriting, design, entitlement, construction and operations of ground up development projects for Somera Road.
Prior to joining Somera Road, Andrew worked for Mill Creek Residential Trust, where he served as VP of Development, overseeing all development activities in the Northeast. At Mill Creek, he was involved in and led the development of a diverse pipeline of development projects, totaling over 1,400 residential units and exceeding $600MM of total development value throughout New Jersey and New York.
Andrew brings over 15 years of experience developing ground up, residential, commercial and mixed-use projects. Prior to joining Mill Creek, Andrew was a Development Executive for RXR Realty where he helped build the residential development platform and oversaw the development of 1,453 residential multifamily apartments with total development values of over $700 million. Andrew helped lead the team that reshaped the downtowns of suburban Westchester County, New York through innovative transit-oriented projects and a pioneering public/private partnership with the City of New Rochelle. The innovative Master Development partnership entitled over 10 million square feet of by-right development potential and secured the acquisition of parcels entitled for over 4 million square feet of development potential.
Prior to his tenure at RXR, Andrew was a Senior Project Manager for Toll Brothers, Inc. in Westchester, New York and began his career as a Development Associate at Ashley Development in the Lehigh Valley, Pennsylvania.
Somera Road is also excited to announce the hiring of Sam Schifman as an Associate supportingAcquisitions and Asset Management. Sam joins Somera Road from Equus Capital Partners where he most recently supported the asset management and disposition of their suburban office product.
Please join us in welcoming Andrew and Sam to the Somera Road team.
In a powerful one-two punch for Downtown, developers on Tuesday announced an eight-story, 250,000-square-foot office tower with a 250-room full-service hotel will rise next to where FedEx Logistics is moving its global headquarters into the Gibson Guitar building.
Called The Clipper, the new, $250 million office tower/hotel will include 50,000 square feet of ground-floor space for potential restaurants and retailers, multi-level parking and public green spaces.
The hotel will feature “best-in-class” food, a rooftop deck and conference center. Senate Hospitality, which owns the nearby Westin Beale Street, will be a partner.
The same landlords who own the Gibson Guitar building own the property where The Clipper will rise: New York-based real estate investment firm Somera Road Inc., its affiliate Somera Gibson Holdings, and local partner Orgel Family LP.
The Clipper will be built on what is now a 385-space, surface parking lots at 0 Pontotoc, immediately south of where Gibson Guitar is.
“A strong Downtown Memphis is critical, and we wanted to be a part of its momentum,” Ian Ross, managing director of Somera Road, said in a release. “We are thrilled to welcome the FedEx family to the Gibson building…”
The Clipper is a FedEx reference, to company founder Frederick W. Smith’s analogy that FedEx is the clipper ship of the computer age. A sculpture of a clipper ship will be placed prominently as part of the FedEx Logistics development.
Richard W. Smith, president and chief executive of FedEx Logistics, said in a prepared statement, “I am thrilled about this development project, which along with the FedEx Logistics headquarters at the former Gibson Guitar Factory building, will unlock massive opportunity for our business community and transform this southwest area of downtown Memphis into a thriving campus for our growing company.
“This is an ideal location for a global business like ours, which will benefit tremendously from the talent we will be able to attract to downtown Memphis,” he said.
“The Clipper represents the cutting edge of a live/work/play environment,” project partner Benjamin Orgel said in the release. “This is the next wave of energy that Memphis’ residents, employees and visitors need.”
Downtown Memphis Commission president and chief executive Jennifer Oswalt said new development and density are exciting and “replacing surface parking lots with mixed-use development aligns well with the mission of the DMC.”
“Having two projects of this magnitude happening across the street from each other along with everything else happening downtown — St. Jude, Union Row, the Riverfront — shows the strength of our momentum,” Mayor Jim Strickland said in the release. “I said during my State of the City address that we’re going to ‘build up, not out,’ and this project is a prime example of that.”
Ross said developers weren’t ready to discuss yet what public incentives they’ll be seeking from the Downtown Memphis Commission and its affiliates, although he said, “A project of this magnitude won’t work without public support and public incentives. With regards to specifics, we’re really not there yet, and we’re still kind of compiling our research and our work.”
Ross said there would be a public parking component, but The Clipper and FedEx Logistics wouldn’t be totally dependent on parking built on The Clipper site. He said arrangements have been worked out to use other parking facilities, such as at the FedExForum and the Lee’s Landing garage. The facilities have heavy night-time demand but spaces available during the day.
The Clipper project will include approximately three parking spaces per 1,000 square feet, he said. The total spaces in the project is still to be determined, Ross said.
Cushman & Wakefield/Commercial Advisors will manage commercial leasing services of The Clipper.
Ross said other contractor/professional service providers would be ESa (Earl Swensson Associates Inc.) of Nashville, architects on office tower; Danny Bounds of Bounds & Gillespie Architects of Memphis on the hotel; Kansas City contractor J.E. Dunn, contractor on The Clipper; and Kimley-Horn, engineers.
All information on The Clipper, including 3-D renderings and videos, can be found at clippermemphis.com.
Developers who announced big new plans for Downtown Memphis on Tuesday, Feb. 12, said their bottom line is a stronger live-work-play environment in the center city.
Somera Road Inc. of New York and Orgel Family LP of Memphis are at the center of a new FedEx Logistics headquarters in the Gibson Guitar building and an adjoining, $250 million office tower, hotel and retail center across the street at B.B. King and Dr. Martin Luther King Jr. boulevards.
The FedEx Logistics headquarters will repurpose the guitar factory and bring as many as 700 new workers Downtown, while a mixed-use project dubbed The Clipper will meet needs for new Class A office space, a full-service hotel, restaurants and perhaps a grocery store, said Somera Road founder and principal Ian Ross.
Ross, along with Benjamin Orgel, a partner with his father, Billy Orgel, in Orgel Family LP, spoke with The Daily Memphian about the FedEx project, announced Tuesday morning, and The Clipper, announced two hours later.
And giving a preview of coming attractions, Ross said Somera Road is working with its local partners on a future project on the north end of Downtown, the former Conwood Co. property dubbed the Snuff District.
The Clipper, planned for Gibson’s surface parking lot, would include 200,000 square feet of office space on top of 50,000 square feet of ground-floor retail, and a 250-room hotel of a brand not yet disclosed, plus parking levels with a public parking component.
The Clipper is a FedEx reference, to company founder Frederick W. Smith’s observation that FedEx is the clipper ship of the computer age. A statue of a clipper ship will be placed prominently as part of the FedEx Logistics development.
A transcript of the conversation, edited for clarity and brevity, follows:
Ross: We’re really excited about what we’re going to do over at The Clipper. We think the market needs a modern, Class A, creative office building that speaks to the needs of office users today, and when we looked around the Memphis market, we certainly believed there was a dearth of Class A space for both companies within Memphis and companies outside of Memphis that are looking at the market.
So we’re excited about building that office building, about putting it right in the epicenter of Downtown, right across from FedEx Logistics headquarters, a block from Beale Street, a block from the FedExForum. It’s really going to enliven that area and create that live-work-play environment connecting to South Main and the residences there, connecting north to Downtown, just really a tremendous location for that.
We’re also excited about the retail we’re going to put in there. It’s about 50,000 square feet of retail, fast-casual restaurant, full-service restaurant, convenience, potentially grocery. We’re really excited about stuff that fits into that live-work-play mix.
And when we start looking at the hotel market, there’s obviously been a plethora of limited-service boxes coming up, and I say boxes because I mean boxes, there hasn’t really been high-quality, full-service products built in Memphis since the Westin was built. It’s a tremendous hotel that’s doing very well and we got to know the Senate Hospitality team early on in our work here and in Nashville, and they explained to us why they do so well and what their faults are.
They realize they need more conferencing space, so we’ll be building a best-in-class hotel that’s full-service, with food and beverage outlets, with pool, rooftop bar, and with tremendous conferencing facilities for corporate users and conference users. Senate knows exactly what’s needed. They’ve had a ton of success here at the Westin, and we’ll be looking to build on that with the delivery of our hotel on that site.
The Daily Memphian: Will the new hotel represent competition for The Westin?
Ross: They view it and we view it as additive.
TDM: What will be the phasing of construction?
Ross: The entire site will be developed simultaneously. It will happen from a sequencing perspective, the work there (The Clipper) will be going on at the same time as the former Gibson building. The FedEx Logistics/Gibson building will deliver first, and The Clipper project should follow probably 12 months behind.
TDM: Will FedEx Logistics use The Clipper as an expansion area to handle future growth?
Ross: I think it’s certainly a possibility. We spent a lot of time with the state of Tennessee, with the Department of Economic and Community Development and the Downtown Memphis Commission and the (Greater Memphis) chamber and Mayor Strickland and his team.
I think it’s very clear Memphis needs Class A office space for a few reasons. To attract companies from the suburbs that want to take part in the live-work-play environment Downtown. To stimulate further growth within the market from existing users. To replace some of the existing and potentially decaying office product or office stock in the market today. Lastly, to attract tenants from outside the market that are looking at Tennessee as a place for growth or relocation, and who may be apprehensive to Nashville at this point because of the compression in that market. I think Memphis is ripe to attract a national user or corporate headquarters. I think one thing the market needs here is office space that speaks to the revival that we’re seeing Downtown.
I think it could both be expansion space for FedEx, although there’s no deal there at this time. It could be space for existing users Downtown. It could be for suburban users that are looking to be in the urban core. I think what would be most exciting for the city and the state is finding new users from outside of Tennessee.
TDM: Are there plans to connect the FedEx Logistics headquarters with The Clipper?
Ross: Way too early at this point to tell. I think skybridges have their pros and cons. It allows for connectivity. … It’s something we’ve thought about. We also like to see vibrant streetscapes, and skybridges can hurt that. It’s something we’ll certainly consider and look at the feasibility of.
TDM: Who’s involved from a construction and professional services perspective?
Ross: LRK (Looney Ricks Kiss) of Memphis, architects on FedEx Logistics; ESA (Earl Swensson Associates Inc.) of Nashville, architects on office tower; Danny Bounds of Bounds & Gillespie Architects of Memphis on the hotel; Grinder, Taber & Grinder of Memphis, contractor on FedEx Logistics, with J.E. Dunn of Kansas City as an investor; J.E. Dunn, contractor on The Clipper; Kimley-Horn, engineers; and Cushman & Wakefield/Commercial Advisors, real estate services.
TDM: Will The Clipper be comparable to The Gulch in Nashville (where Somera Road owns property)?
Ross: When we look at some of the design that’s happened in Nashville, the Nashville community has done an incredible job of bringing best-in-class, modern, architecturally significant new office and hotel product to the market. We admire what they’ve done and would like to see some of that in Memphis, but we’re not creating The Gulch here.
TDM: How will parking be handled, considering Gibson’s surface parking lot will be the site of The Clipper?
Ross: The parking that Somera and the Orgels and our team has to offer at The Clipper project can’t be matched anywhere in Downtown Memphis. We spent a ton of time doing thorough parking studies across the market and making sure – when you look nationally at our portfolio, parking today is such an important component of making projects work, and we don’t take that lightly.
We’ve amassed parking in the immediate area, including at Lee’s Landing, next to the Westin, including FedExForum, and including the parking we’re planning on building as part of this project. Not only will we be able to park the Gibson building, we’ll be able to offer at least three (spaces) per 1,000 square feet at The Clipper office building, which we believe is really unmatched in this market.
The total spaces are TBD right now.
The Grizzlies have been incredible partners, working with us to make sure the parking at their facility is well utilized, creating a vibrant Downtown. They have a lot of parking that can be offered for shared uses. It’s obviously needed for game night, but allowing that parking to be freed up for 9-to-5 workers, I think is very important in encouraging lots like our parking lot to be developed. We’ll be extraordinarily well-parked for the entire project.
TDM: Will The Clipper include public parking?
Ross: There will likely be a public component as we work with the city with regard to public incentives on parking. And there will certainly be a public component.
TDM: What public incentives are you seeking through the Downtown Memphis Commission and affiliates?
Ross: I’d rather not go into incentives at this time. We certainly are going to need a lot of public support, which I believe Mayor Strickland and (DMC president) Jennifer Oswalt and their teams are eager to help us provide. A project of this magnitude won’t work without public support and public incentives. With regards to specifics, we’re really not there yet, and we’re still kind of compiling our research and our work.
TDM: What else can you tell us?
Ross: I don’t think there’s any market we’ve worked in quite like Memphis where everyone is so welcoming and encouraging.
I’m just in awe of the civic-minded community here in Memphis. In all avenues we’ve explored here, in all the stakeholders we’ve gotten the opportunity to meet, there’s just a real civic-minded approach, notably as seen from Benjamin and his father, Billy (Orgel). Everybody’s eager to succeed and to see this city grow. It’s truly been special to watch and learn and become part of it.
TDM: What else is Somera Road developing in Memphis?
Ross: In Memphis, we’ve been pursuing a variety of other projects. We’re partnering with the Orgels on what we’re calling the Snuff District (the former Conwood tobacco property in Uptown), almost 55 acres just north of the Pinch District, which we believe will continue to benefit from the compression we’re seeing Downtown. As the market moves south for residential development, we believe it will also start shifting north as well. And we’re excited to be partnering with the Orgels on that project as well.
TDM: What’s the perspective of Somera Road’s local partner on these projects?
Benjamin Orgel: I think it’s amazing and it shows – and not to steal the trademark of our Mayor Jim Strickland – how much momentum we have in Memphis that sharp, sophisticated real estate investors that are in over 40 markets and that are out of New York City, they took a chance on Memphis.
Ian is one of the smarter investors, because he noticed Memphis has legs and momentum, just like our mayor said. And they come down here, and I give it to them, he partnered with someone who knows the market and does development in Downtown Memphis, and I commend Ian and his team for being a big out-of-town investor. I think this just opens the door for other investors from other cities around the country to come in and make Memphis even better. We’re definitely on an upward trend.
Chairman’s Circle members Benjamin and Billy Orgel, partners announce expansive new development adjacent to FedEx Logistics future headquarters in Downtown Memphis
Hot on the heels of the announcement that FedEx Logistics will consolidate its headquarters in Downtown Memphis, New York-based real estate investment firm Somera Road Inc., its affiliate Somera Gibson Holdings (“Somera”) and local partner Orgel Family LP have announced The Clipper, a significant new mixed-use development adjacent to FedEx Logistics’ future headquarters at the former Gibson Guitar Factory building.
“A strong Downtown Memphis is critical, and we wanted to be a part of its momentum,” said Ian Ross, managing director of Somera Road, Inc. “We are thrilled to welcome the FedEx family to the Gibson building, and we’re grateful for the vision and support of the State of Tennessee, Mayor Strickland and City of Memphis, the late Phil Trenary and the Greater Memphis Chamber, EDGE, Jennifer Oswalt and the Downtown Memphis Commission, among others who have made this milestone possible. We would also like to thank City Councilman Berlin Boyd, who was a constant cheerleader for Downtown throughout our efforts and a visionary as to the creation and significance of a FedEx campus within the Memphis urban core. The Orgels, my team, and I look forward to further contributing to this vibrant neighborhood through The Clipper.”
“I am thrilled about this development project, which along with the FedEx Logistics headquarters at the former Gibson Guitar Factory building, will unlock massive opportunity for our business community and transform this southwest area of downtown Memphis into a thriving campus for our growing company. This is an ideal location for a global business like ours, which will benefit tremendously from the talent we will be able to attract to downtown Memphis.”
– Richard W. Smith, President and CEO, FedEx Logistics and Chairman of the Greater Memphis Chamber
The Clipper will include a 250,000-square foot, 8-story Class-A modern office tower, the first such new office product built in the downtown in over 20 years. The building will include 50,000 square feet of ground-floor space for potential restaurants, boutiques, and other retailers, multi-level parking, and activated public greenspaces and streetscapes. Additionally, the project will include a state-of-the-art approximate 250-key full-service hotel, flush with best-in-class food and beverage amenities, a rooftop deck, and conferencing center. The hotel will be built in partnership with Senate Hospitality, owners of the highly successful Westin Beale Street.
“The FedEx tenancy at the former Gibson site, our market research of the supply and demand dynamic Downtown, and the continued support and commitment from our investment committee have affirmed that we truly can reimagine a block of Downtown Memphis by strategically activating and bridging this valuable corridor between Beale Street and South Main,” continued Ian Ross. “The project will be a dynamic mixed-use, transformational connector.”
Somera Road engaged father-and-son Billy and Benjamin Orgel, Orgel Family LP, in April 2018 as local partner on the development.
“The Orgels have an innate sense for the needs and desires of a vibrant Downtown, and their partnership though this process has been instrumental,” said Ian Ross. “The Orgel’s civic-minded consciousness, the leadership of the Memphian public sector, and the larger community’s engagement overall have been especially welcoming, transparent, and inventive.”
“The Clipper represents the cutting edge of a live/work/play environment,” said Benjamin Orgel. “This is the next wave of energy that Memphis’ residents, employees, and visitors need.”
From a hospitality perspective, Nashville-based Senate Hospitality could not be in a better position to understand the Memphis market’s demand for full-service hospitality product, as they have seen tremendous success over the years at their Westin Beale Street hotel and look forward to delivering a new product that builds on such success.
“Senate is the perfect hotel development partner for us and Somera to bring to the table to join The Clipper’s vision,” continued Benjamin Orgel.
Glenn Malone, President & CEO of Senate Hospitality stated, “Downtown Memphis is a dynamic destination attracting leisure and corporate travelers as well as meeting planners and their groups from the mid-south and nationally. We are currently reviewing franchise brands and evaluating the amenities for this new full-service hotel that fit with this dynamic destination and its broad appeal. Senate looks forward to developing and operating this element of The Clipper.” Malone added, “We are pleased that Somera Road chose Senate Hospitality as its partner in this new hotel after evaluating other hotel development and management companies.” More details regarding the hotel will be announced in coming months.
Somera Road continues to work with partnering agencies including the Downtown Memphis Commission (DMC), who granted a PILOT lease transfer in December 2017.
“We love the enthusiasm that’s growing in Downtown Memphis,” said DMC President & CEO Jennifer Oswalt. “New development and density are always exciting and replacing surface parking lots with mixed-use development aligns well with the mission of the DMC. We look forward to this project furthering the Downtown momentum.”
“Today is another great day for the City of Memphis,” said Mayor Jim Strickland. “Having two projects of this magnitude happening across the street from each other along with everything else happening downtown—St. Jude, Union Row, the Riverfront—shows the strength of our momentum. I said during my State of the City address that we’re going to ‘build up, not out’, and this project is a prime example of that.”
Cushman & Wakefield/Commercial Advisors will manage commercial leasing services of The Clipper.
“Memphis is experiencing remarkable growth, and we’re particularly proud to represent visionary new construction developments such as The Clipper,” said Phil Dagastino, Jr., Senior Vice President at Cushman & Wakefield/Commercial Advisors. “We look forward to welcoming a mix of commercial, residential, retail and hospitality brands to this prime real estate opportunity.”
All information on The Clipper, including 3D renderings and videos, may be found at clippermemphis.com.