Albany Road Sees Value in Nashville

As reported in The Tennesseean

City’s growth attracts real estate company Nashville’s growth makes it a sought- after market for institutional investors looking to spend millions on real estate assets. That includes Albany Road Real Estate Partners, which hired Scott Cloud to open an office on West End here to target deals across the Southeast.

The Boston-based firm recently paid $34 million for ServiceSource Tower at 201 Fourth Ave. N. in its first deal here. Before becoming a managing director with Albany Road, whose president is Vanderbilt University alum Chris Knisley, Cloud was a senior vice president of investments with Atlanta investment and development firm Carter.

Cloud, 38, who is relocating from Atlanta this summer, spoke with Tennessean reporter Getahn Ward about Albany Road’s focus and the commercial real estate market.

How will Albany Road stand out in such a competitive market for inves- tors?

We add value in a couple of ways: We have extensive relationships across the Southeast that help us identify opportunities. We have a strong capital source — high net worth individuals and family offices — that allows sellers to have strong confidence and assurance that we will close quickly and do what we say we’re going to do. Between my experience and those of the partners, we’re able to evaluate opportunities and find the right fit for our investors.

Why Nashville over Atlanta? How different is your investment strategy for a secondary market like Nashville, versus a larger city like Boston?

I love Atlanta and we see a lot of opportunities there, but Nashville is a great location to open our Southern headquarters. Many of the partners and I have a history here and the economic story is arguably one of the best in the South. Albany Road was started in the Northeast pursuing secondary market opportunities, and so we see many opportunities to do that in the Southeast like in Nashville, Atlanta, Charlotte and Raleigh. We see the ability to find opportunities that may not be a fit for institutional capital and so that’s a competitive advantage. We see opportunities in many of the tertiary Southeastern markets as well.

Which specific types of real estate will Albany Road target here and why?

We’ll pursue office, industrial and retail acquisitions in the $10 (million) to $50 million range. We’ll go above that, but that’s the general range of most of our transactions. The Albany Road team has extensive experience in those three property types, which allows us to add value for our investors. I moved to Nashville in the late 1990s right out of college and have spent a great deal of time in Nashville pursuing acquisition opportunities throughout the years. I’ve been able to see as a non-resident all of the growth and opportunity that’s occurred. At Carter we pursued some downtown and suburban office opportunities here.

What was attractive about ServiceSource Tower to make it your first deal here, and what are your plans to boost your returns from that acquisition?

It’s a prominent downtown office building with a great tenant (ServiceSource). We believe in the Nashville story and growth. The opportunity to buy a high-quality, well-located office building in such a strong city was very attractive to us. We’re actively pursuing opportunities now in Nashville and other Southeast markets. We’re exploring ways to upgrade the building and tenant experience, one of which is a potential lobby renovation.

What’s the biggest thing you’re watching in Nashville as far as its growth?

As a guy coming from Atlanta where we have transportation challenges of our own, it will be very interesting to watch how Nashville manages transportation as it grows. What is very clear to me from coming to Nashville often is having the city and the state government here is a very big positive, and it appears to me that there’s a lot of cooperation between the business leaders and the city’s leaders. And attracting ServiceSource to this building is a great example of that.