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FedEx Trade Networks backs out of deal for Gibson Guitar space

By Updated: November 29, 2018 5:15 PM CT

A deal that would have placed FedEx Trade Networks' headquarters in a prominent Downtown location is dead, FedEx officials confirmed Thursday.

Rumors first began to swirl in June that FedEx Trade Networks, the freight forwarding and specialty shipping arm of FedEx Corp. led by Richard W. Smith, was eyeing the 154,000-square-foot Gibson Guitar building in Downtown Memphis for its new headquarters.

Since the former Gibson factory is across B.B. King Boulevard from FedExForum, where the company has naming rights and heavy marketing involvement with the Memphis Grizzlies, the move was seen as a major coming-out party of sorts for Smith, who is the son of company founder Fred Smith.

Recently, Richard Smith has taken on a larger role in the community and is in the middle of a two-year term as Greater Memphis Chamber board chairman.

"FedEx Trade Networks can confirm it is no longer considering the Gibson Guitar factory building as a potential option for relocation of its headquarters," said Katie Wassmer, manager of FedEx Global Media Relations.

FedEx Trade has executive offices in the Crescent Center building at Poplar and Ridgeway in East Memphis and a support facility at Forest Hill-Irene and Winchester in Germantown.

FedEx Trade notified city and state officials Thursday, Nov. 29, that it was breaking off negotiations with the building's owners — investment firms Somera Road Inc. of New York and Tricera Capital of Miami, which bought the property last year for $14 million.

Somera Gibson Holdings LLC, the property owner, issued a statement Thursday afternoon saying the setback didn't dim its enthusiasm for the market.

"While unfortunately the opportunity for FedEx Trade Networks has not come to fruition, their level of interest and due diligence serves only to confirm further the validity of Downtown’s resurgence and the value of our building. We are appreciative of their time and interest in a Downtown presence," said the statement attributed to Somera Road managing partner Ian Ross and minority partners Billy Orgel and Benjamin Orgel.

Representatives with the city and the Tennessee Department of Economic and Community Development declined to comment.

The June report linking FedEx and Gibson came after previous reports said Wiseacre Brewing Co. was considering the factory building for its expansion.

Wiseacre, based on Broad Avenue, is now seeking a zoning variance to put up a new building a block south of the Gibson plant and FedExForum.

FedEx in January announced it would consolidate business units into an expanded FedEx Trade Networks to provide services including air and ocean forwarding, supply chain and fulfillment, cross-border shipping, 3-D printing and customized transportation offerings.

The new FedEx Trade Networks took in FedEx Supply Chain, FedEx Custom Critical, e-commerce unit FedEx Cross Border and a new company, FedEx Forward Depots, that includes a Collierville-based packaging lab, 3-D printing, repair center and critical inventory and service parts logistics.

Nashville-based Gibson Brands Inc. opened the guitar factory about 18 years ago on a site about a block south of the Beale Street Entertainment District.

Last year, it announced plans to relocate the guitar-making operation, and the building was bought by investment firms Somera Road and Tricera Capital.

In April, the new owners partnered with the Orgels through Orgel Family LP. Billy Orgel led redevelopment of the historic Tennessee Brewery, among other projects.

The statement from Somera Gibson Holdings LLC follows:

"We are extremely excited about the growth and vibrancy of Downtown Memphis, and we are proud to continue to be a part of its present and future development.

"Somera Gibson Holdings, LLC acquired the Gibson Guitar Factory Building property exactly one year ago for two outstanding reasons: the unique and attractive attributes of the city of Memphis, and the location and quality of this specific real estate, including the iconic Gibson building and the adjacent 0 Pontotoc parking lot.

"Our goal from the very beginning remains true — to find the right tenant that contributes to this growing city.

"Memphis’ trajectory one year ago clearly caught our eye, and the opportunity to participate in its advancement was a huge opportunity. We have not been disappointed. Between Union Row and Wiseacre Brewing’s announcements just last week, as well as other robust development news within the last year, these investments have only increased our confidence in Memphis’ pipeline and the value of our property.

"While unfortunately the opportunity for FedEx Trade Networks has not come to fruition, their level of interest and due diligence serves only to confirm further the validity of Downtown’s resurgence and the value of our building. We are appreciative of their time and interest in a Downtown presence.

"We have seen and continue to receive a consistent flow of interest from office, hotel, and retail uses for this Class A building in the heart of Downtown. We look forward to sharing the future use of our building with the public as soon as possible."



Topics

FedEx Trade Networks Gibson Guitars The Gibson real estate

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