New vs. Second-Generation Space in Nashville


Should I search for new or second-gen space?

I get that questions all the time when we first start working on behalf of a client.

And this applies equally to all aspects of Nashville commercial real estate - office, retail, industrial, etc.

In both new buildings and buildings that previously housed tenants, you have the opportunity

to build the space out to fit your needs.

Let’s dive into the pros & cons of both new vs. second-generation space.


Pros & Cons of New Space

New buildings are typically bare bones and may only have four walls and a door.

Sometimes not even that - you may have to demise a larger space.

Although you’ll have to create your space from the ground up, everything will be new.

You’ll get to choose the floor plan, the finishes, and everything else about the space to make it your own.

Many businesses love the opportunity new construction presents.

You’ll get to design your space to be the most effective and efficient for your business’ needs.

If you can wait for the space to be built out, which is typically 60–150 days depending on

your needs, it’s well worth it.


Pros & Cons of Second-Generation Space

Second-generation space has already been built out.

In a second-generation property, the space will often reflect the former tenant’s needs.

Here, you won’t have as many options for change.

It will require more work to rearrange the space at the very least.

However, you also won’t have the greater expense of starting from scratch.

If you have a business that requires a certain functionality, the second-generation space might not be the best option.

Although, you can negotiate tenant improvements with the landlord and have them cover it.

You’d be surprised at how a little planning and paint can alter a space, though.  

A space planner or designer may come in handy at this point.

They can take a current floor plan and show you what it could be after you’ve rearranged and finished construction.


Building Finishes

The finishes in each potential building are also something to consider..

In a second-generation space, you may only have the option of building standard selections for paint and carpet.

The landlord knows his costs on these selections and won’t deviate too far from standard finishes.

If you’re building out a brand-new space, you’ll likely have a tenant allowance and be able to choose any finishes within your budget.

Standard finishes, however, aren’t always limited by price.

The spaces will have to be painted and carpeted again by the next tenant, so it’s important that

they can be easily finished over.

Having a consistent look is also paramount to maintaining a professional commercial property.


Is It Compliant with Codes?

One of your most important considerations when comparing new vs. second-generation space.

properties is whether the space is up to code.

With Nashville commercial real estate, codes are generally not an issue with new buildings but you do have to be careful with older spaces.

The electrical systems may be forty years old, or the HVAC might be located next to a gas pipe. Codes today are very different than they were years ago, which means there may be extra expenses associated with becoming code compliant.

Similarly, the Americans with Disabilities Act (ADA) didn’t become law until 1990.

Buildings constructed before this time won’t always have the required access.

If your business is open to the general public, you can’t discriminate against anyone with a disability, and access must be provided.

Before you decide on a second-generation space, determine whether you or your landlord is responsible for making the building accessible.

However, if you aren’t pulling permits or performing any work in the space, the property could be grandfathered in and won’t require updating.

It’s best to rely on your broker and attorney in this case.