Warner Bros. Discovery has officially put its Knoxville, Tennessee, campus that is home to television channels such as HGTV and the Food Network on the market as the newly merged company tries to trim about $3 billion in costs.
But the New York City-based studio and production company isn’t leaving Knoxville and has plans to move into smaller space next year.
Warner Bros. Discovery this week listed its Knoxville campus that comprises two buildings on nearly 33 acres about 13 miles west of downtown along Interstate 40. JLL’s Atlanta office and Jay Cobble with Knoxville-based Providence Commercial Real Estate are marketing the site, which includes 11 vacant acres for potential development.
The campus landed in the company’s cost-cutting sights after Discovery completed its $43 billion merger with WarnerMedia in April.
Like other companies around the country, Warner Bros. Discovery has implemented a hybrid work model stemming from the pandemic, and its employee base in Knoxville is much smaller than the current space accommodates, Gunnar Wiedenfels, chief financial officer of Warner Bros. Discovery, wrote to employees in an email obtained by trade publication Variety.
"We can reap the benefits of selling" real estate that Warner Bros. Discovery doesn't "fully utilize,” Wiedenfels said in the memo.
Production Space
The campus includes two buildings: a155,000-square-foot office building built in 2010 and a 189,000-square-foot building developed in phases between 1995 and 2001 that was fully remodeled in 2010.
The larger building includes two studios, as well as production and post-production support space, according to marketing materials.
The Knoxville campus became part of Discovery's operations when it bought Scripps Networks in 2018 for $14.6 billion.
Warner Bros. Discovery plans to move into leased office space in Knoxville in June of 2023, according to the memo. More details about Warner Bros. Discovery's future Knoxville office plans were not disclosed.
Warner Bros. Discovery will be looking for space in a tight office market. Knoxville’s office market has 4.7% vacancy, far below the national average of roughly 12.4%, according to CoStar data.
CoStar’s Knoxville market report said that the low vacancy is a result of little new construction and office inventory declining.