The city of Chattanooga, Tennessee, is known for Rock City featuring panoramic views and the Choo-Choo train station entertainment complex. But it has another facet of real estate that’s nothing to brag about: two enormous, nearly empty office complexes. And one may soon have a for-sale sign.
The properties are the headquarters of BlueCross BlueShield of Tennessee and a former regional office of the Tennessee Valley Authority. Combined, they span 2.4 million square feet and have been almost completely vacant for years since the companies adopted remote work policies.
Now, at least one may be prepped for a sale, the BlueCross complex of five separate but connected buildings. The healthcare network is in talks with potential buyers, a spokesperson said in an emailed statement. The 954,000-square-foot complex has not been officially listed, and BlueCross isn’t working with a broker at this point.
“Our successful remote-first approach to work means we no longer need the amount of space we have on Cameron Hill,” BlueCross spokesperson Dalya Qualls White said in an emailed statement, referring to the name of the hill where the campus is located. “We’ve been actively engaging with organizations interested in the campus. We’re in early discussions with interested parties.”
As for the five-building TVA complex, the federally controlled utility has not yet decided on its plans. TVA’s workforce has been remote since the pandemic, and only a handful of employees come to the downtown Chattanooga buildings during the week. In 2024, the agency said it could demolish, renovate or sell the 1.4 million-square-foot property. TVA is still considering its options, spokesman Scott Fiedler told CoStar News.
One of the largest divisions that occupied the downtown Chattanooga TVA complex, the System Operations Center, will move to a new complex in Georgetown, Tennessee, about 30 miles northeast of Chattanooga, later this year. Other significant landmarks in the city include the Choo-Choo train station with ties to a famous Glenn Miller song popular in the 1940s and the Rock City formation tourist attraction.
The BlueCross and TVA offices, located less than a mile apart, represent about 20% of Chattanooga’s total office space, said Wilson McGinness, vice president of brokerage services at Rise Partners. It wouldn’t be good if they both hit the sales market at the same time.
“It would be really detrimental if TVA or BlueCross dumped those on the market at once,” McGinness told CoStar News. He isn’t involved in marketing the BlueCross or TVA properties.
Even with the empty BlueCross and TVA buildings, the downtown Chattanooga office market has a relatively low vacancy rate, according to CoStar data. The central business district’s vacancy is 4.5%, compared to 4% for the entire Chattanooga market. The nationwide vacancy rate is 14%.
Two new developments in Chattanooga’s central business district could dump additional office space on the market. The South Broad District mixed-use development, anchored by a new minor league baseball stadium, may include office space. New offices in a vibrant mixed-use community would make the BlueCross and TVA properties less attractive, McGinness said.
The best-case scenario for the BlueCross campus would be for a large corporation to acquire and occupy the entire site, said McGinness. BlueCross opened the $300 million campus, designed by Duda/Paine Architects, in 2009, and it’s equipped for modern office users.
“We all have our fingers crossed that they sell it to a corporate user,” McGinness said.
The not-for-profit BlueCross BlueShield of Tennessee claims to be the largest health benefit plan provider in the state, employing about 6,600 workers. Its membership spans Tennessee, including Memphis and Nashville.
The BlueCross complex sits atop Cameron Hill, overlooking downtown Chattanooga and the Tennessee River. The campus has more than 4,000 parking spaces, a data room and extensive telecommunications and electric-power infrastructure.
It wouldn’t make sense to demolish the BlueCross property because of the significant investment the healthcare organization made in the building and its infrastructure, McGinness said. A conversion is probably not an option either, he said, because “we don’t need hotels or apartments at the moment.”