Virgin Group acquires Nashville development, shrinks hotel size

The Virgin Group acquired the site of the Virgin Hotel Nashville for $11 million from a partnership led by Dean Chase, a construction executive in Nashville. Chase had planned to develop and own the property but encountered problems when it came to financing the project, which will cost an estimated $100 million. Virgin Hotels was originally signed on to operate and brand the hotel.

Now that Virgin owns the future hotel and is fronting the money for the construction, changes are coming to the development. The Tennessean reported that the footprint of the property is shrinking from two hotel towers to one, and 15 planned condos and penthouses are also being scrapped. Despite this, Virgin Group Hotels' CEO Raul Leal told the Tennessean that the hotel is still expected to have approximately 240 hotel rooms and 7,500 square feet of function space. The hotel is also planning a recording studio, live music venue, rooftop lounge and fitness center.

Virgin is also looking to hire an architect to redesign the project.

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"Right now, the most important thing is to design a building that fits well into the community and also represents the brand well," Leal said.

The Nashville Business Journal reported in October that previous owner Chase was investigating alternative options for the hotel, as he was failing to raise the equity to attract lenders, placing his future with the property under scrutiny. With the shift in ownership and vision for the property, the hotel's planned fall 2016 opening is being pushed back to 2018. Constructed is expected to begin mid-2016, and a contractor has yet to be selected.

Despite these setbacks, 2015 has been a good year for Virgin's hotel venture. The beginning of the year saw the company's first ever opening with the Virgin Hotels Chicago, and it began construction on its New York hotel at the end of September. The New York property is located in the NOMAD neighborhood, and will serve as the brand's flagship hotel when it opens in 2018.

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