Music, Food, & Urban Development: The Future Of Nashville Real Estate
Nashville is no longer just the heart of country music; it’s the heart of all things real estate. We sat down with Walker & Dunlop’s Nashville superstars, Keith Melton (above) and David Strange (below), to talk the future of Music City.
Bisnow: What general trends are you seeing in the Nashville market?
Keith Melton: Nashville’s experienced tremendous job growth over the last five to 10 years. We joke that we’re the “it city” now. The job growth is very diversified. We’re also the HQ for national hospitals, groups like HCA, Community Hospital Systems and LifePoint. Nissan’s North American headquarters is here. We have GM, too. Diverse economy, insurance, healthcare. Job growth has really been off the charts, and has driven rent prices upwards.
Bisnow: Nashville is a city steeped in tradition and historical tourism. That being said, how do you see Nashville evolving and incorporating the future over the next year? The next five years? In the present day?
Keith: We utilized [Housing and Urban Development] space for much of our new construction financing with 75% being market-rate and 25% affordable housing. We have five larger Nashville suburban projects under construction and two smaller projects in the core of Nashville, both in areas becoming more gentrified. The workforce housing model is not struggling from an absorption or occupancy standpoint. Most building projects will do well long term.
David Strange: Memphis still has the largest populations, but has not achieved the same economic growth as Nashville. Where we have done 10 deals in Nashville over the past two years, we are looking at our first project in Memphis in over five years.
Bisnow: How does Nashville differ from other Tennessee cities (Knoxville, Chattanooga, Memphis)?
David: Memphis still has the largest population, but economically is on the lower end of the scale. Memphis struggles for a lot of reasons. They have a disjointed government style and have a difficult time obtaining loans. So we don't see a lot of growth. We got our first proposal there for the first time in five years, where we've done 10 in two years in Nashville.
Chattanooga has blown up. From a percentage standpoint, it’s even higher than Nashville, attracting Amazon and other jobs. Knoxville is a pretty conservative town; they're bigger but more conservative economically. The university is their biggest driver, but we’ve seen a lot of strong rental growth downtown. But there's been a lot of new supply coming on the line, especially on the east and west sides of Knoxville. The city doesn't see a lot of downturns or upturn, but is fairly consistent.
Keith: To return to our city, though, tourism is a big draw in Nashville—in terms of nightlife, culture and family-oriented activities. We are doing a great job of tying Lower Broad and 2nd Avenue with the Gulch through the new pedestrian bridge. Our arena is acoustically built well, so we draw lots of incredible concerts. The city has always been highly music- and entertainment-driven, but it's not just country music; there’s “new country” and alternative rock, some really cool and unique music scenes here for folks with all manner of tastes in music. We've got a lot of session workers who do night gigs and work here in Nashville instead of traveling.
The food scene here is exploding as well; we have a number of incredible restaurants. We’re 20 to 30 minutes away from a multitude of farms, so lots of healthy, local, organic options. There’s a big push towards urbanism, especially with a lot of Millennials moving here who want to pursue life where they live and work. All of this is heavily driving rental growth.
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