Inside Nashville's Real Estate Market
For Nashville commercial real estate, it's the best of times, and the...no, it's not the worst of times. It's simply the best. But that doesn't mean there aren't challenges.
Speakers at our first-ever Nashville State of the Market said higher costs and transit issues are among the challenges facing the otherwise booming market.
Multifamily has seen the greatest growth in recent years, they pointed out, but now there's a bit of saturation at the top of the market, so there seems to be some pullback by national banks and investors.
With some 30,000 to 40,000 jobs being created each year, the demand for office space is healthy, driving rents higher and vacancies lower, especially in very tight markets like Cool Springs. Unlike many cities, the demand for retail, especially in the west side market, is actually fairly strong.
Pictured: SWH Residential Partners managing partner John Tirrill, Crosland Southeast managing partner Tim Sittema, Albany Road Real Estate Partners managing director Scott Cloud, Spectrum Emery VP David Wells, and Avison Young principal and managing director Warren Smith, who moderated.
Institutional investors are more interested in Nashville than they've ever been, our speakers said, and for good deals, there's no shortage of capital, though stiff competition and a lack of good sites can make things problematic for developers, especially of infill industrial properties, the demand for which is very strong.
As Millennials flock to town, and higher-priced residential development becomes more the norm, affordable housing looms as a serious problem. To their credit, municipal officials acknowledge the problem, and there's a window of opportunity for developers to help solve it. But it will be tough. And so will a related challenge, Nashville's lagging transit infrastructure.
Here are Bristol Development Group co-founder and principal Sam Yeager, SouthStar founder and CEO Glenn Wilson, Colliers International CEO and market leader Janet Miller, Skyline founder Tony Wilbert, who moderated, and Holladay Properties partner Allen Arender.
Google Fiber head of sales in Nashville Terrence Brooks spoke about the future of broadband service in Nashville and what it will mean for growth. His company is at work installing 3,200 miles of fiber in the city, and more than 300 properties have signed up for Google Fiber so far. That's only the beginning, he said, and eventually the impact of high-speed connectivity will have a direct positive effect on the size of the Nashville economy—it's a measurable phenomenon that's happening in other markets.
Faster connectivity will also be part of the solution to the problem of the digital divide, Terrence added, a cause that Google is very much focused on. He urged the audience to do their part to help everyone, especially every school-aged child, have access to the internet. It's essential for their prospects, and for the future economic well-being of Nashville.
TN Department of Economic and Community Development chief of staff Ted Townsend lauded Nashville as one of the best cities in the nation for startups, creatives, small businesses, larger businesses, people looking to move here, and more. "It's a great time to be here," he said.
It's no accident. He attributed much of the success of Nashville to a business-friendly climate, and one of the lowest tax burdens in the country. He cited such site selection success stories as Community Health Systems, Bridgestone Americas, Aramark and others, adding that well-designed incentive programs have been helping attract companies—increasingly from overseas—and offering strong returns on that investment.
