residential report: july 2016 - nashvilledowntown.com · realtors mid-year report states that sales...
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1 Greater Nashville Association of Realtors, “Middle Tennessee Home Sales Gain in June Amid Tight Inventory,” July 7, 2016 2 Freeman Webb, “Second Quarter Nashville Regional Apartment Survey,” 2Q 2016 3 Freddie Mac, “99 of Top 100 Housing Metros Improve Year Over Year,” June 29, 2016
RESIDENTIAL REPORT: JULY 2016
Demand high, housing prices escalate with product delivery imminent
NASHVILLE DOWNTOWN PARTNERSHIP 150 4th Avenue North, G-150 Nashville, Tennessee 37219 615-743-3090 www.nashvilledowntown.com
Strong, unparalleled demand for downtown living and a lag in
housing inventory delivery have resulted in a continuing increase
in rental rates and condo prices. Rental occupancy remained at
97% and above for the fifth consecutive year. Housing prices
have increased significantly over the past 36 months, as
inventory remains at a mere 2.6-month supply of resale units.
Significant rental product delivery is expected over the next
several years, and close to 1,000 rental units will open this year,
beginning to quench some of the pent-up demand. With only 71
purchase units in the pipeline to deliver in 2017, and another 169
units in speculative projects, demand for purchase units
continues to build as prices of existing units escalate. Unless
existing rental product or projects under construction convert,
there will be no short-term relief for buyers. Area job growth
compounded with growing preferences for urban living options
will continue the momentum for downtown housing demand for
the foreseeable future.
Nashville Housing Market: The Greater Nashville Association of
Realtors mid-year report states that sales gained in June amid
tight inventory. June sales are up 1.7% compared with a year
ago. Second quarter numbers are also up 5.3% compared with
second quarter numbers from 2015, and year-to-date sales are
up 7.2% compared with numbers from mid-year 2015.1 Also,
according to a report released by Freeman Webb, rental
demand is expected to outpace supply in the Nashville MSA
through 2017.2
Nashville is ranked the nation’s strongest housing market by
Freddie Mac, according to a recently published press release. A
Multi-Indicator Market Index is used to compare the top one-
hundred housing metros. Nashville ranked #8 at the end of 2015.
The ranking is based on payment-to-income ratios, job growth,
on-time mortgage payments and purchase applications.3
RESIDENTIAL REPORT: JULY 2016 DOWNTOWN NASHVILLE
3http://www.forbes.com/sites/joelkotkin/2016/05/10/the-best-cities-for-jobs-2016/#79f664eb6e40 4 http://www.brookings.edu/research/reports2/2016/01/metro-monitor#V0G34980 5 http://www.businessinsider.com/the-13-hottest-us-cities-for-2016-2015-12 6 http://realestate.usnews.com/places/tennessee/nashville 7 http://www.kauffman.org/microsites/kauffman-index/reports/growth-entrepreneurship, 2016 8 https://smartasset.com/mortgage/the-top-ten-cities-for-creatives-in-2016 9 http://www.axiometrics.com/company/pressreleases/axiometrics-apartment-annual-effective-rent-growth-keeps-
moderating-in-second-quarter
A study conducted by Forbes ranked Nashville as the 4th best big city for jobs in 2016. The
rankings are based on research of 421 U.S. MSAs based on employment data from the Bureau
of Labor Statistics from 2004 through 2015.3 Nashville also ranks among the top 10 cities for
growth and prosperity, according to the Brookings Institute. The Nashville MSA ranked 5th for
growth and 10th for prosperity among the 100 largest U.S. metros over the last five years.4
Nashville is on Business Insider's list of the hottest American cities for 2016. In choosing these
cities, the group looked at job growth, population growth, affordability, livability, and the
health and well-being of the city's residents. Each city was also ranked on its “coolness”
factor.5 U.S. News touted Nashville as one of the best places to live based on quality of life
and the job market in each city, as well as the value of living there and people's desire to live
there. Of the 100 cities analyzed, Nashville ranks 22nd with an overall score of 6.8 out of 10.6
Nashville has also received national acclaim in areas other than job growth and housing
market strength. Nashville was ranked the 5th top city for start-up growth, ahead of San
Francisco and Boston. Nashville’s ranking jumped 4 places from 2015. Rankings were
determined by employment and revenue growth at companies in particular areas.7 Two
years in a row, Smart Asset has ranked Nashville as one of the “Top Ten Cities for Creatives.”8
According to 2Q data released by Axiometrics, a Dallas-based research firm, Nashville ranks
#8 among major metro areas in annual effective rent growth, which is a key indicator of a
healthy apartment market. The national annual effective rent growth is 3.7% and occupancy
is 95.2%. Currently Nashville’s annual effective rent growth is 6.3% and the region’s occupancy
rate is 96.1%.9
RESIDENTIAL REPORT: JULY 2016 DOWNTOWN NASHVILLE
Peer City Comparison
Downtown Nashville’s population and residential units continue to trail peer
cities with the exception of Indianapolis, with over 9,600 residents and 6,012
units projected by the end of 2016. Lack of residential zoning until the mid-
1990’s put downtown Nashville behind in urban residential development.
Figure 1 Year-End Projections–Downtown Residents*
2015 2016 2017
Nashville 8,313 9,619 12,402
Austin 11,899 14,001 14,001
Charlotte 12,600 14,089 18,707
Indianapolis 7,756 8,688 10,508
Memphis 24,367 24,630 25,660
Figure 2 Year-End Projections–Downtown Housing Units*
2015 2016 2017
Nashville 4,890 6,012 7,751
Austin 7,547 8,987 8,987
Charlotte 8,182 9,155 13,175
Indianapolis 4,483 5,022 6,074
Memphis 14,548 14,740 15,490
Nashville’s downtown population will grow 16% by the end of 2016, and is
expected to grow another 29% by the end of 2017. Although downtown
Nashville trails all but one of its peer cities in both housing units and residents,
it has the second strongest planned residential population growth over the
next 18 months. Charlotte comes in first with 33% planned population growth,
and leads all cities with planned residential unit growth of 44% from year-end
2016 to year-end 2017. Although Austin has led population growth in past
years, it will grow 18% by the end of 2016, and not show any additional growth
through 2017(fig. 1-2).
All peer cities have high rental occupancy rates, with Nashville and Charlotte
both at 97%. Although downtown Indianapolis is approximately 5.5 square
miles, its downtown organization has started tracking stats of its downtown
Square Mile (downtown core), which is more comparable to downtown
Nashville, Austin and Charlotte in land area comparisons (fig.3-4).
Figure 3 Rental Occupancy Rate*
2016
Nashville 97%
Austin 94%
Charlotte 97%
Indianapolis 94%
Memphis 95%
Figure 4 Land Area Comparisons*
Square Miles Acres Density per Acre
Nashville 1.8 1,180 8.7
Austin 1 640 21.8
Charlotte 2 1,300 10.8
Indianapolis 1 640 13.5
Memphis 6.5 4,160 5.9 *Information provided by Downtown Austin Alliance, Charlotte City Center, Indianapolis Downtown Inc. and
Downtown Memphis Commission (June 2016)
RESIDENTIAL REPORT: JULY 2016 DOWNTOWN NASHVILLE
Downtown Nashville’s rental occupancy is 97%, and has remained above 95% for the past seven
years (fig. 6). It has also consistently held higher rental occupancy rates than its peer cities. A survey
of property managers conducted in June 2016 evaluated over 2,250 units in 30 properties. Twelve
of the properties are 100% occupied and income-restricted projects have waiting lists. Earlier this
year it was announced that Peabody Quarters, located in Rutledge Hill/SoBro, is being converted
to a Guest House. The 23 rental units at this property have been taken out of the overall rental
inventory. This occupancy rate also does not include for-sale properties that have been rented out
by their owners. Terra House Apartments was not included in the study because it was delivered to
the market this spring 2016 and has not yet fully leased.
Downtown Housing Categories
Currently there are 5,084 downtown residential units of which 49% are rental, 47% are condo and
4% are single family units. Market rate housing constitutes 95% and affordable 5% of the housing mix.
From 2010 through 2015, downtown has seen 61% population growth (fig.5). This is 6 times the
percentage growth of the Nashville MSA, 7 times of Nashville, and 15 times that of the State of
Tennessee during the same time period.
Figure 5 – Population Growth Comparisons (2010 – 2015)
Population Growth 2010 2015 % Growth
Downtown 5,155 8,313 61%
Nashville 626,681 678,889 8.3%
Nashville MSA 1,670,890 1,830,345 9.5%
Tennessee 6,346,105 6,600,299 4.0% Source: Nashville Downtown Partnership 2016, US Census Bureau
Rental Market
The 2,506 rental units within 33 properties in downtown Nashville make up 49% of the current
downtown housing mix. Currently, there are there are ten rental projects under construction that will
deliver 2,497 units by 2018, with 928 coming online this year. An additional ten projects are
announced/planned that could deliver over 3,200 additional units by 2019.
Downtown apartments have consistently had high occupancy rental rates. Currently, downtown
has an occupancy rate of 97%, and has been over 95% since 2010 even with additional rental
product delivering to the market. Occupancy rates remained at 92% or above even through the
economic downturn (fig. 6). According to the June 2016 survey of property managers, the
downtown core is full at 98%, Rolling Mill Hill is 97%, Rutledge Hill/SoBro is 100% and The Gulch is 95%
occupied.
Figure 6 – Downtown Nashville Rental Occupancy Comparisons
Rental Occupancy Rate– Year Downtown Greater Nashville
2007 95% 94.84%
2008 93% 90.60%
2009 92% 90.20%
2010 95% 92.54%
2011 96% 93.36%
2012 98% 95.41%
2013 98% 95.16%
2014 98% 95.93%
2015 97% 95.33%
2016 97% 95.32% Source: 1Q 2016 Greater Nashville Apartment Association Market Study, NDP Property Manager Survey June 2016
RESIDENTIAL REPORT: JULY 2016 DOWNTOWN NASHVILLE
10Nashville, Tennessee, Municipal Code BL2014-951
In addition to the high downtown rental occupancy rate, the shadow market units (i.e.
individual-owned units within condominium properties) continue to rent at increasing rates. At
least 600+ additional condo units are leased. Most condominium properties have capped
percentages for rental units and strict monitoring by property management aids in identifying
this number.
Lack of sufficient inventory of hotel rooms and a rise in popularity of Airbnb and VRBO have
served as a catalyst for a growing short-term rental market downtown. Over the past 36 months,
Short-Term Rental Properties (STRP) have grown significantly, leading the City of Nashville to pass
Ordinance No. BL2014-951 and Ordinance No. BL2014-909 to regulate this practice through a
permit process. A STRP is “defined as a residential dwelling unit, containing not more than four
sleeping rooms and that is used and / or advertised for transient occupancy.”11 The law applies
to all properties (including rooms and guest houses) that are rented for less than 30 consecutive
days to the same occupant. According to the Metro Nashville Codes Department, as of June
22, 2016, 141 permits have been issued for downtown units, almost double from last year (75
permits). Although difficult to track, it is more likely that STRP are conversions from rental units
by property owners than from owner-occupied condos due to strict homeowner’s association
rules and lack of provisions for this type of use in Master Deeds for large residential properties.
Figure 7 – Downtown Nashville Market Rate Rental Comparisons
Rental Market 2012 2013
2014
2015
2016
SIZE 419 - 4,500 SF 419 - 4,500 SF 419 - 4,500 SF 419 – 2,059 SF 419 – 2,059 SF
MARKET RATE
CATEGORY
Studio $570 - $1,300 $590 - $1,300 $630 - $1,300 $630 - $1,900 $655 - $1,500
1 bedroom $670 - $1,700 $700 - $1,899 $730 - $2,000 $730 - $2,200 $755 - $2,060
2 bedroom $822 - $2,700 $858 - $2,799 $878 - $3,114 $878 - $3,300 $955 - $3,399
3 bedroom $1,400 - $4,000 $1,400 - $4,000 $1,400 - $4,000 $1,400 - $3,200 $1,425 - $3,700
According to a survey of property managers and leasing agents in downtown rental properties,
rental rates continue to rise in all categories. The only caveat is that smaller studio units seem
to be capped at $1,500 per month, which has essentially been market driven. Overall, units
that yield the highest square foot prices are studios ranging from 419 – 600 SF in newer rental
properties that are walkable to restaurants and amenities. Some studio properties in The Gulch
rent between $3 and $3.15 per square foot (fig 7).
There are 255 affordable rental units in four properties that make up 10% of the rental market
and 5% of the overall downtown housing market (fig. 8). Over the past 12 months, rental prices
for these units increased from .5% - 2%.
RESIDENTIAL REPORT: JULY 2016 DOWNTOWN NASHVILLE
Figure 8 – Downtown Nashville Affordable Rental Comparisons
Rental Market 2016
SIZE 500 - 1,316 SF
AFFORDABLE CATEGORY
Studio $654
1 bedroom $697
2 bedroom $833
3 bedroom $958
Condominium Market
Downtown Nashville currently has 2,358 condo units within 43 properties. Condominiums make
up 47% of downtown housing. Twelve Twelve, the first condo project downtown since Terrazzo
in 2009, began delivering units in late 2014 and sold out in April 2016. Research in early July
indicates that there are 78 resale units available to purchase across downtown (32 under
contract) which results in a 2.7-month supply. A balanced market has a six-month supply of
units.
An assessment of four downtown high-rise properties shows that price per square foot of condos
has consistently increased in all four properties annually since 2011. Prices in the more
established buildings have increased by double digits over the past 18 months, with the Viridian
up 15%, Encore up 16% and ICON up 12%. The cumulative weighted average of all four
properties dropped a few percentage points from 2015. However, the weighted average was
particularly high in 2015 due to 232 condo units at Twelve Twelve delivering within one year.
Seventy-nine percent of the weighted average came from these sales prices. The weighted
average has risen 16% from 2014 to the present. The breakout data is provided for buildings
that average more than twelve annual transactions in order for the data to be meaningful to
establish a trend (fig. 9-10).
Figure 9 – High-Rise Square Foot Comparisons
PPSF By Building 2010 2011 2012 2013 2014 2015 2016 (Jan-June)
Viridian $257 $263 $288 $308 $380 $396 $436
Encore $257 $243 $294 $364 $380 $406 $443
ICON $305 $281 $358 $391 $415 $442 $466
Twelve Twelve $471 $498 $511
Weighted Average $298 $275 $325 $361 $407 $474 $471
Source: http://realtracs.net, July 2016; Parks in the Gulch data for Twelve Twelve, June 30, 2016
RESIDENTIAL REPORT: JULY 2016 DOWNTOWN NASHVILLE
Figure 10 – Downtown High-rise Price per Square Foot Comparison by Building
Across these four properties, the highest square-foot prices so far this year have occurred at
Twelve Twelve for $904, $903 and $803. Other record prices include $628 at ICON, $536 at
Encore, and $532 at Viridian.
Twelve Twelve’s last developer units sold in April 2016. This property’s units have yielded some
of the highest per square foot prices seen in downtown. In resales alone in 2015 and 2016, the
average price per square foot is $699. Comparing the original sales price to the re-sale price
yields an average delta of $126.60 per square foot. Average one-bedroom resales are $501
PPSF, average two-bedroom are $631 PPSF, average interior two-bedroom are $545 PPSF,
average corner 2-bedroom are $703 PPSF and average penthouse is $828 PPSF.
Twelve Twelve interior Encore amenities level
$200
$250
$300
$350
$400
$450
$500
$550
2010 2011 2012 2013 2014 2015 2016 (Jan-June)
Downtown Highrise Price Per Square Foot by Building
Viridian Encore ICON Twelve Twelve
RESIDENTIAL REPORT: JULY 2016 DOWNTOWN NASHVILLE
Single Family Market
Single-family homes make up 4% of downtown housing inventory. Of the 220 total homes
downtown, 217 are in the Hope Gardens neighborhood. The other three single family homes
are located in the downtown core. Four single-family residential permits were issued for Hope
Gardens over the past 12 months, and two of the sites have completed development.
Downtown Geographic Boundaries
The Nashville Downtown Partnership’s definition of downtown includes properties within the
boundaries of the river on the east, the interstate loop on the south and west, and Jefferson
Street on the north. This geographic area is termed the Greater Downtown, which includes the
Central Business District (Core), The Gulch, North Capitol, Hope Gardens, Rutledge Hill, Rolling
Mill Hill, and SoBro. Germantown is adjacent to downtown, but not included in the residential
counts.
RESIDENTIAL REPORT: JULY 2016 DOWNTOWN NASHVILLE
Under Construction
Ten residential projects that are under construction will deliver
2,697 units by year-end 2018. By the end of 2016, 928 units will
open in five projects.
Five projects are scheduled to deliver in 2016: 909 Flats, located
on Rosa L Parks Blvd, across from the Nashville Farmers Market in
Hope Gardens is currently preleasing its 232 units for August move-
ins. Thirty-one rental units will come online in August at The James,
a mixed-use project under construction in The Gulch. The Carillon
Apartments, 306 units, just adjacent to First Tennessee Park, began
move-ins in June. The SoBro, a 32-story apartment tower, will
begin move-ins in October and have 313 rental units and almost
20,000 SF of retail/restaurant space. Jefferson Street Apartments,
developed by the Metropolitan Development & Housing Agency,
will deliver 54 affordable rental units this fall.
Additionally, Church Street Apartments will deliver 367 units to the
North Gulch area by 1Q 2017. River House under construction at
Rolling Mill Hill will deliver 245 apartments in the fall of 2017. 505, a
mixed condo and apartment tower will begin delivering units in
the fall of 2017. Olmsted SoBro will begin delivering part of its 328
rental units in 2017, continuing into 2018. Solis North Gulch will
deliver 271 rental units in 2018.
Pipeline Projects
Thirteen additional residential projects have been announced or
planned that could deliver 3,700+ units to the market by 2019.
The Fifth and Broadway development includes an apartment
tower with 350 units. City Lights, one of three pipeline projects to
include for-sale units, plans to break ground in late July and
deliver 71 condos in 2017. Other planned residential projects
include 8th & Division, 8th & Demonbreun, Ballpark Apartments,
Broadway Mixed-Use Tower, Capitol View Development Phase I,
Crescendo, Sixth & Lea, SoBro mixed-use residential/hotel
development, Water Tower, Rolling Mill Hill parcels awarded by
MDHA and Stockyard residential project.
Rendering of 505
CityLights amenity deck
Stockyard Project Rendering
8th & Division Rendering
909 Flats Rendering Broadway Mixed-Use Tower Ballpark Apartments
RESIDENTIAL REPORT: JULY 2016 DOWNTOWN NASHVILLE
Demographic Profile and Trends
The Nashville Downtown Partnership’s 2016 Downtown Residential Survey had a 10.4% response
rate. In May 2016, approximately 4,500 surveys were distributed to homeowners and renters by
direct email and via building and condo managers. The survey focused on residents who live
in Nashville’s downtown defined by these boundaries: Jefferson Street on the north,
Cumberland River on the east and the interstate loop on the south and the west.
Where Residents Moved From
Downtown continues to attract professional, highly educated residents from across all age
groups, increasing the city’s workforce competitiveness. Thirty percent of residents moved to
downtown from out-of-state, and another 34 percent moved from outside the city. Twenty-
eight percent moved from Nashville.
Household Status
Of the respondents, 38% are single, 47% are married, 10.5% are separated or divorced, and 4.5%
have a domestic partner (fig.11). The number of respondents in the married category has
increased 24% since 2014.
Figure 11 – Household Status
Age and Gender
Respondents exhibit a broad cross section of age groups. Twenty-nine percent of downtown
residents are considered to be Generation Y (age 35 and under). Baby Boomers (age 52-69)
make up the largest group at 41%, up 8% since 2012. Generation X (age 35-50) represents 27%
of the downtown population, decreasing 6% since 2012. Generation Y (ages 35 and under)
represents 29% of the population (fig.12). Generation Y and Baby Boomers are the two
generations expected to show the most increase in migration to urban areas going forward.
Downtown residents are 49% male and 51% female. Male and female percentages continue
to fluctuate around the fifty-percent mark from year-to-year.
Figure 12 – Age of Respondents
47%
38%
10%
5%
Household Status
Married
Single
Separated/Divorced
Domestic Partner
29%
27%
41%
3%
35 or under
36-51
52-69
70 or over
RESIDENTIAL REPORT: JULY 2016 DOWNTOWN NASHVILLE
Household Income
Eighty-three percent of downtown households earn over $60,000 annually. Sixty-three percent
earn over $100,000 annually, up 5% from last year. Thirty-six percent earn over $150,000 each
year. One percent earn less than $20,000 annually (fig.13).
Figure 13 – Annual Household Salary Range
Level of Education Completed
Fifty-three percent of downtown residents have a college education and an additional 34%
hold postgraduate degrees (fig.14).
Figure 14 – Level of Education Completed Comparisons
2 or 4 Year Degree Graduate or Professional Degree
Downtown 53% 34%
Nashville 30.7% 13.2%
Nashville MSA 28.5% 11.% Source: Downtown Residential Survey 2016, Nashville Area Chamber of Commerce, June 2016
Work Location
Sixty percent responded that their office is located outside of downtown. Although being close
to work is cited by 27% of downtown residents as a top reason to live downtown, residents
choose more compelling reasons to live in downtown Nashville.
Quality of Life Factors
When residents were asked what four elements most positively influenced their continued
downtown living, the top response was the urban experience (53%) followed by central
location/convenience (48.5%), arts and cultural events (28.5%), being close to work (27%), and
restaurant selection (26%). The urban experience has been cited for the 9th year as the top
reason for living downtown.
1%
5%
11%
10%
10%
27%
36%
Less than $20,000
$20,000 to $39,999
$40,000 to $59,999
$60,000 to $79,999
$80,000 to $99,999
$100,000 to $150,000
More than $150,000
0% 10% 20% 30% 40%
Annual Household Salary Range
RESIDENTIAL REPORT: JULY 2016 DOWNTOWN NASHVILLE
Study Area Housing Market
The Greater Downtown has 5,084 existing units, and an additional 6,464 units are either
planned or under construction (fig 15).
Figure 15 – Existing Housing Downtown Nashville
# Units Rental Condo/SF Property Address Rental/Condo
CBD Existing Apartments/Condos/Single Family
(Downtown Core) 113 Second Avenue Lofts 1 1 113 Second Avenue Rental
115 8th Avenue North 1 - 1 115 8th Avenue North Condo
123 2nd Avenue North 1 - 1 123 2nd Avenue North Condo
138 2nd Avenue North 1 - 1 138 2nd Avenue North Condo
213 Printers Alley 1 1 213 Printers Alley Single Family
217 2nd Avenue North 1 1 217 2nd Avenue North Condo
218 3rd Avenue North 1 1 218 3rd Avenue North Rental
219 2nd Avenue North 1 - 1 219 2nd Avenue North Condo
219 5th Avenue North 3 2 1 219 5th Avenue North Condo/Rental
244 5th Avenue North 2 1 1 244 5th Avenue North Condo/Rental
320 Broadway 4 - 4 320 Broadway Condo
420 Broadway 1 - 1 420 Broadway Condo
423 Union Street 2 2 - 423 Union Street Rental
425 Broadway 2 - 2 425 Broadway Condo
500 Fifth Apartments 170 170 500 Fifth Avenue North Rental
506 Lofts 5 5 506 Church Street Rental
Ambrose Lofts/Music City Loft 21 18 3 162 4th Avenue North Condo
Art Avenue Lofts 32 - 32 231 5th Avenue North Condo
Banner Lofts on 3rd 31 31 162 3rd Avenue North Rental
Bennie Dillon Original Lofts 86 - 86 700 Church Street Condo
Capitol Towers 219 184 35 510 Gay Street Rental/Condo
Cumberland on Church/Penthouses 289 256 33 555 Church Street Rental/Condo
Church Street Lofts 17 - 17 301 Church Street Condo
Kress Lofts 29 - 29 237 5th Avenue North Condo
Lofts above ICHIBAN 8 8 - 107 Second Avenue N Rental
Lofts at 160 32 32 - 160 2nd Avenue North Rental
Lofts at Noel Court 4 4 214 3rd Avenue North Condo
Lofts at the Exchange 47 - 47 309 Church Street Condo
Lofts at the Reserve 62 62 301 Rosa L Parks Rental
Market Street Apartments 63 63 - 150 Second Avenue South Rental
Phoenix Lofts 6 - 6 207 3rd Avenue North Condo
Printers Alley Lofts 9 9 211 Printers Alley Rental
Private Residence 1 - 1 226 3rd Avenue North Single Family
The Quarters 32 - 32 178 2nd Avenue North Condo
Rhea Building Lofts/Music City Suites 11 11 - 166 2nd Avenue North Rental
Smith House 1 - 1 167 Rosa L Parks Single Family
Stahlman Building 142 142 - 222 3rd Avenue Rental
Viridian 305 - 305 415 Church Street Condo
Watauga House 25 - 25 222 Polk Ave. Condo
Westview 10 - 10 179 8th Avenue North Condo
1,689
1011 678
RESIDENTIAL REPORT: JULY 2016 DOWNTOWN NASHVILLE
Continued…
Area Location # Units Rental Condo/SF Property Address Rental/Condo
North Capitol District Lofts 69 - 69 Corner of Harrison & 3rd Ave Condo
Harrison Square 15 - 15 Harrison & 3rd Avenue North Condo
Harrison Square Phase II 48 - 48 Harrison & 3rd Avenue Condo
Hope Gardens Residences 217 217 Hope Gardens Single Family
Ireland28 28 - 28 900 Block of Ireland Street Condo
Riverfront Condos 145 - 145 726 1st Ave. N. Condo
Row 8.9n 29 - 29 800 Block 8th Avenue North Condo
551 - 551
Rolling Mill Hill City View - Art Deco 24 24 - 210 Middleton Street Rental
City View - Metro 36 36 - 210 Middleton Street Rental
City View - Victorian 12 12 - 210 Middleton Street Rental
City View Apartments 102 102 - 210 Middleton Street Rental
Nance Place Apartments 109 109 - 8 Academy Place Rental
Ryman Lofts 60 60 - 100 Middleton Rental
Terra House 194 194 - 115 Middleton Rental
537 537
SoBro/Rutledge Hill Academy Square Condominiums 50 - 50 100-149 Academy Square Condo
Cardwell Place Condominiums 4 4 Lea Avenue and Rutledge Condo
Encore 333 - 333 301 Demonbreun Condo
Howell Park 40 - 40 401-479 2nd Ave. S. Condo
Room in the Inn 38 38 705 Drexel Street Rental
Rutledge House 41 - 41 656 Second Ave. S. Condo
Rutledge Terrace 18 - 18 430 Second Ave. S. Condo
Big Red Lofts 20 20 527 8th Avenue South Rental
544 58 486
The Gulch Eleven North Apartments 302 302 210 11th Avenue North Rental
ICON 417 - 417 600 12th Avenue South Condo
Laurel House Apartments 48 48 - 1101 Laurel Street Rental
Mercury View Lofts 32 32 - 1209 Pine Street Rental
Pine Street Flats 296 296 - 1055 Pine Street Rental
Terrazzo 117 - 117 700 12th Avenue South Condo
Twelve Twelve 286 286 1212 Laurel Street Condo
Velocity 265 222 43 320 11th Avenue South Condo/Rental
1,763 900 863
TOTAL EXISTING 5,084 2,506 2,578
RESIDENTIAL REPORT: JULY 2014 DOWNTOWN NASHVILLE
11 Freeman Webb, “Freeman Webb 2Q 2016 Market Overview.”
Conclusion
All of the recently released data points to a continuation of growth in the real estate market.
Freddie Mac’s conclusion that the Nashville MSA is the healthiest housing market in the nation
coupled with Axiometrics data showing local occupancy rates in this year’s Q2 up 40 basis
points from Q1 to 96.1% and that effective rents climbed 6.5% year-over-year reveal that
Nashville is in a steady position for continued growth.
According to a study released mid-year 2016 by Freeman Webb, the Nashville regional market
will still have a demand for 19,600 apartment units by the end of 2017. This study looks at the
supply of units under construction or recently delivered to the market, the additional units
required due to population growth and decline in homeownership, as well as speculative supply
of units. Although the report states that demand is expected to outpace supply in the Nashville
MSA, some submarkets will feel the impact as local supply may surpass local demand.11
Figure 16 - Freeman Webb 2Q 2016 Market Overview
Downtown residential inventory is being delivered as forecasted, and demand remains high
with rental occupancy rates remaining at 97%, while housing prices continue to escalate. The
only for-sale project in the pipeline that is set to deliver before 2018 is City Lights which will add
only 71 units to the market in late 2017. Downtown currently has a 2.7-month supply of resale
units. Having a 6-month supply is considered a “balanced market.” Increasing land prices and
construction costs amid the Nashville construction boom make building for sale units prohibitive.
Downtown will continue to have pent-up demand for purchase product unless some of the
planned rental projects convert to condos.
In the very short term, there will be year over year imbalances in supply and demand. The
current temporary shortages may be balanced out by near term deliveries. However, the long
term forecast continues to indicate a shortage of residential inventory in the downtown area.